How to Make a Monthly Income From Investing Online in UAE

Page Summary

This guide breaks down different ways to generate a monthly income with investing online in the UAE. It reviews various fixed-income security investments available in the UAE to help users create a regular and stable income stream. To increases investors chances for success it also lists the top brokers and trading platforms for various types of investors and trading goals.

Monthly income refers to a type of income that should supplement the regular income and is aimed to cover investors monthly living expenses.

What is Income Investing?

Income investing is a type of investment strategy that allows the trader to build a stable and regular income stream to help them cover their living expenses.  It focuses on high yield or dividend-payout assets that are best suited to provide regular income.

What is the difference Between Passive Income and Income Investing Strategies?

Passive income and income investing are both investment strategies used to generate regular and steady income. They differ based on the activity level required from the investors.

Passive income strategies are aimed to provide a self-sustaining income that requires little to no effort required from the investor. Income investing on the other hand is a strategy that is aimed to provide a regular income requiring the investors to be actively involved…

Both investment strategies invest in asset classes that provide a stable income over the long run. Those include stocks, bonds, ETFs, mutual funds, REITs, and other fixed-income securities, that provide stable yields and returns in the form of dividends

What Are The Best Investments To Generate A Monthly Income in UAE?

The best assets to generate a monthly income from investing in UAE are listed below.

1. Bonds

Bonds are investments where the investor (bondholder) lends money to a company (company bonds) or government (government bonds) to receive regular interest payments in return. The interest payments are usually fixed (they range from 1-5%) and paid out on a predetermined schedule. 

There are two types of bonds available to UAE investors: government bonds and corporate bonds. Government bonds are issued by governments and are lover risk investments compared to corporate bonds. Corporate bonds are issued by companies and offer higher average yields, but also involve higher risk compared to government bonds. 

Estimated monthly income amounts that can be generated with government bonds (with an estimated average yield of 1.5%) vs corporate bonds (with an estimated average yield of 3.5%) can be found in the table below.

Capital SizeGovernment Bond YieldEstimated Annual IncomeCorporate Bond YieldEstimated Annual Income
$10,0001.5%$1503.5%$350
$50,0001.5%$7503.5%$1,750
$100,0001.5%$1,5003.5%$3,500
$500,0001.5%$7,5003.5%$17,500
$1,000,0001.5%$15,0003.5%$35,000

Income generated with bonds can vary depending on several factors, including market interest rates, credit risk, trader’s knowledge level, fees, and specific terms of the bonds.

Here is a list of recommended platforms for bonds in the UAE. 

2. Dividend stocks and Dividend Reinvestment Plans (DRIP)

Dividend stocks are shares of companies that pay out a portion of their profits to shareholders in the form of dividends. Dividend stocks are a great income investment because they provide investors with a steady and regular income in the form of dividends (part of the company’s earnings). Dividends are paid out periodically (annually, semi-annually, quarterly, or monthly).

Companies and their average dividend yields available to shareholders in UAE are compared in the table below.

Company NameAverage Dividend Yield (Forward)
Sudatel Telecommunications16,34%
Fertiglobe Plc15,64%
Dana Gas PJSC10,74%
Union COOP9,32%
EMAAR Development8,92%

Here is a list of top online stock brokers that offer dividend stock and and dividend reinvestment plans (DRIP) to UAE traders and investors.

3. Real Estate Investments

Online real estate investments in UAE have two types: Real estate crowdfunding and REIT’s (Real Estate Investment Trust).

Real estate crowdfunding allows investors to invest their money into multiple real estate projects without having to buy entire properties. It is a form of fractional investing that provides investors with stable returns from rental income and/or appreciation of the property. The best platforms to invest in real estate crowdfunding projects are Eureeca, Smart Crowd, and Durise. Here is our full list of recommended real estate crowdfunding platforms in UAE.

REITs generate income through rental income or the appreciation of the properties within the real estate portfolio. REITs work similarly to mutual funds by pooling money from multiple investors to invest it in a wide variety of real estate assets. REITs are a great income investment as they provide a steady income from rental or appreciation over the long run. Here is a list of recommended REIT trading platforms for UAE users

Average yields that can be expected from both types of real estate investments (crowdfunding and REITs) are listed below.

