National Bonds, its prize money and profits

Believing in luck is a completely different thing and relying on luck for getting rich is another. People who dream and commit to their dreams invest very sensibly and have a passion of taking risks for high returns. Taking risk does not mean gambling with your luck rather it means walking with your luck to fulfill the most passionate of dreams by taking calculated risks.

People are often lured by the current market situation and most service or job minded people people have a very narrow vision of security, which might mean a secure future without involving risks. These are the people who often get lured into the saving schemes legally started by banks, financial institutions, insurance companies or governments and private entities.

Many companies float their stock and go public for liquidation of assets while some issue bonds. Even the government does that to assure the low risk involved and the guarantee of the capital. While most bonds are purely issued by luring people to save a bit of their income for the future and by handing out huge prize money, “The National Bonds Corporation” has gone a step ahead by declaring itself Shariah Compliant and handing out a tiny bit of profit or whatever they might call, on the capital investment. The region where “National Bonds” operate is widely dominated by Muslims who prefer Islamic and Shariah Compliant financial products, which are rare to find even if approved by a council. The complexity of being Shariah Compliant is far more then what could be including in this article and should be left to a future one.

National Bonds are issues by a non-governmental institute and are legal. The company apart from issuing profits on the capital investment also has set aside “if you are lucky” deals which i call gambling and do not believe in. Luck and hard work (which does include financial investment) go hand in hand. The company gives out more than a million UAE Dirhams in prize money to bond holders every month. Which might accumulate into about a 150 Million probably in a Year. The exact amounts are not stated here as it is irrelevant to what the issue with National Bonds is.

More than half a million people have invested in National Bonds due to high expectations of winning these lucrative prizes and advises for saving for a better future.

With inflation on the rise a thousand Dirhams saved today might be worth only a few hundreds in a few years. The case is evident all over the world. The purchasing power of any currency in the world has declined and therefore it is just not sensible to save a commodity or whatever money is called for a far off future. As far as National Bonds is concerned the profits that they declare at the end of each year are just figures without meaning. If on a 1000 AED one is to get only 65 AED or as for 2009’s profit’s about 38 or something after a whole year does it make sense. The value of the amount has already depreciated in terms of what it could buy after a year and the value would be greater then the accumulated profit. Just to cite an example here, in December 2008,  5 KGs of a certain brand of rice at Carrefour was worth AED 16 while the same thing was priced AED 32 in December 2009. It was a tremendous growth in the pricing of all commodity and consumables, while a hand full stayed the same and yet a minor percentage has decreased.

What would the saving have done, if it was meant for a year? What would the profit that it had generated resulted to? National Bonds are definitely not so beneficial on the whole, even if someone wished to save on it, though I am not against saving totally, but surely the return of profit does not just mean saving only. It has to do with investment where it seems to be a failure. Rather then giving out millions in prize money in a lottery system, it would have been better if it focused more on giving out larger profits to the extent that these huge prize amounts also be distributed in the same way.

All said the verdict is that though the entire corporate and its functionality is legal it still is based on a “life is a gamble” thinking or maybe it just displays or projects such an idea.

All the figures and amounts stated above are just vague examples and not accurate calculations. Exact figures can be found on These are totally personal views/suggestions and are not endorsed by any entity.

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