• Fixed Deposits in Malaysia

    A Fixed Deposit or otherwise commonly known as FD is form of investment offered by almost every single bank in the world. In this type of investment, a customer is required to deposit a pre-determined amount of money into the account for a specific duration of time. The bank then pays the depositor an interest on the amount deposited. The rate of interest offered is decided upon during the time of investment and is usually paid out at maturity along with the principal amount.

    Fixed deposits are a great way to maximize one’s savings. Not only do they keep the deposit amount safe but also offer a higher rate of interest than standard savings accounts. The main distinguishing feature between the fixed deposit and a savings account is that the depositor will not be able to access the funds until the tenure chosen is completed. Fixed deposit is a great way to start off investing as it is a hassle free process. There is no learning curve involved and depositors only need to sit back and wait for maturity. Moreover, fixed deposits are among the safest forms of investment. The amount deposited into an FD is eligible for protection under PIDM. Even in the unlikely event of failure of the bank, the invested amounts are guaranteed by the government of Malaysia. The fixed Deposits offered by various banks in Malaysia are compared in the table below.

    Compare Fixed Deposit Interest Rates in Malaysia

    Fixed Deposit Interest Rate Table
    Bank Bank Fixed Deposit Rates Minimum FD Amount Interest Rates (% p.a.)
    1 2 3 4
    Ambank Fixed Deposit Rates RM5,000(1-Month) RM500 for subsequent tenures. 3.50 3.50 3.60 3.65
    Bank Rakyat Fixed Deposit Rates RM 500 4.10 4.20 4.25 4.30
    CIMB Fixed Deposit Rates RM 1000 3.30 3.40 3.50 3.50
    Maybank Fixed Deposit Rates RM 5000(1-Month) RM1,000 (2 Months and above) 3.30 3.40 3.50 3.60
    OCBC Fixed Deposit Rates RM 1000 3.30 3.30 3.30 3.30
    RHB Fixed Deposit Rates RM 500 3.45 3.60 3.60 3.60
    HSBC Fixed Deposit Rates RM 5000(1-Month) RM1,000 (2 Months and above) 3.30 3.30 3.30 3.30

    Significant features of a Fixed Deposit

    Listed below are some of the key features of a Fixed Deposit scheme:

    • This financial product is aimed at helping customers earn a better rate of interest on their surplus funds
    • The amount is deposited just once; further deposits will require opening more Fixed Deposits, money cannot be added to or subtracted from the existing Fixed Deposit
    • The interest received on these deposits is eligible for tax deduction
    • The depositor is generally given a FD receipt in case of offline FD opening; in case of online FD opening, an 8-digit reference number is provided to the customer
    • The interest earned on a fixed deposit can be credited directly into the customer’s account either monthly, quarterly, half-yearly, annually or at maturity of the deposit. The customer is free to choose any one of the above listed options.

    Eligibility Criteria

    All residents who are 18 years or above of age are eligible to open a fixed deposit account. The customer is required to have either an existing savings or a current account with the bank. In case an existing account is not available, it can be opened at the time of applying for the Fixed Deposit.

    Fixed Deposit Tenure

    The tenure for a fixed deposit can range from a few days up to a number of years. This however varies from bank to bank and is generally between 1 month and 5 years for Malaysian banks.

    Partial and Pre-mature withdrawals

    Partial Withdrawals:

    A fixed deposit can be partially withdrawn as and when required but this too depends upon the bank which is under consideration. Some banks allow this feature on certain fixed deposit schemes while others don’t. When a partial amount is withdrawn, the remaining amount continues to earn interest until the end of the deposit period.

    Pre-mature withdrawals:

    A fixed deposit can be withdrawn before it completes the lock-in period. This feature also depends upon the policies of the bank. There are certain deposits for which premature withdrawals are allowed whereas for others it is not so. For some fixed deposits, banks charge a pre-mature settlement fee in case a customer withdraws his deposit before the maturity period.

    Renewal and Withdrawal of Fixed Deposits


    • The existing fixed deposit can be rolled over on maturity for another term which can be same or different than the previous tenure
    • Auto-renewal option can be selected wherein the matured amount will directly be fixed again for the previous availed tenure. The rate of interest in such a case may differ and will depend upon the prevailing market rates.


    • Full fixed deposit amount can be withdrawn at maturity of fixed deposits
    • Premature withdrawal can be done which is subject to an early settlement fee
    • Auto-credit of matured amount can be done on maturity of the fixed deposit

    Nominees for a fixed deposit-

    Two nominees are to be chosen while submitting an application for fixed deposit opening.

    A nominee is a person who is entitled to receive the matured funds in case of depositor’s death. Nominees are required for every fixed deposit request. Certain basic details like name, age, address etc. of the nominee are required to be furnished to the bank. Money accrued in the deposit is not automatically rolled to the family member’s account if the nominee details are not provided to the bank at the time of deposit opening.

