Dubai Fixed Deposit Interest Rates: Up to 4.5% for 1 Year | Calculating 1 Million Yen Including Exchange Costs

The interest rate for a 1-year fixed deposit in Dubai, denominated in dirhams, is currently 2.85% to 4.5%. Some banks offer as much as 6% per year for savings accounts with conditions such as salary transfers. However, when you calculate the process of exchanging 1 million yen, depositing it for a year, and converting it back to yen, the actual gain is only about 15,000 to 32,000 yen.

This article is a calculation based on revisiting the interest rate pages of six UAE banks on November 1, 2026, and actually simulating the round-trip exchange of 1 million yen using the public exchange rates of Mitsubishi UFJ. I have also compared these with the 1-year fixed deposit rates of Japan’s three megabanks (0.700% as of November 2).

What you will learn in this article

• The 1-year fixed deposit interest rates for each bank and the conditions for obtaining 6%

• The reason why Dubai’s interest rates are almost as high as those in the United States

• How much is lost to exchange rate differences when depositing 1 million yen for one year

• How much of an appreciation in the yen would wipe out a year’s worth of interest

• Taxes and the availability of deposit insurance when depositing while living in Japan

• The results of replacing the “8% for 30 years” figure from a certain company’s consultation materials with official interest rates

1-year fixed deposits are 2.85–4.5%; 6% is the figure for “conditional savings accounts”

First, it helps to understand that there are two tiers of numbers so you don’t get confused.

The top tier is the high interest rate available only to those who meet certain conditions. For example, the digital bank Wio offers “up to 6%,” but this applies to Family or Salary plans, requires a salary transfer and a monthly spend of 5,000 dirhams, and the deposit term is only one month (Wio “Save”). The account with free withdrawals was 3% per year.

The bottom tier is the standard 1-year fixed deposit that anyone can apply for. On the official pages of each bank, the interest rates for 1-year dirham-denominated deposits were as follows (confirmed on November 1, 2026).

• HSBC: 4.50% (Campaign for new funds only. The standard rate is 2.60%)

• FAB (First Abu Dhabi Bank): 4.15% (Page says “Updated October 30, 2026”)

• ADCB: 4.00% (Minimum 5,000 dirhams)

• Standard Chartered: 3.10% (New funds deposited within 30 days. Existing funds are 2.80%)

• Mashreq: 3.07%

• Emirates NBD: 2.85% (Minimum 10,000 dirhams)

Even for the same “1-year fixed deposit at a Dubai bank,” there is a 1.65-point gap between the top and bottom. For 1 million yen, that is a difference of about 16,000 yen per year. My first impression was that the results vary significantly depending on which bank you choose.

Source: HSBC UAE・FAB・ADCB・Standard Chartered UAE・Mashreq Rate Table・Emirates NBD

Islamic banks offer “profit distribution” rather than interest. Dubai Islamic Bank lists an expected profit rate of 5.00% for deposits from 25,000 Dirhams, but this is merely an estimate. The actual performance for a 1-year term published by ADIB in August 2026 was 0.76% (DIB・ADIB).

Since estimates and actual results can differ significantly, it is safer not to compare them using the same yardstick as fixed deposits.

The reason interest rates are high is that the Dirham is pegged to the Dollar

It is often assumed that “Dubai banks have high interest rates because the economy is good,” but the mechanism is much simpler.

The Dirham is pegged to the US Dollar at 1 USD = 3.6725 AED. To maintain this peg, the Central Bank of the UAE explains that it moves its policy rate in line with US interest rates (interest on reserve balances) (UAE Central Bank “How the monetary system works”).

When we line up the actual figures, they matched perfectly.

