All You Need to Know About Investment Plans in UAE

Most of us have a single source of income, but multiple liabilities in the long and short term. If we start fulfilling our goals with accumulated savings, we would eventually end up consuming our entire savings. Hence, investing your precious earnings is essential to create wealth by growing the principal amount over time, which further helps to protect your savings. The terms ‘savings’ and ‘investing’ are co-related, however, differ from each other.

To keep it simple savings means keeping a part of your earning aside, bit by bit. The main objective of savings is to preserve capital, whereas investment involves committing a part of your earnings into an investment plan or product with the motive of making a profit. A major difference between investing and savings is that investment plans in UAE involve some degree of risk as the money is invested in the market whereas regular savings have no risks associated with them.

So, if you are willing to park your savings into investment and are holding yourself back just because you are a rookie, then fret not! We’re here to help you!

Let’s skim through this article to know about what is investment and how does it help growing your money!

What are Investment Plans?

An investment plan is a financial tool that provides the opportunity to invest a portion of your savings to create wealth for the future. Several investment plans in UAE are available however; investing your money with life insurance plans provides returns along with comprehensive life coverage at the same time. Investing your hard-earned money wisely ensures that you have sufficient funds available with you in the hour of need. Investment plans provide financial security to the investor by ensuring their earnings are safe and yield returns periodically.

Types of Investment Plans

You’ll get multiple types of investments in the UAE to park your money. To name a few are Unit Linked Insurance Plans or (ULIPs), Mutual Fund, Retirement Plan and Endowment Plans etc.

l Unit Linked Insurance Plan or ULIP allows the investors to invest their money in a managed portfolio of bonds or equities. ULIPs work by investing the premium amount into market-based instruments to yield returns. The returns received via ULIPs are volatile as they are completely market dependent. ULIP is a flexible way of investing your money where you can check the status of your investments using NAV net asset value.

l Endowment plans offer sum assured or annuity payout when the policy matures. These plans offer guaranteed returns by providing definite profits. Although the rate of return in case of endowment plans is lesser, the returns are safer when compared to ULIP. These plans are highly suitable for people who are looking forward to keeping their money safe and earning some profit on it.

l Mutual funds are another type of investment tool that are made up of funds invested by several investors to invest in schemes like stocks, bonds, shares and other market instruments. Mutual funds are managed by professionals known as money managers who guide the investors to allocate their funds in the right way to receive the best possible returns.

l Gold is considered as the oldest form of financial investment since time immemorial. Our ancestors invested money in gold to gain financial security. One can choose to invest in physical or non-physical forms of gold. Physical forms of gold include gold chains, bars, coins, jewelry etc. whereas non-physical forms of gold include gold stocks, gold funds, gold ETF’s, etc.

l Pension or retirement plans are another form of financial investment, where an individual invests a part of their earning in the economically productive years to ensure financial security during their retirement years. 

Benefits of Investment Plans in UAE

There various benefits of investment plans in UAE are as follows-

Protection for Family and Loved Ones

Investment plans like ULIPs serve dual purposes by yielding returns on investments and providing life coverage. In case of any unfortunate event, the family of the insured receives investment benefits as per the terms mentioned. The sum assured helps the family to overcome financial instability caused due to the loss of the breadwinner’s life.

Helps in Accomplishing Goals

Investment plans are excellent tools that help you to save and grow your money. By investing your money in investment plans you can safeguard your earnings and earn a profit on them, which helps you to accomplish your long and short term goals in life.

The Bottom-Line

The ultimate purpose of life in one word can be summed up as Happiness. Working to discover the secret of lasting happiness is a duty we all owe to ourselves. Making smart investment choices help you to generate wealth by putting your earnings to work. Achieving goals in life is a source of happiness for a lot of people and one can achieve these goals with the help of the right choices of investment.