What Are Fixed Deposit Accounts?
Fixed Deposits (FD) or Time Deposits are accounts that offer a fixed, guaranteed rate of interest for a fixed period of time.
What Factors Determine Fixed Deposit Rates?
Fixed deposit rates are determined by the bank issuing the fixed deposit. However, there are a number of factors that influence the bank’s decision on fixed deposit rate determination. These include changes to the OPR or the Overnight Policy Rate (determined by Bank Negara Malaysia; this is the rate at which depository institutions (banks) lend to one another overnight), the Base Lending Rate (the rate determined by conventional financial institutions based on their cost of lending to consumers), the BLR’s successor, the Base Rate (BR), the Base Financing Rate (BFR; the rate determined by Islamic financial institutions based on their cost of financing to consumers), Statutory Reserve Requirement (the amount of money a bank should have on deposit with the BNM at zero interest) and other factors.
What Are The Rates Currently Available For Fixed Deposits In Malaysia?
Conventional Fixed Deposits
The Citibank Time Deposit is available for tenures of 1 month to 60 months. The minimum deposit for a month is RM 1,000 and for 2 to 60 months is RM 5,000. Overdraft facility is available against the fixed deposit and partial withdrawals are also allowed (in multiples of RM 5,000; the balance will continue to earn interest).
The MYR Fixed Deposit from OCBC is available in a variety of tenures ranging from 1 month to 5 years. If you have a fixed deposit of RM5,000 and above, you may also be able to avail an overdraft against your deposit. The minimum deposit is RM 1,000 for tenures of 2 months and above and RM 5,000 for a tenure of 1 month.
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 Hong Leong Senior Savers Flexi FD and the Hong Leong Junior Fixed Deposit offer interest rates of 3.35% p.a. This compares favourably with Hong Leong’s Fixed Deposit Account that offers interest rates ranging from 2.95% to 3.20%.
Foreign Currency Deposits
The Foreign Currency Fixed Deposit from CIMB Bank is available in 10 foreign currencies. You can place deposits for tenures of 1 Day, 1 Week, 1 Month and up to 1 Year. Interest rates vary with currency and tenure. This deposit is eligible for PIDM protection.
The Foreign Currency Deposit from Standard Chartered Bank is available in tenures ranging from 1 week to 1 year; these deposits are also eligible for PIDM protection.