• USA: Policy rate held at 3.75–4.00% on October 28, with the interest rate on reserve balances at 3.90% (FRB)

• UAE: The policy rate (Base Rate) has been 3.90% since September 17 (Announcement by the Central Bank of the UAE)

• Japan: 1-year fixed deposit rates at the 3 mega-banks are 0.700% as of November 2 (up from 0.500% previously)

In other words, fixed deposits in Dubai are essentially “Dollar interest rates.” If the US cuts rates, Dubai’s policy rate will follow suit, and fixed deposit rates will follow. Conversely, we believe there is no guarantee that the current rate of around 4% will continue indefinitely.

Source for Japanese figures: Sumitomo Mitsui Banking Corporation・MUFG Bank・Mizuho Bank revision notices

If you deposit 1 million yen for one year, the amount you gain is approximately 28,000 yen

This is the main point. We followed the process from start to finish for depositing 1 million yen for one year at FAB’s 4.15% rate. The exchange rates are based on the MUFG Bank published rates for October 30: a mid-market rate of 157.54 yen per US dollar, 158.54 yen when converting yen to dollars, and 156.54 yen when converting dollars back to yen (MUFG Bank Research & Consulting “Foreign Exchange Rates”).

1. Convert 1 million yen to dollars at 158.54 yen → $6,307

2. Multiply by 3.6725 to get dirhams → 23,165 dirhams

3. Apply 4.15% interest → 961 dirhams (approx. 41,200 yen at the mid-market rate)

4. After 1 year, convert 24,126 dirhams back to dollars, then to yen at 156.54 yen → 1,028,361 yen

If you simply think ‘1 million yen × 4.15% = 41,500 yen’, you are short by about 13,000 yen. What disappeared is the difference between the exchange rates for the outward and return trips. At 1 yen each way from the mid-market rate, that is about 1.3% round-trip. It is calculated that nearly one-third of a year’s interest disappears just from currency exchange.

Moreover, this is based on the bank’s published rates and does not include overseas remittance fees or the receiving bank’s fees. The amounts vary significantly depending on the bank and the method of transfer, so I have not converted them into figures here.

When performing the same calculation for other banks, the amount gained in hand was as follows.

• HSBC 4.50%: approx. 31,800 yen

• FAB 4.15%: approx. 28,400 yen

• ADCB 4.00%: approx. 26,900 yen

• Standard Chartered 3.10%: approx. 18,000 yen (However, the minimum is 25,000 dirhams, so 1 million yen is not enough)

• Mashreq 3.07%: approx. 17,700 yen

• Emirates NBD 2.85%: approx. 15,500 yen

If you deposit the same 1 million yen in a Japanese mega-bank, at the 0.700% rate from November 2, you get 7,000 yen, or 5,578 yen after tax. There is certainly a difference. However, it does not look like ‘dozens of times higher than in Japan’.

If the yen appreciates by 2.7%, one year’s worth of interest disappears

This is the point I most want to convey.

If deposited at FAB for one year, the dollar amount including interest is approximately $6,569. The break-even point for converting this back to yen without falling below 1 million yen was 1 dollar = approx. 153.2 yen at the mid-market rate. That is only a 2.7% appreciation of the yen from the current 157.54 yen.

It is not rare for the dollar-yen rate to move by more than 10 yen in a year. As a test, I shifted the mid-market rate one year later up and down (subtracting 1 yen from the mid-market rate when converting back).

• 10% Yen appreciation (approx. 141.8 yen): approx. 75,000 yen loss

• 5% Yen appreciation (approx. 149.7 yen): approx. 23,000 yen loss

• 3% Yen appreciation (approx. 152.8 yen): approx. 2,700 yen loss

• Unchanged (157.54 yen): approx. 28,000 yen gain

• 5% Yen depreciation (approx. 165.4 yen): approx. 80,000 yen gain

• 10% Yen depreciation (approx. 173.3 yen): approx. 132,000 yen gain

What determines the result is the exchange rate, rather than the 4% interest rate. It is more accurate to think of a Dubai fixed deposit not as an “interest-bearing product,” but as a product that earns around 4% while holding dollars than as an interest-bearing product. Our view is that it makes sense for those who want to hold dollars in preparation for a weaker yen, but the volatility is greater than expected for those who simply want to grow their yen.

