In a move that could impact thousands of account holders, several banks across the UAE will raise the minimum monthly balance requirement to Dh5,000 starting June 1, 2025. The hike, up from the current threshold of Dh3,000, comes with a monthly penalty of Dh25 for those who fail to meet the new requirement — unless they hold a credit card, loan, or personal financing with their bank.
The policy shift has stirred concerns among low- to middle-income earners who fear the change could place a greater strain on their already tight finances.
Why Are Banks Raising the Minimum Balance?
The increase aligns with efforts by banks to offset rising operational costs while encouraging customers to use more of their financial services, such as credit cards or loans.
“Minimum balances help banks secure deposits that can be used for lending and help meet regulatory liquidity requirements,” explained Vijay Valecha, chief investment officer at Century Financial. “This move also helps cover the high costs of maintaining active accounts.”
The previous rule, implemented in 2011, required a minimum of Dh3,000 to avoid a Dh25 monthly charge. However, the updated requirement reflects a broader shift toward higher service charges in the region’s banking sector.
UAE: Who Will Be Exempt From the Fee?
While the new Dh5,000 minimum balance requirement may sound rigid, several categories of customers will still avoid the Dh25 monthly fee:
- Salary transfers of Dh15,000 or more automatically waive the fee.
- Customers maintaining a total balance of Dh20,000 or more are also exempt.
- Individuals earning between Dh5,000 and Dh14,999 monthly will avoid fees if they have a credit card, overdraft facility, or a personal loan with the bank.
Those without these financial products — particularly low-income earners — will be charged Dh25 monthly, or even Dh100–Dh105, depending on the account type.
This tiered structure means that for many customers, the only escape from the monthly charges may be to apply for a credit card or loan — which raises its own risks for those trying to avoid debt.
The Financial Burden on Low-Income Workers
For many service sector employees and blue-collar workers, the updated requirement poses a serious financial challenge. Dr. Ben Lebig, a finance expert who offers free advice to overseas Filipinos in the UAE, emphasized the harsh implications.
“This rule places low-income residents in a tough position,” said Lebig. “They must either reduce their personal expenses or remittances, or banks may push them toward unwanted credit products just to meet financial conditions.”
Lebig further urged banks to reconsider the one-size-fits-all approach. “Not all residents earn the same. Creating flexible balance thresholds based on salary ranges could reduce the burden on vulnerable groups.”
Are There Better Options for Affected Customers?
Despite the broad implementation of the new UAE minimum balance requirement, not all banks are applying it uniformly. Some fintech platforms and digital banks still offer zero-balance accounts, mainly catering to low-income workers and freelancers.
These alternatives often come with no monthly fees, instant transfers, and lower international remittance charges, making them ideal for those earning below the Dh5,000 threshold.
Industry analysts also advise consumers to shop around before switching banks. “Don’t settle for the first offer,” said Valecha. “Ask about salary account perks, fee waivers, and whether the bank offers savings options without hidden costs.”
How Employers Can Step In
The responsibility doesn’t lie with workers alone. Experts suggest that employers should reassess their payroll structures to support affected employees.
One solution could be to partner with banks that offer preferential terms or bulk salary transfer agreements to waive or reduce fees. For larger organisations, negotiating corporate banking benefits for all staff could help mitigate the financial impact.
Furthermore, employers can conduct internal financial literacy sessions, educating their staff on how to better manage banking fees, use credit responsibly, and understand personal finance in the UAE.
Here’s how the new rule could affect workers at various income levels:
- Worker A earns Dh4,000/month and has no credit card. They’ll be charged Dh25 monthly, totaling Dh300 a year.
- Worker B earns Dh6,000/month and holds a credit card. They’ll not be charged any fee.
- Worker C earns Dh3,500/month but maintains a Dh20,000 balance in savings. They’ll also avoid the fee.
The disparity shows that financial literacy and banking choices will play a critical role in who pays and who doesn’t under the new rule.
With inflation still pressuring daily expenses in the UAE, any new charges can significantly affect low-income residents. The timing of the change, just ahead of summer, may also coincide with school fee deadlines, rent renewals, and other budget-tightening pressures.
For many, the increase in minimum balance isn’t just a bank policy — it’s a reminder that managing money in the UAE is becoming increasingly complex.
The Bottom Line
The upcoming Dh5,000 minimum balance requirement has sparked a debate across the UAE’s diverse expat and working population. While banks aim to streamline their services and push for greater engagement through credit and lending products, the pressure on low-income residents is undeniable.
Still, not all hope is lost. By exploring digital banking alternatives, leveraging salary-linked benefits, and increasing awareness of personal finance tools, residents can still find ways to adapt without taking on unnecessary debt or cutting back on essentials.
Stay Informed, Stay Ahead
As the UAE banking landscape continues to evolve, being informed is half the battle. Whether you’re a salaried employee, a freelancer, or a business owner, now’s the time to re-evaluate your financial setup and prepare for June’s changes.
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