One of the questions I was always asking myself was: are Dubai banks safe? Because yes, they give you 0% in taxes, but will my money be safe in these banks even with no deposit insurance?
Quick spoiler alert: the short answer is yes, Dubai banks are extremely safe.
But let me actually back this up with facts so you fully understand why they’re safe and why I personally have all of my money in Dubai bank accounts.
Trust me, I’ll also explain to you why the deposit insurance that banks around the world provide isn’t really a silver bullet. It’s not as safe as you would expect it to be. I’ll show you why the UAE system is actually stronger in practice and why I would prefer to have my money in a Dubai bank.
I could actually set up an account in the US, Canada, or any other country, but I choose to have my money here.
What Do the Rankings Say?
Major agencies like Moody’s and Fitch rank the UAE as having some of the best banks around the world. So it’s not just me saying it – it’s major firms consistently ranking UAE banks to be among the top banks in the world for safety, and this is a great positive sign.
Now, the UAE is not ranked number one. Number one is usually countries like Switzerland, Germany, or Singapore. But the UAE is in the top 10. And if you look at the entire GCC (all the countries like Qatar, Oman, the UAE, Saudi Arabia, etc.), you’ll see that UAE banks are actually in the top 10 and taking a majority of that leaderboard.
Top GCC Banks Rankings:
- First Abu Dhabi Bank (UAE) – The number one bank in the GCC, which also owns Wio Bank
- Qatar National Bank (Qatar)
- Abu Dhabi Commercial Bank (UAE)
- A bank from Kuwait
- Emirates NBD (UAE) – An amazing bank we use for our clients for personal banking.
- Abu Dhabi Islamic Bank (UAE) – Another bank we use a lot for business banking
Below that, you’ll see two banks from Israel, one from Kuwait, and another from Saudi. So you can clearly see that UAE banks dominate the top rankings in the GCC.
What Actually Makes Dubai Banks Safe?
Let’s forget marketing about having the best UI, the best interface, or the best whatever. What actually makes Dubai banks safe, especially considering there’s no deposit insurance?
Conservative Capital Requirements
The first thing is how much capital the bank is actually holding against their debt. Here in the UAE, the capital that banks hold is on another level compared to banks around the world.
Strict Lending Culture
In the West, lending is much more common and easier to get. Here, we don’t have 0% mortgage interest. We don’t have 0% down for a property. You can’t get a property very easily with just a cosigner.
Specifically, the culture here for lending is very conservative. They don’t just hand out 0% interest mortgages to anyone with a pulse.
They don’t let you qualify for a loan very easily. I have so many clients who come here and can’t even qualify for a car loan right away. You need to have proof of history and banking to qualify for a loan, especially if you’re self-employed. It’s not easy.
The UAE requires:
- Real down payments
- Real paperwork
- Thorough financial reviews
They legitimately want to make sure that you can actually afford what you’re getting yourself into.
Credit Card Requirements
Even for things like credit cards, even if you have a salary, in some cases banks will require you to actually put collateral for your credit card if you want to get one – which essentially makes it a debit card at that point. But that’s just how it works.
If you’re new to Dubai and don’t have any salary history, you’re going to have to put money into your bank account and lock it to get a credit card. This is called a collateralized credit card, and it’s very common here.
I remember setting up a company in Canada, and the next week we had credit cards for the company. In Dubai, that’s not going to happen. You need to actually build history, send transfers, receive money, send money out, and have everything in line before applying for these things. Otherwise, just forget about it.
Mortgage Requirements
Just because people have the idea that Dubai is a 0% tax country, they sometimes think it’s the Wild West with no regulations. No – financing is not easy here in Dubai. Qualifying for a mortgage is not easy here in Dubai.
It’s going to take you:
- At least 6 months to qualify for a 50% loan
- 12 months for still a 50% loan
- 24 months for an 80% loan on your property
And you still have to go through a lot of checks. It’s not easy.
The Deposit Insurance Myth
A lot of people mention that Dubai doesn’t have deposit insurance. But the reality is the coverage limits for these deposit insurances in other countries are not that high.
If you have substantial money in your bank account in the West and the bank goes kaput, great – maybe you get $100k or $200k back. But if you had a million dollars in there, say goodbye to your $800,000. The thresholds of protection are very low.
And in the event of a true crisis, trust me, these deposit insurances sometimes just don’t get paid out. The first entity to get paid out is the government. You are secondary.
Even if you do get your money back later, you’re going to have to go through a process. And at that point, after the government pays themselves back, you’re probably going to have less buying power from devaluation in your currency.
The UAE Advantage
In the UAE, it’s totally different. The banks are owned by the government – not 100%, but privately and publicly owned. This is much better in my opinion.
Incredible Liquidity
The UAE has incredible liquidity. The amount of money flowing into Dubai is incredible. One thing people don’t understand is the amount of money flowing through the real estate market here really helps the government have even more liquidity.
Every time a property transfers, there’s a 4% fee that gets paid to the government. Imagine that – 4% of a multi-million dollar property transacted every single day. I think the transactions on a daily basis are over a billion dirhams, could even be 2-3 billion dirhams per day. So imagine 4% of that going into their reserves every single day.
Aligned Ecosystem
There’s incredible liquidity here and it’s all aligned. It’s not like one department is doing good while another is doing bad. When you take a step back and look at it, it’s all one entity, which gives them more protection. Let’s say the bank doesn’t do well – it can be helped by other areas in the UAE.
Choose Your Bank Wisely
The point of this video is to tell you that the banks are safe—yes. But with that being said, you should still choose your bank wisely. Although all of them are good, to be honest with you, choose a bank that you would enjoy using.
Our Preferred Banks at Genzone:
Wio Bank
We just switched our business banking to Wio full-time. If you’re paying us here at Genzone, it will go to a Wio bank account. We used to use Rakbank, which was still amazing, but we moved to Wio because it’s so much better for convenience.
Really good to use. Overall, amazing experience. We have a full guide to show you how to open your bank account there, and if you’re a Genzone client, we’ll do it for you. We are one of their top partners—I think we’re number one.
Emirates NBD
An amazing bank we use for our clients for personal banking. They love it. We also use it for business banking sometimes.
First Abu Dhabi Bank
Another excellent option with top safety rankings.
Abu Dhabi Islamic Bank
We use this a lot for business banking.
Getting Started
Before you can set up your bank account, you need to have something set up first: either a golden visa by buying a property here, or setting up a company and getting your business bank account set up, then your personal bank account.
Here at Genzone, we do the entire process for everyone from start to finish. We know the people at the banks, we have amazing relationships with our relationship managers and the compliance teams, and we can get you your bank account set up in record time.
If you need our assistance, contact us or book a call to get started.
