A Fixed Deposit (FD), also known as a Term Deposit in Malaysia, is a type of investment product offered by licensed banks and approved financial institutions. It involves depositing a specific sum of money for a fixed period ranging from one month to several years, at a predetermined interest rate. The interest rate remains constant throughout the deposit tenure, regardless of market fluctuations, providing a secure and predictable return.
The primary feature of a fixed deposit is its locked-in period. During this time, the deposited amount cannot be withdrawn without incurring a penalty, which reinforces financial discipline and helps banks manage their liquidity more effectively. Compared to regular savings accounts, FDs offer higher interest rates, suitable for individuals seeking low-risk investment options with guaranteed returns. Deposits placed with member banks are protected by the Perbadanan Insurans Deposit Malaysia (PIDM) up to a certain limit, offering added peace of mind.
Fixed Deposit / Term Deposit
How Do Fixed Deposits Work?
When you place a Fixed Deposit (FD) in Malaysia, you agree to deposit a specific amount of money with a bank or licensed financial institution for a fixed tenure, commonly ranging from 1 month to 60 months. In return, the bank offers a guaranteed fixed interest rate that remains unchanged throughout the term of the deposit. Longer tenures and larger deposit amounts attract higher interest rates.
The interest is calculated daily based on the principal amount but is paid out according to the selected payment schedule. This could be monthly, quarterly, semi-annually, annually or at maturity, depending on the bank’s terms and the customer’s preference. Withdrawing the funds before the maturity date usually results in either a reduced interest payout or no interest at all, and in some cases, an early withdrawal penalty. This structure ensures stability for both the depositor and the bank.
What Are The Benefits Of Fixed Deposits?
Fixed Deposits offer 7 key 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 collateral for a loan. The list of key benefits of Fixed Deposits include:
- Guaranteed returns with a fixed interest rate throughout the tenure
- Higher interest rates than conventional savings accounts
- PIDM protection up to RM250,000 per depositor per bank
- Low investment risk, ideal for capital preservation
- Eligibility as loan collateral for added financial flexibility
- Predictable earnings that support effective financial planning
- Flexible tenures ranging from 1 to 60 months, allowing goal-based savings
What Are The Current Market Rates of Fixed Deposit?
Most Malaysian banks currently offer Fixed Deposit (FD) interest rates ranging between 1.90% and 2.30% per annum for standard placements, depending on the tenure and deposit amount. These base rates reflect the influence of Bank Negara Malaysia’s Overnight Policy Rate (OPR) and are generally consistent across major institutions.
However, banks often introduce promotional rates, especially for e-FD (online placements), new funds, or specific campaigns, offering significantly better returns—ranging from 3.30% to 3.90% per annum. Some banks also provide preferential rates for senior citizens or for high-value deposits, with top-tier offerings reaching as high as 4.70% to 5.00% for short tenures above RM1 million.
Below is a summary of current FD interest rates from selected Malaysian banks (as of July 2025):
| Bank | Tenure | Standard Rate (p.a.) | Promotional Rate (p.a.) |
|---|---|---|---|
| Maybank | 1–12 months | 1.95% – 2.25% | Not listed |
| Hong Leong Bank | 1–12 months | 1.90% – 2.10% | 3.35% (3-mth), 3.45% (6-mth) e-FD |
| RHB Bank | 1–12 months | 1.85% – 2.15% | 4.70% – 5.00% (3-mth, RM1 million & above) |
| CIMB | 1–12 months | ~2.10% | Up to 3.45% (7-mth e-FD-i for new funds) |
| Alliance Bank | 6 months | ~2.30% | 3.90% (e-FD campaign) |
| HSBC | 1–60 months | 2.05% – 2.25% | Not listed |
These promotional rates usually come with terms such as minimum deposit amounts, online-only access, or fresh fund placement. It’s recommended to check each bank’s official site or visit a branch for the most up-to-date and applicable offers before investing.
Fixed Deposit Rates in Malaysia
Here is the updated table showing the latest Fixed Deposit (FD) interest rates in Malaysia as of July 2025, including minimum deposit, tenure, early withdrawal status, PIDM protection, and remarks for each product:
| Bank Name | Product Name | Min Deposit | Tenure | Interest Rate (% p.a.) | Early Withdrawal | PIDM Protected | Remarks |
|---|---|---|---|---|---|---|---|
| Maybank | Fixed Deposit Account | RM1,000 | 1 – 60 mo | 1.95 – 2.30 | Yes | Yes | Standard FD |
| CIMB | eFD-i | RM5,000 | 4 – 7 mo | 3.65 – 3.70 | No | Yes | eFD promo, fresh funds only |
| Public Bank | eFixed Deposit | RM5,000 | 3 – 12 mo | 3.50 – 3.70 | No | Yes | eFD promo, limited period |
| RHB Premier | Premier FD | RM1,000,000 | 3 mo | 4.70 – 5.00 | No | Yes | High tier promo for RM1M+ |
| Hong Leong | eFD Promo | RM10,000 | 3 – 6 mo | 3.35 – 3.45 | No | Yes | July promo campaign |
| Alliance Bank | eFD Campaign | RM10,000 | 6 mo | 3.90 | No | Yes | Campaign until Sept |
| Agrobank | Fixed Return Investment Acc-i | RM1,000 | 6 mo | 3.30 | No | No | GLC, Islamic FD-i |
| Bank of China | Fixed Deposit Account | RM1,000 | 1 – 12 mo | 2.55 – 3.05 | No | Yes | Higher rates for longer tenure |
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.
Is Fixed Deposit Interest Taxable in Malaysia?
No, for individual taxpayers, the interest earned from fixed deposits placed with licensed banks or financial institutions in Malaysia is not taxable. This tax exemption means that individuals do not need to declare fixed deposit interest in their income tax filings. However, this exemption does not apply to companies or business entities. Any fixed deposit interest earned by companies or business entities is considered taxable income and must be reported under corporate tax obligations.
For non-resident individuals, such interest may be subject to withholding tax at a rate of 15%, unless a reduced rate is available under a double tax treaty. While Malaysian residents enjoy tax-free fixed deposit interest as individuals, taxation may still apply depending on the taxpayer category and residency status