If you deposit money while living in Japan, the interest is subject to Japanese taxes

There is no personal income tax in the UAE (u.ae “Taxation”). Therefore, interest is not deducted on the Dubai side. This much is true.

However, the story changes for those living in Japan. According to the National Tax Agency’s table on “Types of Income and Taxation Methods,” while interest on domestic deposits is subject to a 20.315% withholding tax (separate self-assessment taxation), interest on deposits paid abroad is subject to “comprehensive taxation” (National Tax Agency “Types of Income and Taxation Methods”).

You must file a tax return along with your salary and other income, and it will be subject to a progressive tax rate of 5% to 45% (National Tax Agency No. 2260).

When you add the 10% resident tax and the special reconstruction income tax to the FAB interest of approximately 41,200 yen, the tax is roughly as follows.

• People with a 10% income tax rate: approx. 8,300 yen

• People with a 20% income tax rate: approx. 12,500 yen

• People with a 33% income tax rate: approx. 18,000 yen

• People with a 45% income tax rate: approx. 23,100 yen

The higher your income, the more disadvantageous it is compared to domestic deposits (flat 20.315% tax). If a business owner with annual sales keeps the interest from Dubai without declaring it because it is tax-free there, it is likely to become a problem later. If you leave Japan and become a non-resident, you are no longer subject to Japanese taxation, but the line between being a resident and a non-resident is not determined solely by the number of days you live there. This point is explained in detail in the related article below.

Four conditions written next to the interest rate figures

What I noticed after opening each bank’s page one by one was that the small print next to the interest rate has a greater effect on the result.

If you cancel midway, the interest will be reduced

ADCB states a 1% deduction from the interest rate for early withdrawal, and Mashreq NEO states a 2% deduction ( Mashreq NEO ). The Emirates NBD product description (June 2024 version) also specifies a 1% deduction ( Emirates NBD KFS ).

If 2% is deducted from Mashreq’s 3.07%, the remainder is about 1%. It becomes not much different from a Japanese fixed deposit. The premise is to only deposit money that you will not move for a year.

Only “new money” gets high rates

HSBC’s 4.50% applies only to the amount that exceeds the balance from 7 and 30 days ago. Even if you move money already in your account to a fixed deposit, it will be the standard 2.60%. Standard Chartered also offered 3.10% only for money deposited within 30 days. Campaign interest rates must be considered in conjunction with the timing of your remittance.

Some banks have a minimum amount exceeding 1 million yen

1 million yen is approximately 23,000 dirhams. It exceeds ADCB’s 5,000 and Emirates NBD’s 10,000, but does not reach Standard Chartered’s 25,000. HSBC’s standard Premier also requires a minimum of 10,000. The smaller the amount, the fewer banks you can choose from.

If it is dollar-denominated, you only need to exchange once

ADCB offered a 4.25% rate for a 1-year dollar-denominated fixed deposit, which was higher than the 4.00% for dirham-denominated ones. HSBC’s dollar-denominated rate is 3.90% (4.75% for $200,000 or more).

If you exchange yen to dollars and deposit them as is, you can avoid going through dirhams. Since the dirham is pegged to the dollar, the exchange rate fluctuation is almost the same regardless of which currency you hold. If you do not plan to use living expenses in dirhams, I think it is fine to look at dollar-denominated options first.

Deposit insurance is not found. Do not consolidate in one bank

In Japan, deposits are protected by deposit insurance up to 10 million yen in principal per bank plus interest. However, foreign currency deposits are not covered ( Deposit Insurance Corporation of Japan ).

What about the UAE? The new banking law of 2025 established the authority for the Central Bank to create a mechanism to protect depositors. However, I could not find a deposit insurance system that is actually operating with a cap on official pages. The commentary by the law firm Al Tamimi also phrases it as “potentially leading to future introduction” ( Al Tamimi ).

