gsc,

Good point. I have been wondering wihat really is this PIDM, do banks pay to PIDM for the guarantee, how much, etc., etc.

Even with member banks paying for this service, I really doubt that the service fees will be sufficient to pay to the depositors if the bank(s) closes down. Maybe the final big brother at the end of the line is the govt to decide and bail out the troubled bank(s). Just my thought.

How much do banks pay for this PIDM service ? RM x million per bank per year ?

How much are depositors' total amount in a typical bank ? RM 100 million ? RM 1 billion ?

Something does not add up.

My 2 cents.

What about the following year (second year)?

I only did it for once off RM3000 deposit and then see what is the outcome after 5 yrs.

One can repeat the RM3000 deposit on the 2nd, 3rd .. yrs.

My rough estimates after 5 yrs with RM3000 yearly are

PRS ZERO return          total amount after 5 yrs = +20%
PRS 3% return            total amount after 5 yrs = +30%

Sorry if the above is still not clear. 

Cheerio.

I don't know how PRS works but for the tax exemption benefit, I doubt you can enjoy it again for the second year with the same RM3000 balance brought forward from first year. 
I guess only additional fresh fund in second year gets the tax relief for the second year. The 1st year deposit no longer entitle to claim tax relief.  With that in mind, you may not achieve the above returns.

Yes, fresh RM3000 every year as you have described.

I do not mean 20% pa for the 5 yrs.

But at the end of the 5th year, the total amount will increase by 20%.

I do not know how to calculate the effective rate for a moving capital add-in (additonal RM3000 every year). Thus use the increase in amount after the 5th year as the yard stick.

Cheerio.

How do you get the 20% return in 5 years on a deposit of RM3000 if:

1)Tax benefit is just for the 1st year.
2) PRS ZERO return for the 2nd to 5th years ? 

Just finished tidying up my spreadsheet.

Can you show me how to show cut and paste an image here ?

The IMG button here refers to a web site I am having access problem.

To avoid further table tennis here, may be give me your email address and I will forward to you my spreadsheet.

Thanks.

Press print screen button once > patse it on Paint > crop it > save as jpg file type on the desktop.

Attachment > choose file from desktop > add this attachment > add to post.

I don't need the calculation, just wonder where the return comes from, from 2nd years onwards when PRS zero return.
Assuming you only invested rm3000 for the whole tenure of 5 years.

Finally, found the attachment function at the bottom !

So here it is.

Cheerio.

My opinion is, I don't think IRD allows you to claim 5 times tax relief with single initial rm3000 investment.

Sorry that my spreadsheet is still "muddy", hard to understand.

For the table I have posted, this example is for one tax claim only. Otherwise in the "FD with tax refund" column, the amount will increase by 3000*0.26 every year i.e. 780. In the table, it increases only by the annual FD interests.

Cheerio.

I see. If you have a large taxable income under 26% category you may also want to add on the below tax deviation planning:

The benefits are better than PRS though.

Skim Simpanan Pendidikan Nasional (SSPN-i)

* Tax relief up to RM6000 each year per IRD income tax account (Budget 2013) for "INCREMENTAL NET DEPOSIT" each year.
* 2011 dividend paid out was 3.75% and 2010 dividend paid out was 3.25%
* Free Takaful insurance cover.
* No 5 years contract, can withdraw and deposit any time.

Condition: You must open a children account.

Please input to your spreadsheet and see what is the return after 5 years ?

HLB promo
http://www.hlb.com.my/promo/pfs/dep_prospe...dex.jsp?s=promo

what is the average rate?

anyone still can get 5% from below?
HSBC 5% interest for new branch promotion

I have just placed BII Maybank FD.. put in RM 10,000 equivalent for 5 years.. get Samsung Galaxy Note 2 HP + 1%  interest p.a. On average work out to be ~5.4% p.a. Just so happen need to buy HP....

Anyway not applicable for all of you... 

Indonesia bank so good ah.... can get Galaxy Note 2 (worth RM2k) ... that's already 20% "interest up-front"