Progressive Investment plan – Overview

Investment is the term given to purchase a good/ an asset to generate an income not for today’s consumption but for tomorrow’s asset creation. Good investment planning paves a way to turn your dreams and aspirations into reality.

Progressive Investment Plan

Progressive Investment Plan is a 2-in-1 investment program that gives you the opportunity to find the investment that meets your financial personality and objectives. Here, funds are divided equally depending on the duration of each investment plan, where one part of the fund is invested in equity and the others remain in time deposit on a monthly basis.

Progressive investment options in Malaysia

There are a wide variety of investment options available in Malaysia. Let us take a look at it in detail.

Fixed Deposit

Fixed Deposits or Time Deposits offer a fixed and guaranteed rate of return on your investment. Almost all banks in Malaysia offer these types of accounts. Fixed deposits offer significantly higher interest rates than savings accounts while minimizing the risk associated with other high-risk investment products.

Unit Trust

Unit Trust is a form of collective investment that allows investors with similar objectives to pool their funds for investment. These provide small investors a chance to invest in stocks, shares, bonds and other capital-market instruments. Their professional management, high liquidity and small entry requirements make them attractive to investors. Unit trusts enable investors with limited time and knowledge to take advantage of the higher returns from the capital markets.

Gold Investment

Gold forms another great investment avenue. It has been an asset since the beginning of mankind’s evolution and across cultures. So, it is not surprising that gold is a favoured asset here in Malaysia as well. Gold investment can be made either in physical form or by means of “paper gold”. Physical Gold investments can be made by buying gold jewellery, gold coins, gold wafers and gold bars from jewellers. Investing in paper form is via Gold Investment Accounts of some banks.

An important point that investors should be aware of is that there will always be a difference between the selling and buying price of gold. This difference represents the profit for the Gold Trading organization. So, if you wish to ensure a profit make sure that the price at which you are selling is higher than the price at which you bought the gold.

No one can predict when the market rate will rise or fall and it depends on the market conditions. So invest a fixed sum of money regularly over a fixed period regardless of market conditions. These investment plans helps you to Invest progressively to manage market volatility.

Best Fixed Deposit Accounts To Invest In

Best fixed deposit accounts to invest in

Best fixed deposit accounts to invest in

Fixed Deposits or Time Deposits are fixed interest savings products offered by almost all banks in Malaysia. We’ve tried to put together a few tips to help you select and invest in the best fixed deposits available, appropriate for your needs:

Understand your needs – Try understanding your exact needs/requirements through the following questions:

What is your investable corpus? This is the amount that you can set aside.

What is your investable tenor? This is the period for which you invest in an FD.

What is your risk profile? Are you willing to invest in market-linked Fds? Or do you want a safe, guaranteed-return FD.

A fixed deposit involves depositing a sum of money for a fixed period of time ranging from a month to a few years. Premature withdrawals (before end of tenor) could potentially lose you all the interest earned as well as making you liable to pay a penalty (depending upon the product’s terms and conditions). So, check whether you can (i) set aside an investable corpus and (ii) for the given time period.

Zero in on the product of your choice – Though many people consider returns to be the sole factor on which to rate fixed deposits, your particular requirements may vary. Criteria like minimum deposit requirements, minimum/maximum deposit tenor, level of customer service provided at the deposit taking bank/financial institution, flexibility to make partial withdrawals, availability of overdraft against fixed deposits, automatic renewal of deposits upon maturity, auto-credit of interest earned to your CA/SA etc could impact your decision to go with a particular deposit product.

Consider alternative avenues – Fixed Deposits come in several flavours. In addition to the “conventional” deposit products there are other deposit products like Foreign Currency Fixed Deposits, Islamic Deposits and Cooperative bank deposits.

Foreign Currency Deposits have become popular as they tend to provide higher returns than conventional deposits but are subject to exchange risk. 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.

Islamic deposits are Shariah-compliant products tool that provide “Halal” returns. Mudharabah, Murabahah and Wakalah are the main types of fixed deposit options available under Islamic Banking. The customer deposits his money with the bank for a fixed duration. The bank will invest the monies so deposited in Shariah-compliant ventures and the proceeds are divided, between the investor and the bank in it’s capacity as a manager, at a pre-agreed ratio.

Fixed deposits with cooperative banks have tended to provide high returns with comparatively low minimum deposit requirements. However, unlike conventional or Islamic FDs, they are not eligible for PIDM protection; you will, however, get protection from the Ministry of Finance under the Development of Financial Institutions Act (DAFIA).

If you are interested in high interest rates with conventional deposits consider Kids Deposits, Seniors’ Deposits and deposits accompanied by promotions.

Best Tips For Investing In Fixed Deposits

Best tips for investing in Fixed Deposits

Best tips for investing in Fixed Deposits

Fixed Deposits (FD) or Time Deposits are accounts that offer a fixed, guaranteed rate of interest for a fixed time period. Fixed Deposits have remained very popular amongst Malaysians despite the emergence of several, new investment products. Here are a few tips for making the best of your fixed deposit investments:

Understand the types of Fixed Deposits on offer – The following types of fixed deposits are offered in Malaysia: conventional, guaranteed-return Fixed Deposits, Islamic Fixed Deposits and Foreign Currency Fixed Deposits for the investor who is prepared to risk exchange rate fluctuations for higher returns. Understand the nature of each of these deposit categories and use them appropriate to your investment goals.

PIDM protection – Ensure that your Fixed Deposit investment is eligible for PIDM protection. This protection extends to all types of bank fixed deposits up to a limit of RM250,000 per depositer per member bank. If your investable corpus is more than this amount, you can still get PIDM protection for the entire sum by breaking up the sum under different accounts like joint accounts with your mother, father or spouse. Under PIDM rules such joint accounts are also eligible for separate protection up to RM 250,000 each provided that each of the joint accounts has a different set of account holders.

FD Promotions – One way of enjoying higher interest rates on your FDs is by investing through promotions. Even if you don’t get higher-than-standard interest rates you could get “value-for-money” gifts.

Kids / Senior Accounts – Kids and Seniors’ accounts generally tend to give slightly higher rates of interest on FDs. So, try and park your money in your child or parent’s name especially if it is a substantial sum and you wish to invest it for a longish period of time. The extra interest earned is not to be sneezed at.

Cooperative Bank Deposits – These provide some of the best FD interest returns available in the market. For example, a one month (minimum RM 1,000) deposit with MBSB provides 3.3% returns; the Bank Rakyat Deposits Account-i provides a return of 3.6% for a 3-month deposit with a minimum deposit of just RM 500.

The drawback is, these deposits are not eligible for PIDM protection; you will, however, get protection from the Ministry of Finance under the Development of Financial Institutions Act (DAFIA).

Very short tenors – If you are foreign exchange-savvy use Foreign Currency Fixed Deposits as they offer very short-range tenors ranging from overnight to a week or a couple of weeks. Conventional deposits are only available one month onwards.

Partial Withdrawals – Most banks levy a penalty fee on premature withdrawals and you may even lose the interest accrued. But what are you to do if you require emergency cash? Check for an FD that permits partial withdrawals.

Overdraft Facility – Another way of accessing emergency cash is through an overdraft collateralized against your FD.

Automatic deposit renewal – Wouldn’t it be nice if your FD gets automatically renewed upon maturity? Or, the profit/interest is credited to your savings or current account while the principal gets renewed. Check for an FD that allows you to “program” what happens on its maturity.

The Citibank Time Deposit allows you to 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. And, by default, your deposit together with the interest earned is automatically renewed.