Lol if you want high FD rates try Indonesian FD, I open a FD account there in 2001-2004 with an average rate of 16% p.a. . Sadly now no more, only can get about 6%....

This post has been edited by gark: Jan 12 2010, 07:17 PM

A lot of companies put a lot of money in FD, because the cash reserve is not for generating interest income but to drive the primary business, where the majority of revenue is derived. The company that i work for puts tens of million of their excess cash in a laddered FD to ensure liquidity to do business whenever there is an opportunity. So to say that FD is useless, you are underestimating the function and use of FD.

This post has been edited by gark: Jan 14 2010, 12:39 AM

The current investment industry have brainwashed us that holding cash and FD is very bad for you. The have mentioned over and over again and drilled in our brains that cash/FD is a deteriorating asset, which is slowly eaten up by inflation. They tell you that sitting on a load of cash or FD means that you do not know what you are doing, so they suggest to invest and invest no matter what is the state of the investments. They make it looks very easy to make lots of money by continuously investing in the long term.

If you are a patient long term investor, the holding in cash/FD is inversely proportional to the available to cheap investments. When good investment are not available, sitting on cash and FD is the best investment decision that you can make. Cash is usually most needed when you do not have them.

Having a load of cash/FD enables you to make opportunistic investment whenever you can find them. Cash/FD allows the investor to avoid selling a cheap investment to buy another cheap investment and also to take advantage of any special circumstances in which extremely good investments are available during a time of maximum pessimism.

So don't be suckered into thinking cash and FD is always bad for you, it is one of the most important investment strategy that you can employ. I myself use this strategy extensively.

Bad! bad! I was actually hedging for the interest rate to rise.

Depends what you do with it. I have my emergency fund for 1 month automatic renewal for like many years already. This is to ensure that I can have access to the cash when ever I want. I don't think too much about the interest rate, up or down does not matter to me.

Hope BNM raise more interest rate soon, to get rid of all the riff raff in the property market. Anyway I don't think FD's interest is hard to beat at all, almost all investment trumps it.

This post has been edited by gark: Mar 29 2010, 08:52 PM

If we just rely on FD's interest rate to be the majority of our investment, we will lose the same amount to inflation. I am aiming a minimum of at least 5%-7% per year just to break even with no gains after inflation. Investment is less about skill and more about reading, quantifying and make summary judgement, and more reading.

This post has been edited by gark: Mar 30 2010, 12:19 PM

Aiya... interest rate also want to argue? IMHO, FD is only a good place to park your (3-6 months) emergency fund, or as a very short term deposit while you wait better investment opportunities. Then maybe for others who want to invest in an ultra safe investment, with low yield and if it helps you to sleep at night, why not?

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Added on June 14, 2010, 12:34 amEven if the OPR is going to go up, it will probably be 25 basis or the most it will be 50 basis point. BNM usually do not go more than that. 25 or 50 basis point is nothing and will not change much in the short term. So don't worry about these small changes.

This post has been edited by gark: Jun 14 2010, 12:34 AM

There is no right or wrong investment, so don't let anyone tell you otherwise. The type of investment suitable for one person depends on the risk tolerance, investment period, cash flow and also their future target. So know these points before you invest. eg for example, I have very high risk tolerance, even if i lose 50% of my asset, I don't really care because I will only need the money in 25-30 years time and so far I have met my target benchmarks.

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Added on June 14, 2010, 11:01 amNever rush into investment and don't be influenced by friends, I follow these investment rules:

1. Know what you are investing.
2. Know your risk tolerance.
3. Check your cash flow.
4. Know your target amount and time.

Have fun!

This post has been edited by gark: Jun 14 2010, 11:02 AM

If you are bumi, you buy all the ASB as you can get your grubby hands on, it is one of the best risk adjusted investment out there.

This post has been edited by gark: Jun 14 2010, 02:19 PM

Government having cash flow problems or having a deficit does not mean anything to ASB as they only have < 10% invested in government bonds. As long as the government does not default the bonds will still continue to pay interest. You SHOULD be more worried of your EPF as 60%-70% are invested in long term government bonds, if the government defaults on it's bonds, you will be left with nothing.

Thats why financial education is important, as you will see your investments clearer.

This post has been edited by gark: Jun 14 2010, 02:26 PM

Even if PNB went bankrupt.... the ASB shares are held in trust right? It should be safe from creditors.

If they really want more depositors, they should lower the spread between OPR and FD rates. Anyone noticed the spread is getting wider and wider. Greedy banks!

If you put 10k FD with 2.75% interest p.a., the following calculation applies :

On 2nd Month, RM 10,000 + (10,000 x 0.0275/12) = 10,022.92.
You will only gain RM 22.92 for 1 month, remember the rate is per year, so you have to divide over how many month you are depositing.

If the interest rate is the same, it is better to put at the lowest month available with auto renewal, that way you can a little bit more as your interest will get interest as well.

This post has been edited by gark: Nov 20 2010, 04:29 PM

You are correct, that is why if the rates are the same, choose the one with the lower month, so your interest will compound.

Auto renewal will always based on the new & current rate. If CIMB revises to 2.75%, your next renewal will be 2.75%, but your current term will still be 3% until maturity.

eFD have cert lah. If you bank with CIMB, they give you a printable cert similar to the one if you apply over the counter.

I get consolidated account statement from CIMB every month showing all my FD in a nice little list. Still, statement have to print yourself.

This post has been edited by gark: Dec 8 2010, 11:48 PM

1. yes
2. no - unless you withdraw before your term is up
3. yes - during the term, will change during renewal, if the rate changed
4. yes - current offer by CIMB for 3,10 and 15 months

1. You take short term if the money you might want to use. If not then take long term. All my FD is 1-3 months only. As these are short term funds for me, if I find better opportunity.

2. Interest is accumulated until the FD term ends, so your funds are not compounded.

3. Unit trust is other type of investment, unless you are already planning to buy unit trust (and know what to buy) don't join this plan for the sake of higher FD as you are paying about 5.5%-6.5% fees for the unit trust.

4. As above FD plan with unit trust have fees. Look before you jump. Don't take if you just want FD without the UT.

5. Unit trust look for long term report (>5 years) performance vs. benchmark and peers. Use morningstar or standard and poors rating. You can find them online or just go buy a personal money magazine (RM 9). Read the annual report and the factsheets. Don't be attracted to short term gains. Remember all UT have HIGH fees (initial & yearly) and you MAY lose money (economic downturn).

That being said, I have have a substantial amount in UT, but carefully picked. If something is given on offer, usually it is because no one wants em.

This post has been edited by gark: Feb 14 2011, 06:56 PM