You should opt to place your FD tenure to 1 year. It will automatically renew every year. The rate for 1 year & above is the same...

Just make sure your FD is withdrawn after 7 years else it will go to "Unclaimed Money". Once it's placed there, you money won't earn any interest.

Oh ya, since you're placing 300k, do ask the bank to give you special rate... Most likely they will grant slightly higher rates for you

This post has been edited by Thrust: Nov 18 2010, 09:46 PM

Hhmm.. why don't you do it like this:-

You split your placement to 100k each. First 100k, opt for 3 month placement, then 2nd 6 month & 3rd 1 year. Although the interest will be slightly lower, you can get the flexibility of withdrawing your FD in case you need it urgently.

The FD interest rate is maxed out at 1 year. More than that is the same. Some banks does offer higher rate if you placed like 24 or 36 months with them but who knows when you might need the cash. So placing tenure of more than 1 year is a "NO-NO" to me. Don't be tempted by the slight increase in rates.

It's best you ask your relative which bank she placed in & check with the bank whether is there such an offer. Based on my experience of working in a bank, there's no FD placement that's giving out 6-7% interest unless it is a package tied to some other promotions where you need to invest in UT or some other funds.

If you withdraw your FD before the "tarikh matang", you won't lose all your interest. You will lose maybe 2/3 of it. That is why it is not advisable to withdraw the FD before it hits the maturity date. FD rates is already low & deduct the penalty of early withdrawal, you're getting a very2 low return.