Generally for FD

1. Minimum deposit for 1 month tenure RM5K and 2 months and above RM500.

2. If you have money in Savings Account and you not utilizing it, better you deposit into FD where you earn higher interest rate.

For example you have RM5K in you savings account and the interest rate is 0.5% per annum. Therefore you only earn approximately RM25 per year (why I say approximately is because generally for Savings Account the interest earned is credited monthly into the Savings Account).

If you deposit this same amount of RM5K into Fixed Deposit for 12 month tenure at 3.15%, you will earn RM157.50 upon maturity (i.e. after 1 year). That's RM132.50more than the Savings Account.

Or say, you need to use the RM5K in 3 months time, instead of leaving the money in the Savings Account, you deposit it into 3 months FD at 3% interest rate. Therefore the interest you will earn is approximately RM5K x 0.03 x 3/12 = RM37.50. Reason why I said approximately is because the actual interest payable is based on the number of days and not months.

So, go check your bank website to see the FD interest rate, or go to 1st page to see some of the rates. If you have RM500 or more, go deposit into FD if you are not utilizing the money or until you are ready for riskier investment.

You can withdraw/uplift your money (Principal in full) anytime you wish, just that you won't be paid the agreed interest rate. But I blur exactly how much interest you will be paid for early withdrawal.

So one of your options for example is that you can for the RM5K split it into 5 FD cert at RM1K cert so that in the even you need to withdraw say RM2K, the other RM3K can still earn interest as agreed at end of tenure. Sometimes you go to bank, you can see uncle and aunties renewing like 20 certs!

Talking about splitting, my RM asked me if I wanted to split my funds for the FD to several certs for the Combo Promo but I said no need.

It's WRONG.

We wish that's how bank calculate interest... Ah Long calculate like that I think.

The FD interest rates quoted by commercial banks are based on per annum and interest payable is based on days.

For example you go open a FD account today (5th July 2012) for RM10K 3 months at 3.6%. This means your FD will mature on 5th October 2012. And as MGM rightly pointed out in his previous posting, there will be 92 days (since we have 2 months with 31 days). Therefore the interest calculated is as follows:

RM10K x 3% x 92/365 = RM75.62