Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has unveiled a savings plan called “Khuttati” to encourage medium- to long-term investments through regular contributions.
Khuttati, which means “my plan” in Arabic, allows savers to put aside a fixed contribution amount every month into a savings plan, which provides exposure to a wide choice of Sharia’a-compliant mutual funds investing across different asset classes and currencies. The plan offers a high degree of flexibility on the saving timeframe and level of contribution with an affordable instalments of AED 1000 , which can be easily altered on request, while no charges are enforced on withdrawals.
Mutual funds are investment vehicles that pool money from investors and invest in securities such as equities, sukuk or money market instruments. Mutual funds are professionally managed by a fund manager who attempts to produce capital gains and manage risk through diversification.
“It makes sense for savers to diversify across asset classes through a variety of funds with different risk-reward characteristics,” said Saif Alkeem, Head of Wealth Management & Priority Banking at ADIB. “The Khuttati savings plan is very well structured, to allow customers to put aside some money every month with the aim of taking advantage of international markets. The maturity of the investments is also set in line with the client’s needs, and withdrawing funds is also easy. Crucially, the product is tailored to meet the varying risk appetites of clients.
ADIB’s latest Moneysmart survey of spending and saving showed that just over half of UAE residents save most months, with 5% saying they never or rarely save.
However, 46% of all respondents keep their savings in cash or deposits. Among other savers, 28% invest in their own businesses, 24% save to buy real estate, 24% invest in publicly traded shares, and only 9% place their savings into mutual funds. The three most cited reasons given to save are for emergencies (58% of respondents), home ownership (44%) and children’s education (41%). In addition, 40% said they saved for retirement and 36% said they saved for holidays.
Khuttati will be offered through ADIB’s extensive network of branches, with information available on the bank’s website, adib.com.