    Fixed Deposit Promotions

    Fixed Deposits are one of the more popular methods of investment as they are easy to maintain and require very little involvement.Common fixed deposit promotion include banks offering higher interest rates for FD's, Step Up Fixed Deposits and Fixed Deposits with CASA building. Step Up Fixed Deposits are Fixed Deposits split out into intervals with each successive interval having an increase in the interest rate offered for that period. Fixed Deposit with CASA bundling is combining a FD with a savings or current account. These savings or current accounts will need to be opened with a mandatory minimum deposit which is usually a percentage of the funds being deposited in the FD.

    Advantages of Fixed Deposits

    Fixed Deposits are perfect for anyone starting out in investing. FDs offer a guaranteed return as they accumulate interest till date of maturity. The rates of interest when compared to a savings account is quite high and competitive. They are a passive mode of investment. The investor need not constantly check up on the value of the funds. Once the money has been invested in the FD, it will continue to accrue interest till the maturity date thereby offering a hassle free experience. FD's offer a risk free mode of investment that guarantees return. The risk compared to stock markets are nil. Various schemes are offered by banks, specially on government employees fd, Junior FD,Senior Citizen Fixed Deposit, employees of certain companies and so on. The deposits made are also insured by government agencies such as Perbadanan Insurans Deposit Malaysia (PIDM) that protects and insures fixed deposits in the unlikely case that the bank fails.

    Why opt for fixed deposit

    Fixed deposit is a safe haven when compared to other investment options. It is a popular choice for the first time investors. You get a guaranteed return and it is protected by government insurance. Fixed deposits restrict access to money till its maturity. This ensures that you save the money for the future financial need. If you withdraw the money before its maturity, you will not get any interest earned on the amount deposited. The interest is fixed and you know that by the deposits maturity, you will get a certain amount for sure. The interest is calculated daily but is paid only at its maturity, this makes it a hassle free passive investment. For the deposits kept for over 1 year, you have the option of collecting the interest either annually or monthly. The longest term you can choose in Malaysia for fixed deposit is 5 year.

    FAQs on Fixed Deposit

    What is a fixed deposit account?

    Fixed deposit is a financial instrument that allows you to save the money for a fixed period and offers a high rate of interest when compared to the savings account.

    How does it work?

    To open a fixed deposit account, you have to deposit a chunk of money either in cash or by cheque with the bank. The bank in return gives you a certificate of deposit that mention the amount deposited and the interest that you will be earning on it along with the maturity date. On the maturity date you have to submit the certificate with the bank and withdraw the amount that you deposited along with the interest you earned on it.

    What is the eligibility criteria to open a fixed deposit account?

    Most Malaysian banks allow Malaysian residents and non-residents aged 18 years and above to set up a fixed deposit account.

    What are the documents required?

    You need to carry cash or cheque for the amount that you want to set up the fixed deposit account for. The minimum initial deposit amount is RM1,000 for 1 month and RM5,000 for 2 months and above. You will also need to submit a copy of your MyKad for identification purposes. In case you are opening a joint account along with your spouse or any family member, he or she will have to submit a copy of his or her MyKad.

    How is FD better than savings account?

    On fixed deposits, you can earn high rates on interest on large sum of cash. On maturity you get the principal amount along with the interest. You need to deposit the amount only once in an FD ad cash withdrawals are not allowed hence enabling you to save the money for your future financial needs. Whereas Savings account is used for income savings and cashless spend. It earns a low rate of interest and is continuous in nature. The savings account has a withdrawal limit. If you do manage to save, it won’t earn you enough interest.

    How do I get a higher interest rate on my FD?

    To get a higher interest rate, keep an eye on the FD promotions which most banks run a few times in a year. Before deciding on a bank, compare the interest rates that are being offered by various banks and choose the one that best suits your needs. If you have a lengthy period, you will earn a higher rate of interest on your fixed deposit.

    What will happen if I withdraw my FD before its maturity?

    If you withdraw the deposit amount within 1-3 months, then you will lose the interest earned on the deposit. But if you withdraw after 3 months, then you get to keep half of the interest that was generated.

    Can I open a FD in a Malaysian bank outside Malaysia?

    No, the fixed deposit account must be opened in Malaysian Bank or other financial institution that are located in Malaysia.

    How safe are my Fds?

    Cash deposits in local or foreign banks in Malaysia are protected or insured by PIDM or DFIA. Perbadanan Insurans Deposit Malaysia (PIDM) protects your deposits and will promptly reimburse if the commercial bank fails. The insurance protection does not charge any premium on it either. Development of financial Institution Act 2002 (DFIA) offers guidelines to the banks to promote stability in the financial system.

    Are there different types of FDs that are being offered?

    Yes, there are two main types, one is when the banks will inflate the interest rate during a promotion and the other is bundling the FD with a current or savings account. There are some fixed deposits promotions that include both the step-up and CASA bundling.

    What is FD with CASA Bundling?