  • Real estate crowdfunding: The average yield for real estate crowdfunding investments in UAE ranges from 8-12%
  • REITs: The average yield for REITs in UAE typically ranges from 3-7%.

The average yields from real estate investments can vary based on several factors including location, type of property, real estate market conditions, and interest rates.

4. Annuities

Annuities are investment products (insurance products) that provide the annuity holder with a guaranteed income stream over the holder’s lifetime. Annuities are usually issued by insurance companies. They are a great income investment as they provide a regular and stable income over the long term.

Annuities available to UAE investors have 3 types. The different types of annuities and their expected average yield rates are listed below.

  • Fixed annuities – are annuities that generate a guaranteed fixed interest rate over a specific timeframe. Average yields on fixed annuities range from 1 to 3 percent a year. Fixed annuities are a great option for investors who are looking to increase their stable income stream.
  • Variable annuities – pay out variable interest rates based on the performance of the financial instruments in its underlying investment portfolio. Most variable annuities are invested in mutual funds and don’t have guaranteed returns. Variable annuities are considered riskier than fixed annuities.
  • Index annuities – are tied to the performance of indices. This type of annuity pays out a guaranteed minimum interest rate and provides the opportunity for higher yields based on the performance of the index it tracks. 

5. High-Yield Savings Accounts

Savings accounts with high-interest rates provide a regular and stable income to the account holder. Saving account yields in UAE vary depending on the type of bank (regular bank, digital bank), current interest rates, and market conditions

Bank accounts with the highest average yields in UAE are listed below.

  1. iSave Account (First Abu Dhabi Bank (FAB) – Up to 4.5% (campaign rate) 
  2. Long-Term Wakala Deposit account (Dubai Islamic Bank (DIB)) – 2.65% annual interest rate
  3. Monthly Payment Wakala Deposit account – 1.6% – 2.6% annual interest rate

The best high yield saving accounts in UAE and their annual interest rates are compared in the table below.

Product:Bank:Minimum Deposit:Annual Interest Rate:
iSave AccountFirst Abu Dhabi Bank (FAB)AED 0AED 500,000 -AED 500,000 +Up to 4.5% (campaign rate)0.1%—1.82%1.82%-2.5%
Long-Term Wakala DepositDubai Islamic Bank (DIB)AED 25,0002.65%
Monthly Payment Wakala DepositDubai Islamic Bank (DIB)AED 25,0001.6% – 2.6%
Savings AccountAbu Dhabi Islamic Bank (ADIB)AED 5,0000.35% – 0.37%
Savings AccountRAKBANKAED 3,0000.25% (+1% p.a. campaign rate)
Bonus Booster DepositCommercial Bank of Dubai (CBD)AED 1,000Up to 2.02%
Currency Passport Savings AccountEmirates NBDAED 0Up to 0.15%
Fixed Deposit PlusRAKBANKAED 25,000AED 100,000AED 500,000AED 1,000,000AED 5,000,0000.1%—0.4%0.1%—2.1%0.15%—2.1%0.15%—2.1%0.2%—2.1%
MaxSaver AccountMashreq BankAED 5,000Up to 1.2%
Active Saver AccountAbu Dhabi Commercial Bank (ADCB)AED 00.4%—1.15%

This is a list of best high yield saving accounts in UAE

What Are The Best Brokers and Trading Platforms To Make a Monthly Income From Investing in UAE?

The best brokers and trading platforms to make a monthly income in UAE from investing are listed below. They are ranked as best for dividend stocks, Bonds, and REITs.

1. eToro – Best Trading Platform For REITs

eToro logo

Rating: 4,9/5

Min Deposit: $50

Fees: 4.8

Assets available: 4.8

Total Fees:

Open account Read review

Leveraged and speculative product. Not suitable for all investors. You should consider whether you can afford to take the high risk of losing your money. Capital is at risk.

eToro is an international investment company, founded in 2007. They offers access to a variety of assets including 2,800 real stocks, 2,850 stocks as CFDs (contracts for difference), 9 international REITs, forex, commodities, ETFs, indices, and cryptocurrencies. Their trading platform has a beginner-friendly interface. It is accessible as a web version (Web Trader) and mobile app (Android, iOS).

