• 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

    What is a Fixed Deposit?

    Fixed deposit accounts are a type of investment or saving scheme offered by banks to customers for a fixed period of time. An FD offers a higher interest rate than a standard savings account. If you are looking for a short-term or long-term saving plan with zero risk, fixed deposits are the way to go. Fixed deposits are also known as term deposits. The tenure or term of a fixed deposit can range from 1 month to 5 years. You can also open joint FD accounts with your spouse or other family members.

    Features and Benefits of a Fixed Deposit

    Fixed deposits make good saving schemes as you end up with higher interest earnings than a standard savings account. FDs also make good investment schemes as they are not associated with risks like that of mutual funds. Listed below are some important features of an FD:

    Fixed Deposit Malaysia

    Minimum deposit: There is a minimum deposit limit for FDs, ranging from RM1,000 to RM5,000. Remember, the higher the deposit amount, the higher the interest earnings on maturity.

    Fixed deposit term: The tenure or term of an FD account can be anywhere from 1 month to 5 years. On reaching the end of your FD term, also known as the maturity date, you can withdraw your savings or renew it for another term.

    Interest rate: The interest rate for an FD is higher than a standard savings account. The predetermined monthly or yearly interest rate remains the same throughout the tenure of your FD account.

    Guaranteed returns: As FDs are not associated with risks, you will receive guaranteed return on investment. On maturity, you will receive the principal deposit amount and the interest earned.

    Withdrawal: Unlike a conventional bank savings account, you cannot withdraw funds from an FD account before the maturity date. If you decide to make early withdrawals, then you will lose out on the interest earned. Premature withdrawal from your FD account after 3 months will result in you losing out on half the interest earnings.

    Renewal: You can always renew your FD term on reaching the maturity date. Auto-renewal of your FD can be for the same tenure but not necessarily the same interest rate.

    Joint account: You can open a joint FD account with your spouse or a family member. To open the account, both you and your spouse will have to provide your respective MyKad for identity proof.

    How do I open a Fixed Deposit Account in Malaysia?

    When it comes to saving money, there is no better time than the present. The process of opening a fixed deposit account is simple and easy once you have identified the scheme that best suits your needs.

    • Compare the interest rates and terms offered for different fixed deposit schemes by various banks in Malaysia.
    • Choose the one that offers the highest interest rate to generate better earnings on maturity.
    • If you choose to open a fixed deposit account in a bank where you already have a savings account, it can be done through internet banking. Some banks may offer special FD rates to loyal customers.
    • To open a fixed deposit account in a bank where you don’t have an existing savings account, visit the nearest bank branch.
    • You will have to provide your MyKad for identity proof.
    • An initial minimum deposit has to be made via cash, cash transfer or cheque.
    • After you have deposited a sum of money, the bank will issue a certificate with details like the principal amount deposited, interest rate, term, and maturity date of your fixed deposit account.

    You have to furnish the certificate in the case of withdrawal, termination or renewal of your FD account.

    Guaranteed Return on Investment

    Unlike mutual funds, FDs are not associated with any investment risks. Therefore, you will get guaranteed return on investment once your FD reaches maturity. As long as you don’t make a premature withdrawal from your FD account, you will receive the principal deposit amount and the interest earned. For early withdrawals in the first 3 months of your FD term, you stand to lose all the interest earned. For early withdrawals after 3 months, you will lose half of the interest earned.

    Competitive Fixed Deposit Interest Rates

    Fixed deposits offer higher interest rates than a conventional savings account. If you are looking for long-term benefits, then opt for an FD. A savings account gives you the liberty to withdraw money whenever you want. With an FD account, you can withdraw the money only on reaching the maturity date. Most banks in Malaysia offer higher promotional rates than board rates to attract new customers and retain the existing ones. Keep an eye out for promotional rates and transfer your funds to an FD scheme with a higher interest rate.

    Difference between a Savings Account and Fixed Deposit Account

    Saving up money for your future use is a good way of not incurring debts. Depending on the consumer’s needs, banks offer different savings schemes like FD, RD, and conventional savings account. There are several differences between an FD and a savings account as listed below:

    Fixed deposit Bank savings account
    You can deposit money only once into an FD account. The minimum deposit amount of an FD is higher than a savings account. You can deposit more funds into your FD account on renewal. You can deposit money any number of times in a savings account. The minimum deposit amount can be as low as RM20.
    Banks offer high interest rates on FDs. Banks offer low interest rates on standard savings accounts.
    FDs have fixed tenure or terms. You can renew the term on reaching maturity. No tenure for savings accounts. You can close the account whenever you deem necessary.
    Cash withdrawal allowed only after maturity of your FD. Premature withdrawal will result in you losing out on interest earned. You can withdraw cash anytime you want until you run out of savings.
    FDs offer long-term benefits with higher interest earnings. Savings accounts offer short-term benefits like withdrawing cash whenever you want for your everyday expenditure.

