Digital wealth manager StashAway has raised the rate of return on its cash management portfolio to 4.5 per cent, as banks in the Emirates continue to hold back on offering the benefits of the UAE Central Bank’s interest rate rises to savers.
In an era of persistent inflation, leaving idle cash in traditional bank savings accounts can result in its gradual depreciation, StashAway said on Monday.
Previously, StashAway offered 4 per cent on its StashAway Simple portfolio.
“Earning higher returns on your savings should be simple and straightforward,” said Joseph El Am, general manager of StashAway Mena.
“With this rate increase, consumers now have a convenient and highly effective way to work towards their financial aspirations – whether they are saving for a big-ticket purchase, building an emergency fund, or simply seeking a better avenue to park their cash.”
This month, theUAE Central Bank raised its base rate for the overnight deposit facility by a quarter of a percentage point to 5.15 per cent from 4.9 per cent, after the US Federal Reserve increased its policy rate by 25 basis points as it continues to fight inflation.
While the cost of borrowing has risen in line with the interest rate increases, banks have been slower to pass on the benefits to savers.
In February, UAE low-cost robo-advisory platform Sarwa unveiled a cash account with a 3 per cent annual interest rate to help customers boost their savings power.
Sarwa Save is aimed at people who are about to start investing or investors who want to earn a return on their parked cash, the company said at the time.
StashAway Simple is a high-yield cash management portfolio that has no minimum deposit, no lock-in periods and no withdrawal or management fees.
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The rate increase will provide customers with an opportunity to earn more on their savings amid market uncertainties, the company said.
Founded in 2016 in Singapore, StashAway expanded its operations to the UAE in November 2020 to tap into a growing segment of affluent investors looking for low-cost ways to build their wealth.
