While Fixed Deposit is a not a favorite form of investment for many investors, there are still many of us including myself who have a percentage of savings kept in FD for security purposes and immediate liquidity.
A basic rule of financial management is to have at least 6 months worth of salary available. In a unlikely scenario where you lose your job, you might need immediate liquidity to pay off my existing commitments such as insurance, loan repayment, etc.
The question is, are you leaving your savings to rot by inflation or are you smart enough to grow it?
In my case, 6 months salary saving that I have is not meant for long term investment and neither do I wish that money to be exposed to high risk investment.
Hence, the only option available (that I know of) is Fixed Deposit. Similar to investing in unit trust, choosing the right bank that offers the best Fixed Deposit rate is vital to ensure that I get the best bang for my savings. I managed to obtain a few existing "normal" fixed deposit rate offer by our local banks as shown below:
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| Conventional FD Rate for 12 months tenure as of 4 Feb 2013 |
Not included here is the tenure for Bank Rakyat which offer 4.01% rate. Being a Cooperative Banking Institution, your FD savings in Bank Rakyat is not protected by PIDM.
Find out more about Bank Islam FD rates HERE.
If you look at the Fixed Deposit rates above,AmBank has the best conventionl FD rate for a 12 month tenure at 3.40%. Now you can increase the FD rate from AmBank to 3.60% per annum via an ongoing current promotion from AmBank:
Promotion Propoganda : Bonus Rate for Life
Bank : Am Bank
Promotion Period : 4th January 2013 - 28 February 2013
Key Terms & Conditions:
- The Campaign is open to all new customers who opened an eFixed Deposit (“eFD”) via AmOnline with a minimum placement of RM 5,000 (in a single transaction) and existing customers who made a new placement of not less than RM 5,000 in eFD (in a single transaction) via AmOnline during the Campaign Period (“Eligible Customers”).
- The eFD placement must be for the tenure of 3, 6, 9 or 12 months.
- The following persons / entities are NOT eligible to participate in this Campaign:-
- (a) Sole-proprietorships, Partnerships, Companies, Charitable / Non-profit Organizations / Societies, Government / Statutory Bodies, Corporate Customers and other non-natural persons; and/or
- (b) Employees (either permanent and/or contract) of the AmBank Group (including its subsidiaries and related Companies) ; and/or
- (c) Individuals below the age of eighteen (18) years old.
Cons:
- The eFD rate is only available for one tenure only. Once the tenure of your FD end say after 12 months, you will only enjoy the existing FD rate without the additional 0.2%.
If you're interested, head on over to the your local AmBank to find out more!
Now what about the 4% per Annum Fixed Deposit Rate?
Rest assured what is written on my article title is not false advertising. There is a current promotion from MACH by Hong Leong Bank that is capable of giving you 4% per annum FD rates for a period of 12 months. Quite sure most of you have not heard of this!
Promotion Propoganda : Relax, Your Money is Working For You
Bank : MACH by Hong Leong Bank
Promotion Period : 7th January 2013 - 7th March 2013 (or when RM100 million quota is taken up)
Key Terms & Conditions:
- The promotional FD interest rates are as below:
- 6 months: 3.60% p.a.
- 9 months: 3.66% p.a.
- 12 months: 4.00% p.a.
- Customers are required to deposit a minimum of Ringgit Malaysia Ten Thousand (RM10,000) per Accountholder for each new placement into Mach FD to enjoy the promotional FD interest.
- This promotional FD interest shall be applicable for new placements into Mach FD, the total of which shall not exceed the amount of Ringgit Malaysia Two Hundred and Fifty Thousand (RM250,000). In the event the amount deposited into Mach FD exceeds RM250,000, HLB reserves the right to claw back and deduct from the Customer’s linked Money Box Deposit Account any interest paid in excess.
- The Campaign is only valid for new placements of up to RM250,000 per Customer throughout the Campaign Period.
- Auto-renewal of promotional FD interest is not allowed. Upon maturity, the Mach FD shall be renewed at the prevailing board rate of the contracted tenure.
- 6For any premature withdrawal of FD whether voluntarily or involuntarily, the Association of Banks in Malaysia (“ABM”) rules shall apply on the withdrawn amount. Any paid interest shall be clawed back and deducted from the principal FD amount upon withdrawal.
- No interest is payable if the placement is uplifted in less than three (3) completed months.
Cons:
1. If you uplift your Fixed Deposit below three months from the completed tenure, you will lose all the interest earned. (refer to point 7 of the Terms & Conditions)
2. The promotion FD rates is only available for one cycle after which the tenure ends, it will revert back to the existing normal FD rate of this bank (refer to point 5 of the Terms & Conditions). Current 12 months prevailing FD rate for MACH is 3.25%. Not too bad!
3. You need to open up an account called Money Box from MACH branches located only in the KL and Selangor area. (find locations HERE).
Overall Summary
Malaysian in general tend to be attracted by the so called "propoganda" promotions from Banks. When I was a lot younger, I was naive just to believe what I see from promotions. Terms and conditions were too wordy to read and too difficult to understand especially with all those financial jargons thrown in.
In honest truth, FD promotions in way create competition among banks. These promotions are additional perks that you can enjoy if you're already thinking about placing your money in a Fixed Deposit account. Instead of just walking in and placing your money blindly into an FD account at 3.25% rate, why not make use of these promotion to earn a little more?
Cheers and Happy Investing!
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