Open account

Leveraged and speculative product. Not suitable for all investors. You should consider whether you can afford to take the high risk of losing your money. Capital is at risk.

2. Interactive Brokers – Best For Dividend Stocks and  (DRIP)

Interactive Brokers

Rating: 4,9/5

Min Deposit: $0

Fees: 4.9

Assets available: 4.9

Total Fees:

Open account Read review

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

Interactive Brokers is an American brokerage firm, founded in 1978. They offer access to 135 international exchanges including real stocks (17,500), stocks as CFDs ( 8,500), fractional shares and dividend stock reinvestment plans. Their trading interface is easy to use. It features 100 different order types for beginner and advanced traders. Interactive Brokers has extensive research and analysis tools for stocks.

Open account

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

3. Charles Schwab – Best Platform For Bonds

Charles Schwab logo

Rating: 4,1/5

Min Deposit: $25.000

Fees: 5.0

Assets available: 4.8

Total Fees:

Charles Schwab is an American online brokerage firm, founded in 1971. It provides users access to over 60,000 bonds from more than 200 dealers. Bonds available at Charles Schwab include treasury bonds, corporate bonds, municipal bonds, agency bonds, and mortgage-backed securities.

Charles Schwab charges no commissions on new issued bonds. Secondary trades are charged with an online fee of $1/bond.

Tips To Help Choosing The Right Platform and Broker in UAE

Choosing the right platform can have a significant impact on the profitability of online investments. Criteria that help choose the right broker and platform to generate a monthly income investing in UAE are listed below. 

  • Trading instruments. Platforms with a wider range of investments should be preferred. They allow deverzification and increase chances for profit. The most common income investments to consider include bonds, dividends stocks, REITs, and ETFs.
  • Fees. Platforms have different fee structures. Higher fees decrease profitability. Platforms with lower overall fees should be preferred. 
  • Trading Tools and third party integrations. A wide range of trading tools and third party integrations are offered by brokerage firms. Trading tools help traders make informed trading decisions and increase their chances for profitable trading. Traders’ knowledge level, trading style, and trading goals should be considered when selecting the right platforms and integrations. 
  • Reputation. Choosing a reputable platform and broker helps to increase trader’s safety and avoid scams. Brokers with a high number of users, positive reviews (feedback), and tier-one licenses should be preferred.
  • Personal Preferences. Trader’s preferences that should be taken into account include religion (Islamic account options), language (Arabic, English, Malayalam, Kannada), and residential status in UAE (citizen, expat, tourist).

Is Income Generated With Investing in UAE Taxed?

The tax law in UAE differentiates between two subjects: UAE residents and non UAE residents.

Profits of UAE residents and companies registered in the UAE made with investing are subject to a 0% income tax.

Profits of non-UAE residents made with investing are subject to tax laws in their country of residency. However, the profits of non-UAE residents are subject to a 15% withholding tax.

The exact taxation rates vary and depend on other factors like the residency status of the trader, the volume of trading activity, and the total profits made.

How Much Monthly Income Can You Expect To Generate With Investing in UAE?

Income investments typically generate a lower return on investments compared to other strategies. Their focus is to generate a stable and regular income stream by investing in low-risk assets. 

The amount of monthly income that can be generated by investing in the UAE varies based on several factors including investment strategy, types of investment, amount of capital invested, associated risk level, and current market conditions.

The average annual yields of different income investments are compared in the table below. 

Income Investment StrategyAverage Annual Yield
Bonds1-5%
Dividend Stocks2-6%
REITs6-12%
Real Estate Crowdfunding6-12%
Annuities3-6%
High-Yield Savings Accounts1-2%

Summary

Following the findings in this guide, the best income generating assets to make a monthly income from investing in UAE include bonds, dividend stocks, real estate investments, annuities and high-yield saving accounts. All of the listed investments allow investors to build a regular and stable income stream to cover their living expenses.

The best brokers and trading platforms to build a monthly income with investing include eToro, Interactive Brokers and Charles Schwab.

Disclaimer

eToro is a multi-asset investment platform. The value of your investments may go up or down. Leveraged and speculative product. Not suitable for all investors. You should consider whether you can afford to take the high risk of losing your money. Capital is at risk. Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk. Crypto assets are unregulated& highly speculative. No consumer protection. Capital at risk.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

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