National Bonds Second Salary Scheme: Monthly Income Scheme in UAE

The Second Salary National Bonds Scheme is a savings plan in the UAE that allows you to earn a monthly income from your investments. The scheme offers participants the freedom to choose their preferred tenor, ranging from 3 to 10 years. During this period, savings grow steadily, with highly competitive profit rates. The reinvestment of monthly returns further accelerates the growth of invested funds.

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The longer participants remain in the Second Salary National Bonds Scheme, the greater their chances (Nearly 30 times) of winning prizes in the AED 35 million Rewards Program draws. Participants can increase their chances of winning by making regular contributions to the scheme. This unique feature enhances the savings experience by adding an element of excitement and the potential for substantial financial gains.

At the end of the chosen saving period, participants transition into the income phase of the scheme. They begin receiving their principal investment and accumulated profits on a monthly basis, according to their selected income period duration. This ensures a steady income stream to support financial goals and aspirations.

The SSNBS offers additional benefits to participants. It provides an affordable starting point, with a minimum monthly investment requirement of just AED 1,000. Participants also have the opportunity to earn a monthly income, providing financial stability and additional funds for personal or family needs.

Throughout the entire tenor, participants benefit from a competitive expected profit rate of 4.07% p.a., reinvested monthly. This ensures consistent growth and attractive returns on their investments. Upon completing 3 years in the scheme, participants enjoy the added benefit of having the subscription fee waived. This further increases the overall return on investment, making it even more appealing.

How does the SSNBS work?

The SSNBS is a simple and easy-to-use savings plan. To participate, you simply need to open an account with a participating bank or financial institution. Once you have opened an account, you can begin making monthly contributions. The minimum monthly contribution is AED 1,000.

Your contributions will be invested in a diversified portfolio of assets, including government bonds, corporate bonds, and equities. The exact mix of assets will vary depending on the tenor of your investment.

Your investments will grow steadily over time, with the potential to earn attractive returns. You will also have the opportunity to win prizes in the AED 35 million Rewards Program draws.

At the end of your chosen tenor, you will begin receiving your principal investment and accumulated profits monthly. This ensures a steady income stream to support your financial goals and aspirations.

Who is eligible for the SSNBS?

The SSNBS is open to all UAE residents, including UAE nationals, expatriates, and students. There are no age restrictions, and you do not need to have a high income to participate.

Is the SSNBS a safe investment?

The SSNBS is a relatively safe investment backed by the full faith and credit of the UAE government. Your investments are protected by the UAE Deposit Protection Law, which guarantees the safety of up to AED 250,000 per depositor per bank.

Is the SSNBS a good investment?

The SSNBS is a good investment for anyone who is looking for a safe, secure, and rewarding way to grow their savings. The scheme offers several advantages, including:

  1. Competitive profit rates.
  2. The opportunity to win prizes in the Rewards Program.
  3. A steady income stream.
  4. Affordability.
  5. Easy to use.
  6. Security.

What risks are involved in this investment?

  1. Market risk: The value of your investment could go down as well as up, so you could lose money. The Second Salary National Bonds Scheme is a fixed-income investment, which means that the interest rate is fixed for the duration of the investment. However, the value of the bond itself can still go up or down, depending on market conditions. For example, if interest rates rise, the value of your bond could go down.
  2. Inflation risk: Inflation is the rate at which prices for goods and services increase over time. If inflation is high, the value of your money will decrease over time. This means that the purchasing power of your investment will decrease, even if the interest rate on your bond remains the same.
  3. Liquidity risk: Liquidity refers to how easily you can sell your investment without losing money. The Second Salary National Bonds Scheme is a relatively illiquid investment, which means that it may be difficult to sell your investment quickly if you need to access the money.
  4. Credit risk: Credit risk is the risk that the issuer of your investment will default on its payments. The Second Salary National Bonds Scheme is a government-backed investment, which means that the UAE government is the issuer of the bonds. The UAE government has a strong credit rating, so the risk of default is low. However, there is always some risk involved when investing in any type of investment.

Fee details:

Here are some additional details about the fees associated with the Second Salary National Bonds Scheme:

  1. Subscription Fee: A one-time fee of AED 100 is charged when you open an SSNBS account.
  2. Monthly admin fee: The monthly admin fee is charged to cover the costs of managing your investment. The fee is AED 20 per month.
  3. Overdue payment fee: If you miss a payment, you will be charged an overdue payment fee. The fee is calculated as a percentage of the missed payment. The fee is AED 25 per missed payment.

Preclosure penalty:

The preclosure redemption penalty for the Second Salary National Bond Scheme is 1% of the outstanding principal amount for each year remaining in the term of the bond. For example, if you have a bond with a term of 10 years and you redeem it after 5 years, you will be charged a penalty of 5% of the outstanding principal amount.

The preclosure redemption penalty is designed to discourage investors from redeeming their bonds before maturity. This is because the government wants to ensure that it has access to the funds raised by the bond issue.

There are a few exceptions to the preclosure redemption penalty. For example, the penalty does not apply if you are redeeming your bond to purchase another Second Salary National Bond. The penalty also does not apply if you are redeeming your bond because you are retiring or because you are experiencing financial hardship.

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In conclusion, the Second Salary National Bonds Scheme stands as a transformative investment opportunity for expats. By combining the benefits of flexible saving and income periods, competitive profit rates, a rewarding Rewards Program, and numerous additional advantages, the scheme empowers expats to secure their financial future while enjoying the journey. However, the scheme cannot be used as a place to park emergency funds since there are penalties involved for redeeming the funds as well as the scheme requires a minimum investment period of 3 years, which may not provide immediate access to funds when needed and Finally there is market risk involved. Hence, individuals looking to invest in this scheme have to be cognisant of the risks involved and whether or not the scheme suits their investment horizon.


This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision.

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