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.
We will try and look at a few of the best fixed deposit accounts in Malaysia from an interest-paying perspective. But before we do that, it is important to bear in mind that there a lot more variables that affect the attractiveness of the high-interest paying fixed deposit. These could include tenor, minimum deposit amount, availability of overdraft against the fixed deposit, requirement to have a CA/SA with the bank, availability of partial withdrawals, daily or monthly interest calculation, penalties and charges applicable in case of premature withdrawal etc.
Rates may also differ for foreign currency deposits and for deposits made by senior citizens (we will not look at these deposit types in this article). Moreover, different banks keep coming up with fixed deposit promotions. You can generally get higher rates of interest through such promotions than is normally possible. But still, it is important that you check the terms and conditions of such promotions before you open an FD through these promotions.
Now is a pretty good time to invest in fixed deposits as their rates have been going up since Bank Negara raised the overnight policy rate (OPR) by 25 basis points on July 14, 2014. Ok, here is the promised selection:
Hong Leong Bank FD Promotions – You will be offered 4% p.a. for a 15 month deposit and 3.85% p.a. for a 12 month deposit. The promotional period runs from 01st July 2014 to 31st October 2014. Minimum deposit amount is RM 10,000 but you will also be required to open a Current or Savings Account with a minimum deposit of RM 1,000. 10% of the FD placement will be earmarked in the CA/SA for a period of 6 months. You will also have a shot at winning the grand prize of a corner terrace home at Emerald Rawang, Selangor.
Alliance FD Gold – This FD provides an interest rate of 3.4% for tenors ranging from 12 to 24 months with negotiable rates for higher tenors. The minimum deposit amount is RM 30,000. Interest is credited into an account of your choice monthly. You can also make partial withdrawals in multiples of RM 1,000 subject to a minimum balance maintenance of RM30,000. An overdraft facility on a 1:1 basis is also available against the Alliance FD Gold placement amount.
Citibank Time Deposit – Interest rate ranges from 2.95% over a tenor of 1/2 months to 3.10% for a tenor of 6-8 months to 3.2% for 12 months – all of which is pretty standard. You can, however, make partial withdrawals in multiples of RM5,000 while the remaining balance continues to earn the original rate of interest. You also have the option of pledging your Time Deposit for an overdraft facility. Minimum deposit – for 1 month, RM 5,000 and for 2 to 60 months, RM 1,000.
Cooperative bank deposits – You can also get excellent rates from the following banks:
1 month tenor – 3.3% with MBSB with a minimum deposit of RM 1,000.
Bank Rakyat Deposits Account-i – 3 month tenor – 3.6% with a minimum deposit of just RM 500. This deposit account also provides interest rates of 3.65% for 6 months, 3.75% for 9 months, 3.9% for 12 months, 4.4% for 60 months and 4.5% for tenors more than 60 months.
Cooperative bank deposits are not eligible for PIDM protection; you will, howver, get protection from the Ministry of Finance under the Development of Financial Institutions Act (DAFIA).