so thats mean 1 year in FD is even better in interest than 2-5 years?theorically speaking arent it supposed to be the longer the period you FD the better the rate?

sorry to ask this noob questions but i want to know so i wont regret wasting my time choosing the wrong period.

Basically yes, it's not worthwhile to have your money "Frozen" for few years where the increment in interest rate for anything more than 1 year is just alittle higher

Can open more than one FD at a time?in the same bank?

Yes. In fact, you should open multiple FD within reasons. The reason is if something happen and you need the money, you just need to cash out just enough FD to get by.

For example, if you have 10K, you can do 1 X 10K FD or 2 X 5K FD. If you do 2 X 5K FD and you need the money before maturity, you just need to cash out 1 X 5K FD and suffer only penalty for 1 5K FD.

Some people believe in laddering too. Especially, if you believe interest rate is going up. In laddering, you do one FD every month or every X months, 1 year maturity and auto-renewal. So, if you need money, there is always a FD close by to cash out. Plus, your FD will catch the rising interest rate.

Dreamer

so give this example,
I put in rm10k for 6 month FD at the interest rate of 3.5%,
after 6th month i will get 10k plus my 10k-98.25%=175 which is rm10175??

and
if I put 10k for 1 month FD at the interest rate of 3.1%,after 6 month i will get 10k plus my 10k-99.74%=26 which is rm10026??

correct me if i am wrong...
but thats sooo little...

This post has been edited by ah_suknat: Aug 12 2006, 06:58 AM

AFAIK, the correct calculation is,

10000 x 0.031 (3.1%) = 310
310 / 2 = 155

So your interest after 6 month is 10000 + 155 = 10155

Your 6 month FD's answer is correct. But, your formula is wrong!!!

The interest should be 0.035 ( 3.5% ) * 6/12 = 0.0175

10K * 0.0175 = 175

You 1 month FD calculation is wrong due to compounding interest. You get interest on top of your interest after every month.

The interest should be ( 1 + 0.031 * 1/12) ^ 6 - 1= 0.0156

10K * 0.0156 = 156

As it should be. You should get pay more interest for having a longer term contract.

By the way, you should be doing one year FD. It has the best rate at 3.88%. You just buy 1 year FD every months. The minimum is 1k.


Dreamer

This post has been edited by dreamer101: Aug 12 2006, 08:15 AM

sorry i dont get it...my math sux since secondary school.

so if i take 6 months FD,i will get rm10176 in total?

so if i take 1 month FD continuously for 6 months with the same amount of money invested in.
will it be rm156x6 months=rm936,
in the end of the 6 months period i will get rm10936??

or the 6th month FD should times 6 also?which is 176x6 month=1056,so in the end i get 11056?or should compound interest apply here?

correct me please...

1) 6 months FD. After 6 months, you get $10,000 + $175 = $10,175

2) 1 Month FD. After 6 months, you get $10,000 + $156 = $10,156

We teach this in standard 6 of Chinese primary school.

Dreamer

what did you mean by 1 month FD after 6 months?dont you FD 1 month then can take out after 1 month meh?need to wait for 6 months?
than whats the different between 1 month and 6 months than?

you mean you teach or you learn? i never learn that until junior 2-3 i think?its a chinese private secondary school too. even though i learn this in college too,but still dont get it.my math very very sux.

This post has been edited by ah_suknat: Aug 12 2006, 09:50 AM

wat r u doin...

1month FD... after 6 month the n go get d money???

i think d calculation is that, 12month-> full interest is 3.1% so each month is 3.1/12=0.2583%

if put 1 month, so money u get is 0.2583% x 10000=25.83.

correct me if im wrong... i also learnin

FD 1month better or FD 6 month better?

Actually from my point of view, it depends to your portfolio

For an investor, usually they will keep the money in FD 1 month for emergency cases. Such as, suddenly jobless, sick and bla bla bla

For example if ur monthly expenses is just 1k, so u need to save 3k in you FD1 month in case u r jobless. Then u need to save another 1k in case u fall sick. Another 2 or 3k for ur flight since u r now in london. So total should be 6 or 7k.

The extra money, i think u can put in FD 12 months ( better since u already got emergency "fund" => 1 month FD ) or invest in unit trust. which fund is better actually u can judge urself by looking the 5 substantial companies that the fund manager invest in.

If u feel that 5 substantial companies have a bright future, then u can just invest in it.


This portfolio is just an example

Monthly expenses: 50%
Emergency cases: 10%
Investment and saving: 40%

U can create a portfolio somethings like that which suitable to your condition.

Just my point of view.

Hm...

I called Maybank up and asked about the FD calculation before.

Dreamer's calculation is not wrong but missed some details

Let's take these examples in my next calculation.

Principal - RM10,000
Interest - 3.1% For 1 Month
Duration - August 2006 (31 days)

Upon maturity the calculation should be: -

Rm10,000 * (3.1/100) * (31/365) = RM 26.32 <- Interest earned.

Notice that on the duration part, I used the number of days for calculation instead on month. This part of equation will fluctuate if the days of the month is < 31 days especially February.

sorry I cant help to say this but...
you were studying in the most elite secondary school in sbh!!!

i dont think so...the return is too small.

LOL.. Then how much are you expecting in return for a month from FD?

sorry wahai wahai expert semua...

the current issue now is to teach us the calculation of FD...and not teach us what to do with our money...

thanks for your help...

edit: yeah,i kinda embarrass my secondary school.

then can you suggest the correct calculation for 1 month with 3.1%interest rate and 12 month with 3.7% interest rate FD?with 10k investment?
for us?

hhm.... if like that, i think satu kali FD alot will b better.... see this

6month FD
satu kali rm60000 -> 60000 x 3.5/100x0.5 = 1050

each month FD 10000 for 6 month
10000x 3.1/100 x 31/365( or use 1/12)=26.33
so, after 6 month = 158 onli!!!

diffrent ab 892!!!

http://www1.uob.com.my/cgi-bin/calculator/term_deposit.cgi

this link is useful

lowyat82 is correct

dunno how 2 calculate but can earn few k a month( what job is that, just wonder no offense )

This post has been edited by hotlink: Aug 12 2006, 10:36 AM


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