    Types of Fixed Deposit Accounts

    Depending on the needs of the consumers, banks offer different types of FD schemes to meet their saving or investment requirements. The only way to earn more return on your investment in an FD is to have a higher interest rate. Listed below are the 2 types of methods used by banks to inflate the interest rates on FDs in Malaysia:

    • Step-up fixed deposit
    • Fixed deposit with CASA bundling

    Step-up Fixed Deposit

    A step-up FD scheme will have varying interest rates for different segments of your FD tenure. The interest rate will progress or step-up with each segment. The advertised interest rate of a step-up FD will usually be implemented only for the final segment or month of your FD term. Therefore, the effective interest rate (EIR) will be lower than the advertised FD rate. For an FD term of 6 months if the bank advertises an interest rate of 6.88% p.a., then the interest rate for the first 2 months will be 3%, next 2 months will be 3.15%, 5th month will be 3.24%, and 6th month will be 6.88%. The EIR, in this case, is 3.73% p.a. which is lower than the advertised rate.

    Fixed Deposit with CASA bundling

    When an FD account is bundled with a current or savings account, it is called CASA bundling. The banks will inflate the interest rate on your FD if you put a percentage of your FD amount into a current or savings account with the same bank. For instance, if you are depositing RM10,000 in an FD account, then you will have to put RM5,000 in a current or savings account with the same bank. Therefore, you are investing RM15,000 in total. Keep in mind that the current or savings account will have a low interest rate, generating low interest earnings.

    Types of Islamic Fixed Deposit

    An Islamic fixed deposit account is compliant with the Sharia banking laws where payment or acceptance of interest on deposit is prohibited. There are 3 types of Islamic FD accounts:

    Mudharabah Deposit: In this type of FD account, you will have to deposit a sum of money for a fixed period of time with the bank. The bank will invest the funds in the Sharia-compliant investment avenues. The profits made from the investments will be split between you and the bank in an already agreed upon profit sharing ratio.

    Murabahah Deposit: As there is no interest rate feature involved in an Islamic FD account, profit is generated as per the Sharia concept known as Murabahah. You will deposit a sum of money in your FD account in return for the purchase of a commodity approved by the Sharia principle. At the end of your term deposit, you will sell the commodity back to the bank at a profit margin predetermined by the bank and you.

    Wakalah Deposit: In this type of FD, the bank will manage your funds in Sharia-compliant investment avenues to ensure you get the expected returns.

    Plan your FD Investments well

    Compare the interest rates and terms on different types of FD schemes offered by various banks. Choose the one offering the highest interest rate. Determine whether you want short-term or long-term benefits. The optimum way to save money will be to put your funds in an FD as well as a standard savings account. You can deposit the majority of your money in an FD and let it sit for a few years to generate higher returns while the remaining can be put in a savings account to be withdrawn whenever you want for your everyday expenditure. You can also open a joint account with your spouse or another family member to spread out your funds in various FD accounts in the same bank. Some banks offer special FD rates to loyal customers. Keep an eye out for promotional rates offered by banks on FDs to attract new customers and retain the old. Promotional FD rates are higher than board rates.

    PIDM protection for FD Investments in member banks

    FD accounts opened in member banks are protected by Perbadanan Insurans Deposit Malaysia. PIDM protects FD investments of up to RM2,50,000 per depositor per bank. You don’t have to pay any insurance premium or fee for PIDM protection. If you have more than RM2,50,000 to deposit, then spread out your investment by opening an individual FD account as well as a joint FD account with the same bank, or put your savings into an Islamic FD account.

    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.

    Fixed deposit FAQs

    Listed below are some of the frequently asked questions about fixed deposits in Malaysia:

    • What is a fixed deposit?
    • FDs are a zero-risk investment or savings schemes offered by banks to customers who are interested in gaining long-term benefits. You can invest your money in an FD account for a fixed period of time and earn higher returns than a standard savings account.

    • When can you withdraw money from an FD?

      Unlike a savings account, cash withdrawal is allowed only on maturity in the case of an FD account. Premature withdrawal of funds in the first 3 months of your FD term will result in the loss of your interest earnings. Early withdrawal after 3 months into your term will result in you losing out on half the interest earned.

    • How to increase your savings in an FD?

      Keep an eye on the promotional FD rates offered by various banks in Malaysia and transfer or deposit your funds into the FD scheme with the highest interest rate. Remember, the higher the deposit amount, the higher the interest earnings. It is advisable not to withdraw your funds before the maturity of your FD or you stand to lose out on your interest earnings.

    • Is FD a safe investment avenue?

      Fixed deposits are not associated with market risks like mutual funds. You will get guaranteed return on investment with an FD account. If you have opened an FD account with a member bank, you can rest easy as it is protected by the PIDM for up to RM2,50,000 per depositor per bank.

    • How to open an FD account?

      Visit the nearest bank branch and deposit your money via cash or cheque. The bank will issue an FD certificate with details such as the interest rate, term, maturity date, and the principal amount deposited. You will have to furnish the certificate if you want to withdraw funds, terminate or renew your FD scheme.

    • What are Islamic fixed deposit accounts?

      Some banks in Malaysia offer Islamic FD schemes which follow the Sharia principle of banking where no interest can be paid or accepted in return for money deposited. As per the Sharia concept known as Murabahah, the bank will invest your money in Sharia-compliant investment avenues and the profit earned will be shared between you and the bank in a predetermined profit sharing ratio.

    • How to open a joint FD account?

      You can open a joint FD account with a family member or a spouse by providing your respective MyKad for identity proof.

    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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