A Fixed Deposit (FD) in Malaysia, also known as a Term Deposit, is a financial product offered by banks in which you deposit a specific amount of money for a predetermined period at a fixed interest rate. This investment vehicle provides higher interest rates compared to regular savings accounts.
The key feature of FD is its locked-in period, which helps banks manage their cash reserves while providing customers with better returns on their savings compared to conventional savings accounts.
Fixed Deposit / Term Deposit
How Do Fixed Deposits Work?
When you place a Fixed Deposit, you agree to lock your money for a specific tenure ranging from 1 month to 60 months. The bank guarantees a fixed interest rate (return rate) throughout this period, typically increasing for longer tenure periods and larger deposit amounts.
Interest calculations are usually done daily, though payment terms may vary between monthly, quarterly, or at maturity depending on the bank’s policy and the chosen tenure.
What Are The Benefits Of Fixed Deposits?
Fixed Deposits offer several advantages, including guaranteed returns, higher interest rates than savings accounts, and protection under PIDM (Perbadanan Insurans Deposit Malaysia) up to RM250,000. They represent a low-risk investment option and can be used as loan collateral.
The structured nature of FDs also helps in financial planning, as you can predict exactly how much interest you’ll earn at maturity. This makes them ideal for those seeking stable returns without market risks.
What Are The Current Market Rates?
Most Malaysian banks offer competitive FD rates ranging from 2.5% to 4.0% per annum, depending on the tenure and promotional periods. These rates fluctuate based on economic conditions and Bank Negara Malaysia’s (Central Bank) policies.
Special promotional rates are often available, particularly for new funds or during specific campaigns. Some banks offer preferential rates for senior citizens or online fixed deposits (e-FD).
Fixed Deposit Rates in Malaysia
Fixed deposits (FDs) offer guaranteed returns over specified tenures. Below is a table summarizing the latest fixed deposit interest rates offered by various banks in Malaysia as of November 14, 2024. Please note that rates are subject to change, and it’s advisable to consult the respective banks for the most current information.
| Bank Name | Product Name | Minimum Deposit | Tenure (Months) | Interest Rate (% p.a.) | Early Withdrawal | PIDM Protection |
|---|---|---|---|---|---|---|
| Maybank | Fixed Deposit Account | RM1,000 | 1 – 60 | 2.50% | Yes | Yes |
| CIMB | Fixed Deposit | RM1,000 | 1 – 60 | 2.50% | Yes | Yes |
| Public Bank | eFixed Deposit | RM1,000 | 1 – 60 | 2.50% | Yes | Yes |
| RHB Bank | Ordinary Fixed Deposit | RM500 | 1 – 60 | 2.50% | Yes | Yes |
| Hong Leong Bank | Fixed Deposit | RM500 | 1 – 60 | 2.35% | Yes | Yes |
| Affin Bank | Fixed Deposit | RM500 | 1 – 60 | 2.35% | Yes | Yes |
| Bank of China | Fixed Deposit Account | RM1,000 | 1 – 60 | 3.05% | No | Yes |
| Agrobank | Fixed Return Investment Account-i | RM1,000 | 1 – 60 | 3.45% | No | No |
| India International Bank | Fixed Deposit | RM1,000 | 1 – 60 | 3.10% | No | Yes |
| Al Rajhi Bank | Term Deposit-i | RM500 | 1 – 60 | 2.95% | No | Yes |
| Bank Rakyat | Term Deposit Account-i | RM500 | 1 – 60 | 2.80% | No | No |
| Bank Simpanan Nasional | Term Deposit | RM500 | 1 – 60 | 3.35% | No | Yes |
| HSBC | Time Deposit | RM1,000 | 1 – 60 | 2.70% | Yes | Yes |
| Standard Chartered | Fixed Deposit | RM1,000 | 1 – 60 | 2.70% | No | Yes |
| OCBC | MYR Fixed Deposit | RM10,000 | 1 – 60 | 2.60% | Yes | Yes |
| AmBank | Conventional Fixed Deposit | RM500 | 1 – 60 | 2.50% | No | Yes |
| Alliance Bank | Fixed Deposit | RM500 | 1 – 60 | 2.80% | No | Yes |
| MBSB Bank | Term Deposit-i | RM500 | 1 – 60 | 2.60% | No | No |
| UOB | Fixed Deposit | RM500 | 1 – 60 | 2.70% | No | Yes |
*Note: PIDM (Perbadanan Insurans Deposit Malaysia) provides deposit insurance protection up to RM250,000 per depositor per bank.
For the most accurate and up-to-date information, please refer to the official websites of the respective banks or contact their customer service representatives.
What Are The Minimum Requirements for Opening a Fixed Deposit Account?
The typical minimum deposit requirement for opening a Fixed Deposit account ranges from RM1,000 to RM5,000, depending on the bank. Some banks may offer lower minimums for online fixed deposits to encourage digital banking adoption.
Documentation requirements typically include identification documents (MyKad), proof of address, and initial deposit funds. Most banks require a savings account to facilitate the FD opening.
What Happens If I Need Early Withdrawal of My Fixed Deposit?
Early withdrawal of Fixed Deposits usually results in partial or complete loss of interest earnings, depending on the bank’s policy and how long the deposit has been held. Some banks may impose additional penalties for premature withdrawals.
Understanding your bank’s specific terms regarding early withdrawal before placing an FD is crucial, as policies can vary significantly between different financial institutions.
How Does Fixed Deposit Compare To Other Investment Options?
Fixed Deposits are considered one of the safest investment options in Malaysia. They offer better returns than savings accounts but lower potential returns compared to riskier investments like stocks or unit trusts (mutual funds).
While FDs provide guaranteed returns, the trade-off is that these returns might not beat inflation rates in the long term. They’re best suited for short to medium-term financial goals where capital preservation is the priority.
How Is The Fixed Deposit Interest Taxed?
Interest earned from Fixed Deposits in Malaysia is subject to taxation and should be declared in your annual income tax return. However, the tax implications may vary based on your income and tax bracket.
Malaysian tax regulations require banks to report interest earned to the Inland Revenue Board (Lembaga Hasil Dalam Negeri). However, some exemptions may apply depending on the depositor’s status and the amount of interest earned.
