Fixed Deposits (FD) or Time Deposits are accounts that offer a fixed, guaranteed rate of interest for a fixed time period. Fixed deposits, in general, offer much more attractive rates of interest than standard savings accounts and have hence enjoyed immense popularity with generations of Malaysians. These tips can try and help you if you want to maximize the interest income on fixed deposit:
Junior & Senior Fixed Deposits – These deposit products are aimed at children (to help them inculcate the savings habit) and seniors (usually the over 50s). They carry higher interest rates than standard FD products. You could try opening FDs in your children / parents' name(s).
The BSN Term Deposit is available at an interest rate of 3.2%. You could also apply for a joint account or trust account. On maturity, the deposit is automatically renewed at the prevailing board rates. Although this FD product is not insured by PIDM it is 100% guaranteed by the government under the Bank Simpanan Nasional Act.
The Public Bank PB Golden 50 PLUS FD Account offers interest rate that ranges from 3.25% (on one and two month tenors) to 3.45% (for tenors of 12 months and above). This is meant for those over 50. This product also comes with a lot of other benefits including 50% discount on rental and renewal of a safe deposit box, 50% discount for will writing or creating a Trust with PB Trustee Services Berhad, discount on PB's sale rates for purchase of foreign currency and more.
The BSN Term Deposit is available at an interest rate of 3.2%. You could also apply for a joint account or trust account. On maturity, the deposit is automatically renewed at the prevailing board rates. Although this FD product is not insured by PIDM it is 100% guaranteed by the government under the Bank Simpanan Nasional Act.
The Public Bank PB Golden 50 PLUS FD Account offers interest rate that ranges from 3.25% (on one and two month tenors) to 3.45% (for tenors of 12 months and above). This is meant for those over 50. This product also comes with a lot of other benefits including 50% discount on rental and renewal of a safe deposit box, 50% discount for will writing or creating a Trust with PB Trustee Services Berhad, discount on PB's sale rates for purchase of foreign currency and more.
Co-operative Bank Deposits – Cooperative deposits enjoy the reputation of providing some of the best FD returns in the market and for short tenors as well. Take the case of the Term Deposit-i Account from Bank Rakyat. It is an Islamic product based on the concept of Tawarruq. It offers interest rates ranging from 3.40% (for 1 month) to 3.70% (for 3 months) to 3.90% (for 6 months) to 4.10% (for 12 months) all the way up to 4.30% (for 48 months).
Foreign Currency Fixed Deposits – These accounts allow you to open deposits in a range of foreign currencies. Foreign Currency Deposits have become popular as they tend to provide higher returns than conventional deposits and in foreign currency but are subject to exchange risk. These deposits have become popular since the liberalization of the Foreign Exchange Administrative Rules on the 01st of April 2005. They are also popular with those who have foreign currency earnings, wish to invest overseas, have business interests outside Malaysia and/or wish to educate their children overseas.
Take the Foreign Currency Fixed Deposit from Alliance Bank. It offers up to 8 foreign currencies, tenors from 7 days to 12 months and interest rates that range from 0.10% to 3.00% depending upon the tenor and the currency. For instance, you get an interest rate of 3% p.a. on NZD for a tenor of 7 days.
Step-up Fixed Deposits – These fixed deposits split the deposit tenor into periods and offer different rates of interest for each period. The interest rate offered during successive periods becomes higher till it reaches the highest interest return / advertised rate during the final period.
The Public Bank Step Up FD is an example of one such product. You get 3.95% p.a. for the first 3 months; on the next rollover for 3 months the interest rates climb up to 4.18% and on the second rollover (for the next 3 months) the interest rate moves up to 4.38%.
Foreign Currency Fixed Deposits – These accounts allow you to open deposits in a range of foreign currencies. Foreign Currency Deposits have become popular as they tend to provide higher returns than conventional deposits and in foreign currency but are subject to exchange risk. These deposits have become popular since the liberalization of the Foreign Exchange Administrative Rules on the 01st of April 2005. They are also popular with those who have foreign currency earnings, wish to invest overseas, have business interests outside Malaysia and/or wish to educate their children overseas.
Take the Foreign Currency Fixed Deposit from Alliance Bank. It offers up to 8 foreign currencies, tenors from 7 days to 12 months and interest rates that range from 0.10% to 3.00% depending upon the tenor and the currency. For instance, you get an interest rate of 3% p.a. on NZD for a tenor of 7 days.
Step-up Fixed Deposits – These fixed deposits split the deposit tenor into periods and offer different rates of interest for each period. The interest rate offered during successive periods becomes higher till it reaches the highest interest return / advertised rate during the final period.
The Public Bank Step Up FD is an example of one such product. You get 3.95% p.a. for the first 3 months; on the next rollover for 3 months the interest rates climb up to 4.18% and on the second rollover (for the next 3 months) the interest rate moves up to 4.38%.
General Tips
Tenors – The longer the tenor of a fixed deposit, interest rates are more likely to increase. Take the Unfixed Deposit from CIMB Bank for example. It provides an interest rate of 3.15% for tenors of 1 and 2 months, 3.20% for tenors between 3 to 5 months, 3.25% for tenors ranging from 6 to 11 months and on up to 3.60% for a tenor of 60 months.
Promotions – They are another good way to get more from a standard fixed deposit. For example, HLB Bank is offering a 3-month FD promotion (01st Mar 2016 to 30th April 2016) that offers an interest rate of 4.20% p.a. for a 3 month tenor. Minimum placement amount is RM 10,000 and the maximum placement amount is RM 5,000,000.
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