If you are interested in investing in Fixed Deposit, also known as FD then there will be a lot of questions. This is nothing to be ashamed about. You have to ask them. It is the only way you can learn. These are the most important questions (read: IMPORTANT), that you will be asked about fixed deposits.

Can you make money with fixed deposits?

Fixed deposits differ from unit trusts and stocks. Because the interest rate is usually low, between 3% and 4% per annum, returns are not that high. It can also be higher. Fixed deposits are a good option if you want to be less risky.

You don’t have to be involved in these investments. You just need to wait for your deposit to mature. You can deposit RM6,000 and earn 3.7% p.a. RM111 will be earned, which is still profitable.

2. What is better a fixed deposit than a savings account or a fixed deposit?

Both YES AND NO are the answers. Because the deposit offers better interest rates than a savings account, FYI, the average savings account interest rate is 1.2 p.a. Based on a comparison between 30+ savings accounts from all the major banks in Malaysia, June 2019, If you have RM6,000 in savings, your annual earnings will be RM72. However, if you had RM6,000 in your savings account, you could have earned RM222 per annum (see the example below).

Because you cannot access it as easily you could your savings account, You should not put money in fixed deposits if you have an emergency fund. Fixed deposits are less liquid that money in regular savings accounts, or money invested in bonds. In other words, your fixed deposit won’t mature before you need it. This can lead to a loss of returns.

3. 3. Is it accessible to foreigners?

Yes. Yes. There are many fixed deposits available in Malaysia for permanent residents and citizens of Malaysia. . CIMB offers fixed deposit accounts as an example.

Foreign applicants may also be eligible for Foreign Currency Fixed Deposits. These deposits can be held for up to 12 month. These deposits can be used to hedge against inflation, and you can keep the currency in your account until the exchange rate is better.

3. Is it accessible to foreigners?

Yes. Yes. There are many fixed deposits available in Malaysia for permanent residents and citizens of Malaysia. . CIMB offers fixed deposit accounts as an example.

Foreign applicants may also be eligible for Foreign Currency Fixed Deposits. These deposits can be held for up to 12 month. These deposits can be used to hedge against inflation, and you can keep the currency in your account until the exchange rate is better.

4. It is suitable for retirement.

Fixed deposit is a great investment option. Fixed deposit is a great investment option because it offers security and a guaranteed return. However, relying on them alone for retirement isn’t a good idea as the returns are not as high as other retirement plans.

There are many retirement plans on the market. For better guidance, it is a good idea to consult a financial advisor or investment advisor. Many insurance companies offer retirement plans to help you build a retirement nest egg.

5. What are the benefits of a fixed deposit?

YES. It is one of the most secure forms of investment. Diversifying your portfolio can help you do this. And Any negative impact that low-performing assets may have on your bottom line is mitigated .

Fixed deposits not only stabilize your investments but they also help to protect them. Also acts as a credit instrument . When you deposit your collateral amount, many banks offer personal lines of credit and overdraft options.

6. How much money will I have to deposit?

Fixed deposit requires a minimum deposit amount, but this usually depends on the tenure you choose. Tenures of 1 month have a higher requirement, though tenures above 2 months are more affordable.

For example, the Maybank Fixed Deposit Account has a minimum deposit requirement of RM5,000 when you choose a tenure of 1 month. For tenures of 2 months or more, your minimum deposit amount drops down to RM1,000.

Apart from what you can afford, you should also look into what you can set aside. There’s no point dumping all your cash in a fixed deposit account and leaving yourself vulnerable to unforeseen expenses. You need to have a certain level of liquidity to meet your daily requirements.

7. How safe are fixed deposits?

Very. Most people know that your deposits are protected by PIDM up to RM250,000 in the event of a bank failure. What’s more, you can get RM250,000 coverage per account and per bank you deposit into.

You can receive RM250,000 insurance coverage even if you deposit with the same bank. This is if you have one of these types of accounts: trust accounts, joint-name accounts and trust accounts. PIDM insures both Malaysians as well as non-Malaysians.

8. What happens when a fixed deposit matures?

Depending on which fixed deposit account you choose, the deposit and interest may be credited to your account or it could be automatically renewed . Automatic renewals are offered by Maybank and CIMB, for instance.
You have the option to withdraw the earned interest and renew your deposit automatically.

Keep in mind that automatic renewals might not have the same interest rates. Before you decide to renew, make sure to compare all fixed deposit accounts to find the best rate.

9. What happens when I need to withdraw it?

With life being as unpredictable as is, there’ll be times when you need to withdraw your fixed deposits to meet some other unforeseen expense. Some deposits allow you to make premature withdrawals. Fixed deposits offered by Maybank and Alliance Bank allow you to make partial withdrawals. Depending on how early in the tenure you make the withdrawal, you can either get some interest or no interest at all.

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