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Fixed Deposits (FD) and Fixed Deposit-i are widely trusted investment options in Malaysia, offering a secure way for people to grow their savings.
These choices have become popular because they are safe, reliable, and provide consistent earnings.
Let’s look at these options and understand their differences, along with the current FD rates in November 2023.
What is Fixed Deposits (FD)?
Fixed deposits, commonly known as FDs, are traditional savings accounts offered by banks and financial institutions. They function on a straightforward principle: you deposit a specific sum of money for a predetermined period, ranging from a few months to several years.
During this tenure, the deposited amount accrues interest at a fixed rate, which is typically higher than in regular savings accounts. The interest rate remains constant throughout the agreed-upon period, providing investors with stability and predictability in their earnings.
Key Features of FD:
- Fixed Interest Rates: A stable, fixed interest rate offers a guaranteed return.
- Tenure Options: Investors can choose from short-term, medium-term, or long-term FD to match their financial goals and investment horizon.
- Maturity Payout: At the end of the term, investors receive their initial deposit along with accrued interest, providing a lump sum for reinvestment or personal use.
- Penalties for Premature Withdrawal: FDs have penalties for early withdrawal. Consider your liquidity needs before committing to a fixed deposit.
What is Fixed Deposit-i (FD-i)?
Fixed Deposit-i, often referred to as Islamic Fixed Deposits, follows the principles of Islamic finance. These deposits are Shariah-compliant, adhering to Islamic laws that prohibit earning interest (Riba).
Instead of earning interest, investors in Fixed Deposit-i accounts enter into a Mudarabah or Wakalah contract with the bank. Under Mudarabah, the bank pools funds from investors and engages in Shariah-compliant activities.
Profits generated from these activities are shared between the bank and the investors based on agreed-upon ratios.
Key Features of FD-i:
- Profit-sharing Model: Investors share profits from the bank’s Shariah-compliant ventures, following Islamic principles for ethical and Halal investments.
- Shariah Compliance: FD-i products are certified by Shariah boards and scholars, ensuring alignment with Islamic finance principles and offering peace of mind to ethical investors.
- Flexible Tenures: FD-i offers a variety of tenure options, letting investors choose the duration that fits their financial goals and ensuring flexibility in their investment decisions.
- Principle Preservation: Just like traditional FDs, the principal amount in Fixed Deposit-i is preserved, offering capital protection to investors.
Key Differences between FD and FD-i: Making Informed Investment Choices
Investing your money wisely begins with understanding the differences between FD and FD-i. These distinctions are crucial in helping you choose the right investment option that aligns with your financial goals and preferences.
| FD | FD-i | |
| Interest vs. profit-sharing | Earn a fixed interest rate on your deposit | Using a profit-sharing model |
| Shariah Compliance | Operate on interest, which might not align with Shariah principles | Its Shariah-compliant |
| Flexibility in Tenures | a variety of tenures, accommodating both short-term and long-term investment preferences | provides diverse tenure options, allowing you to align your investment with your specific goals and needs. |
| Investment Profit Allocation | Earnings are based on fixed interest rates | Operates on profit-sharing; returns fluctuate based on profits from Shariah-compliant activities. |
Highlighting their competitive FD rates for December 2023:
1. Alliance Bank:
Offer: Alliance Bank is running the “Alliance Privilege (PB) Welcome Fixed Deposit/Alliance Term Deposit-i Campaign 2023.”
Interest Rate: 4.10% per annum for a 6-month term.
Minimum deposit: RM1,000.
Promotion period: 2023 October 10 to 1 March 2024
Preferential Terms: Applicable to new funds only. Requires opening an Alliance Privilege bank account.
2. CIMB Bank:
Offer: CIMB Bank presents the “CIMB Fixed Deposit (FD/FD-i) Boost Your Wealth Campaign.”
Interest Rates: 3.53% per annum for 3 months, 3.75% per annum for 12 months, 3.65% per annum for 2 months, and 3.80% per annum for 7 months.
Minimum Deposit: RM1,000
Promotion Period: 2023 November 11 – 23 January 2024
Preferential Terms: It requires opening a CIMB eFixed Return Income Account-i (eFRIA-i) account with a minimum deposit of RM1,000 in new funds. Available through FPX transfer.
3. OCBC Bank:
Offer: OCBC Bank’s “AlwaysOn Time Deposit Offer.”
Interest Rates: 3.75% per annum for 6 months and 3.80% per annum for 9 months.
Minimum Deposit: RM1,000.
Promotion Period: 11 November 2023 – 15 December 2023
Preferential Terms: Only applicable for new funds. Can be processed at nearby branches or through FPX transfer.
4. Hong Leong Bank:
Offer: Hong Leong Bank’s “HLB Connect eFD/eFD-i 12-month fixed deposit offer.”
Interest Rates: 3.55% per annum for 3 months, 3.75% per annum for 6 months, and 3.75% per annum for 12 months.
Minimum deposit: RM1,000.
Preferential Terms: Requires transferring new funds from other banks through HLB Connect online banking via FPX fund transfer.
5. Public Bank:
Offer: Public Bank provides “eFD via FPX.”
Interest Rates: 3.60% per annum for 3 months, 3.70% per annum for 6 months, 3.80% per annum for 9 months, and 3.85% per annum for 12 months.
Minimum Deposit: RM5,000
Promotion Period: 1 October 2023 – 31 December 2023
Preferential Terms: Exclusively for online time deposit discounts, facilitated through Public Bank Online Banking (PBe Online Banking) using FPX fund transfers with new funds.
RHB Bank
Time Deposit Rate: 3.85% (minimum deposit of RM5,000); 3.95% (minimum deposit of RM10,000)
Lock-up period: 6 months
Offer period: 2023 December to 12 December 1
Offer Details & Conditions: The 3.95% discount is only open to RHB Premier users; Other offers are open to all RHB users.
Finding the best FD rates in Malaysia involves careful consideration. As a potential investor, focus on the duration, minimum deposit, and any special terms each bank offers. By understanding these details, you can make a smart investment choice tailored to your needs. Stay informed, compare options, and choose wisely to maximize your earnings!
Looking for smart investment options? Interested in growing your wealth? Sign up now and invest wisely!
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