QUOTE(Gen-X @ Oct 25 2011, 09:16 PM)
Noted. But to me this up front FD doesn't really make any difference. Say for 3.3% 12 months. I deposit RM100, bank give me RM3.30, so actual fact I depositing RM96.70 and end of 12 months I get back RM100.
No. It doesn't work like that actually. I'll use a bigger amount as example > RM100,000.
I deposit RM100,000 with HSBC Amanah under their upfront payment scheme TD-i for 12-month. The 12-month profit for
upfront payment TD-i is just 3.20% versus
3.30% for the standard scheme TD-i. So, the profit for my deposit is 3.20%. Let say i open the account now under this
upfront payment TD-i with RM100,000, they will pay me RM3,200 right away and the TD-i deposit slip will still be written as RM100,000. Yes, you can use the RM3,200 right away and you will get all your RM100,000 back by the end of the 12th month. Just that unlike conventional FD product where at the end of the month, i will get my principal back + the interest earned during the last 12-month. For this HSBC Amanah
upfront payment TD-i, i will only get my whole principal amount back
(which in my case is RM100,000) at the end of the 12th month. There is no more interest for me because HSBC Amanah already paid me the interest
(RM3,200) 12-month ago when i opened this
upfront payment TD-i.
This post has been edited by MilesAndMore: Oct 25 2011, 10:19 PM