Some sites state that “the UAE also protects up to 100,000 dirhams,” but since I could not verify this, I will assume here that there is no protection. If you are depositing a large amount, split it across banks. Consolidating in one bank is not worth it even if there is a slight difference in interest rates.

Replacing the ‘8% for 30 years’ in the consultation materials with official interest rates

When you go for a consultation on establishing a company in Dubai, you may be shown a simulation of compound interest on deposits. In the consultation materials of one incorporation firm (July 2026 version), the comparison was based on 30 years of annual savings (30 million yen in Dubai, 15 million yen in Japan) with compound interest of 8% in Dubai and 0.2% in Japan. 8% is the initial value, and the system is designed to allow it to be changed to 1-10% on screen.

After 30 years, the result is approximately 3.7 billion yen in Dubai and approximately 500 million yen in Japan, a difference of about 7.9 times. It is a figure that leaves an impression.

Therefore, keeping the premise of the savings amount the same, I replaced only the interest rates with today’s official figures.

• Dubai: Re-depositing annually at FAB’s 1-year fixed rate of 4.15% → 30 years later approximately 1.8 billion yen

• Dubai: If it is 2.85% at Emirates NBD → approximately 1.43 billion yen

• Japan: Yield after deducting 20.315% from a megabank’s 0.700% → approximately 490 million yen

The difference narrowed from about 7.9 times to about 3.7 times. Although it is still large, a significant portion of that difference comes not from the interest rate, but from the premise of the savings amount of ’30 million yen and 15 million yen per year.’ The principal alone is 900 million yen versus 450 million yen, which is already double.

Note that this simulation does not include exchange rates. Depending on how the dollar-yen rate moves over 30 years, the amount converted into yen will fluctuate significantly. I believe it is better to look at the exchange rate movements and whether you can become a non-resident of Japan as a set, rather than judging solely by the interest rate figures.

Who should and should not use Dubai fixed deposits

Based on the figures so far, we categorize it as follows.

It is suitable for those who plan to live in Dubai and hold living expenses in dirhams or dollars, those who want to hold part of their assets in dollars to prepare for a weaker yen, and those who become non-residents of Japan and are no longer subject to Japanese taxes on interest. If you fall into any of these three categories, an interest rate of around 4% is straightforwardly advantageous.

It is not suitable for those who just want to ‘increase their yen’ while living in Japan. A 2.7% appreciation of the yen would wipe out a year’s worth of gains, interest is subject to comprehensive taxation, and there is the hassle of remittances. In that case, it is not too late to decide after comparing it with foreign currency deposits in Japan or other dollar-denominated products.

How to open an account is also a hurdle. ADCB, Emirates NBD, and Standard Chartered state on their official pages that non-residents can open accounts, but the actual screening requires detailed explanations of the source of funds. The differences between residents and non-residents are summarized in the article below.

Recap

• Dirham-denominated 1-year fixed deposits are 2.85–4.5%. The 6% per annum rate comes with conditions such as salary transfers and has a short duration

• Dubai’s interest rates are pegged to the dollar, so they are roughly the same level as US interest rates (the policy rate is 3.90% for both)

• If you deposit 1 million yen at 4.15% for one year and convert it back to yen, you will gain approximately 28,000 yen. About 13,000 yen will be lost in the exchange.

• A yen appreciation of about 2.7% will wipe out a year’s worth of interest. The outcome is determined more by exchange rates than by interest rates.

• If you continue to live in Japan, interest is subject to comprehensive taxation. There appears to be no public deposit insurance in the UAE.

The FAB interest rate page was just updated on October 30th. Please check the official page on the day you intend to make a deposit.

A list of account types and how to open them for each bank is summarized in the Dubai Bank Account article on the Overseas Startup Navi website.