Get a better current account deal

Contributor

STARTING life in a new country is never easy. You have to get a visa, find a new home, make new friends and, of course, open a new bank account. This is a high priority in the UAE: without a current account, you're not able to sign a rental lease or receive your salary.

It is this urgency that often means people don't shop around enough – or at all – for a current account. Many simply go to a brand they are already familiar with or a bank that has a branch near them. Others bank with a financial institution that their employer stipulates or recommends.

Take, for example, Burkhard Schumacher, who relocated to Dubai from Germany. After checking out a few institutions, he settled for Citibank for two reasons. "It has a branch near my office and since my company has a relationship with Citi my salary would be available to me two days earlier than if I had gone to another bank," he said.

"In the beginning, I shopped around and went to few banks but I found that they pretty much all offered the same thing."

Another reason why Citi won his business was that it waived its annual fee – but only for the first year. "What really annoys me is that there's no free banking in this country," said Burkhard. "I give these guys my money and I have to pay for it. It would be great if there were current accounts like there are in Germany, where there's no charge for having an account or using ATMs. But, unfortunately, that's not the case here."

Know the common features

With more than 50 national and foreign banks, the UAE has a very high bank per person ratio, possibly the highest in the world. Theoretically, banks should be fighting tooth and nail to win customers by offering the most competitive products. Sadly, this conventional wisdom doesn't hold true, owing in part to the fact that most banks here are majority government-owned.

Most current accounts in the UAE share these general characteristics:

• Demand a minimum balance or minimum salary transfer, or both;
• Charge an annual fee, unless you can sign up for a premium account that requires a monthly salary of more than AED 50,000 ($13,612);
• Offer a better package if you or your employer has an existing or potential relationship with the bank;
• Do not pay any interest, although some premium accounts offer decent rewards programmes;
• Come with one free debit card and one free 25-leaf cheque book. After that, you usually have to pay for copies;
• Have standing order facilities;
• Offer online, branch, text and phone banking in the UAE.

Some also offer the ability to pay bills over the internet. These include payments to water and electricity suppliers, as well as expenses like road tolls. Other accounts also have overdraft facilities, depending on your salary.

Unfortunately for consumers, the main players in the UAE's banking industry – whether they are based here or affiliated with international brands – don't do enough to differentiate themselves. However, while a lack of differentiation is the reality of the banking sector here, it doesn't quite end there.

Negotiate, negotiate, negotiate

In some cases, the fees on your current account can be negotiated. Banks almost anywhere reward loyalty because they depend on cross-selling products to boost their bottom line.

National Bank of Abu Dhabi (NBAD), for instance, has recently started waiving its annual fee if you have multiple products with it, such as a savings account, personal loan or car loan. To get this, though, you have to see a customer representative at a branch and remind the bank of your value to it. "It's not really to your advantage to split your business among many banks," said a client manager at a branch of NBAD.

Make sure that you deal with a representative who knows what they are talking about, too. Many are not highly trained, but some banks have started addressing this issue. If you aren't satisfied with the service you've receiving, ask to speak to the bank manager.

Look at the variables

Not only can you save on fees, but scouring the market for the account that gives the best extras for you will also pay dividends. Airport 'meet and greet' services are often offered with credit cards in the UAE, as are a limited number of free transactions.

Abu Dhabi Commercial Bank's Aspire account offers free life insurance and various loyalty programmes, including shopping points, vouchers and airport 'Marhaba' services.

If it's interest you're looking for, Citibank's Citibest account pays up to 1.5% per year on credit balances, but this is only available to small and medium-sized businesses. For individuals, it's Checking Plus account offers up to 0.15% and its Advantage account pays 0.55%. However, these accounts require a minimum monthly balance of AED 10,000 ($2,722).

That's not as high as the minimum required by Lloyds: it has the largest monthly deposit needed for a standard current account among those compared by cashy. Meanwhile, National Bank of Abu Dhabi has the lowest minimum balance requirements on some of its Standard Personal current accounts, Student accounts and Ladies accounts.

If you're looking for a bank with a large branch network, Emirates NBD has the largest distribution of all banks in the UAE – so the most cash machines and branches.

Additional reporting by Jennifer Hill

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