    FDs bundled with a current or savings account will offer a better interest rate. But, you need to have a minimum amount deposited in the current or savings account. The amount deposited in the current or savings account is usually a fixed amount or a percentage of the total amount that is invested in the fixed deposit account.

    How can you calculate the fixed deposit interest rates?

    There are Fixed Deposit Calculators available online which makes the fixed deposit interest rate calculation easy. If you have taken a RM1,000 fixed deposit for a period of 3 months for 3% interest per annum, then the interest= (1000*3* 3/12) / 100 = RM7.50.

    News About Fixed Deposit

    • Malaysian banks offering higher interest rates for fixed deposits

      In a bid to attract more deposits, a number of banks in Malaysia are offering interest rates as high as 4.5%. In order to balance out the loan-deposit ratio (LDR), some banks are offering fixed deposit rates as high as 4.5% per annum for a 12-month tenure on a promotional basis.

      In a survey conducted by StarBiz on conventional and non-conventional banks, an average of 100 basis points higher than the board rates were offered as promotional rates. According to the several of the banks' websites, the board rates ranged from 3.3% to 3.7%.

      Malayan Banking Bhd, a conventional bank, offered the highest promotional rate of 4.5% per annum for a duration of 12 months, valid until November 30. A non-conventional bank owned by the Employees Provident Fund, Malaysia Building Society Bhd has also offered 4.5% per annum until December 31, on promotional basis. This offer is for new deposits for a tenure of 18 months.

      CIMB Bank and Public Bank Bhd offered 4.3% for a 12-month tenure. Another non-conventional bank, Bank Rakyat offered 4.1% per annum for a period of 12 months. The promotional fixed deposit rates of Bank Islam and Bank Muamalat were at 3.6% and 3.45%, respectively. A few other banks such as Alliance Bank and RHB Bank, maintaining the 12-month period board rate are offering promotions for different tenures.

      23rd November 2015

    • Growth of Deposit in Malaysian Banks Experiences Staggering Growth

      In Malaysia,Bank deposit growth has seen staggering pace, recorded in a decade’s time in growth, led by fleeing of retail funds towards higher-yielding avenues as well as banks’ with weakening buffers against any unexpected funding needs during a time when the Malaysian economy is losing pace.

      Commercial banks deposits, in total increased by only 4.8% in July. This is the least since it was lower during September 2002, as per the data gathered from the updated data from the central bank. Growth has also been predicted to fall further considering the interest rates offered by Malaysian banks, which is only 3.1% to 4.0% per annum. These rates are only a little over the inflation rate which is approximately 3.0%.

      Also most citizens in the country prefer to invest in realty, equities and other investment avenues over deposits according to financial experts.

      7th October 2015

    • Withdrawal against Flexible Scheme, under the EPF has risen by 72.3%

      An amount of RM 3.12 billion has been withdrawn from the Employees Provident Fund’s (EPF) against the “Flexible Age 55 Withdrawal” scheme in Q2 of 2015.

      It was noted on Monday, that the rise has been observed at 72.3% against the RM 1.81 billion in Q2 period last year. It has also been seen to gain 16.4% against RM 2.68 billion in Q1 2015.

      The EPF added that, 80,890 applications have been given approvals, in Q2 2015, for “Flexible Age 55 Withdrawal”. This was an increase of 36.23% from a year ago at 59,379 (77,865 in Q1 2015).

      It is to be noted that EPF mentioned, “The amount of investment made during the quarter was RM1.55bil, up 29.24% from RM1.20bil in Q2 2014.”

      6th October 2015

    • BNM to maintain current interest rate of 3.25%

      The unanimous opinion of economists is that the benchmark overnight rate will be maintained by Bank Negara Malaysia at 3.25% despite concerns over its currency’s, the Ringgit’s, performance and global uncertainties.

      The Ringgit is performing poorly vis-a-vis its peers and Malaysia’s earnings have dropped about 60% given low oil prices. Malaysia’s economy is also plagued by reduced commodity prices and possible rate hikes in the US. Malayan markets have already witnessed considerable capital outflows.

      The OPR was raised last in July 2014 by 25 basis points i.e. from 3% to 3.25%.

      11th September 2015

    • Umno minister backs local banks over foreign ones

      As per one of the umno ministers in Malaysia, channeling political donations into a local Malaysian bank is far better than depositing it in any other foreign bank. He went on to say that keeping money in a Malaysian bank is more transparent and accountable for the government than to deposit its political funds into some bank account with a foreign bank in a foreign land.

      Depositing funds with a local entity would mean easier checks on where the money comes from and how it is being utilized. The minister said that this way anybody could simply ask the prime minister about utilization and source of funds and all the information can be obtained in a single click. Transparency of political funds is a great political concern for people not just in Malaysia but in almost every other country. Political parties are able to position themselves better and win the trust of the general public if the fund they receive are regularly declared to the public.

      11th August 2015

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