No take loan is better.

Yes, your banker is correct.
Settle earlier won't result in saving interest, as term loan interest is calculated straight line one.

Term loan works like this.
You take 50k at 3%, means your total pay back is 51.5K for 12 months.

Then 51.5K / 12 = your month repayment = 4291

It works out you are paying 125 interest per month.

For the first month, Rm125 is 3% of your 50k
For the second month, you still paying Rm125 interest, but you only owe them 45709. = 3.28% pa.
For the third month, you still paying Rm125, but with 41418 balance = 3.62%

Yes, I would agree it is a bit too long.

But having said that, it is unlikely for FD interest rate to be more than 4~5% for the coming few years.

With slowing economy, IR is unlikely to rise in near to medium term.

IR generally rising with robust economy, high inflation. Both GDP figure as well as CPI doesn't suggest BNM will be hawkish on interest rate.

It depends on one risk appetite then.
Equities, bond, reit, foreign currency FD can be option to explore for diversification.

Even though I view IR is unlikely to rise for next 3-5 years time, a 5 year FD still a too long tenure to commit, at least for my personal view.
Also, I view IR is unlikely to rise, it doesn't mean overseas IR won't. In fact

As within this 5 year, bond price can plunge, equities may plunge, foreign currency can plunge to attractive level, whereby it may present a good opportunity.

Asset allocation is important. You never know when you need to the money, while liquid money enable one to grab opportunity when it comes.

Need to go under legal process to get LA (letter of authorisation) to withdraw the FD, which asset of the person died is distributed based on family estate law.

It just means the offer of 3.2% ceased, aka you no longer can place your deposit at 3.2% when you want to deposit time.

If higher interest rate elsewhere, that even if a mere 0.2% difference on 200,000, means RM400 pa. Not enough to pay annual fee for the card?

Having said that, Citigold (if) does provide good service as compared, and convenience, which is something may not be quantified.

Personally I won't bank with bank that provide lousy service, queue always long, even not many people (I experienced once need to queue for half an hour just for a simple transaction), and frequent offline one (how frustated you go to bank and teller told cannot do anything, deposit nor withdrawal, because offline and teller try to come back afternoon, see can or not), what kind of service is that (not professional at all), for a bank that running billion of asset.
I do not know why a bank can be offline for almost whole day and often happen from time to time. While others seldom happen.

Even though they may provide better interest rate, I never want to have relationship with them. Time is invaluable, tell me to wait for half day or whole day, wait for them to be online?
The anger suffered by me may make my life shorter as well. Last part joking only.

Alternative, if fall short of 200k that required by Citigold, why not opt to downgrade to ordinary one (non-citigold) to save the RM80, while can downgrade the card as well, which doesn't require annual fee or can opt for waiver of annual fee one.

This post has been edited by cherroy: Aug 12 2013, 09:30 PM

MGS yield won't affect FD rate.

FD rate is always moving based on OPR.

Bank may offer slight higher rate they are more eager to take in more deposit (without change in OPR).

Unit trust got commission/service charge incurred, while FD doesn't...

I do not see it as "attack", as within this period of time, RM vs AUD/NZD movement actually quite stable.
It is RM vs USD/SGD, that drop a lot.

Even the current account surplus drop to 1B, it shouldn't cause any major concern.
As long as the current account is surplus, or within a number not too big (be it surplus/deficit), it means balance of payment is ok.

After all, foreign currency reserves is good enough to withstand the deficit situation.

Both India and Indonesia are running at significant current account deficit, while Malaysia a shrinking surplus is still better than deficit number.
The difference between is the former two countries are running at trade deficit + current account deficit.
While Malaysia still at surplus figure, yes, it is shrinking, and trending down (may as well into mild deficit situation in the coming few months data, if based on the trend and movement of outflow money recently), but with > USD 100 billions foreign currency reserves should provide a lot of cushion before situation turns like 1997.

If the currency is depreciating fast, it may reverse the trade deficit situation already, as cheap currency boost export and hinder import due to high price for overseas goods.
This was happening on aftermath of 1997 crisis.

So at a surplus of 1B is still ok number.

This post has been edited by cherroy: Aug 30 2013, 10:16 PM

I do not think there will be any change.

Rise? Will harm the already slowing economy.
Drop? No the right time, as it may send RM depreciate more against USD, which may result in inflation issue especially just after the petrol price hike.

Raise rate when the economy report shrinking export, lower trade surplus, and slowing GDP number?

I cannot brain it.

RM only went down against USD, SGD.
Against the like AUD, NZD, it is not.

RM is not alone on this, regional currency also facing this, due to expectation of QE tapering.
At 3.27~3.35, I think BNM still can tolerate, as a slight lower rate may boost already shrinking export.

It is too soon to react by raising rate at the moment, as RM depreciation issue is not as severe as Rupiah or Rupee, at least until now.

In fact, look at bank FD and FD promotion around, it doesn't suggest bank see rate is rising either.
FD promotion rate is getting lower across. In fact, very few offer long term promotion rate to lock down customer.
(when rate is set to rise or bank see rate going higher, bank generally want to lock down the rate to make more profit in the future when rate rising).

FRIND is not a FD, why post in FD thread.
Although also contain F & D.

It is more towards investment already.

This post has been edited by cherroy: Sep 4 2013, 09:47 PM

I never want to invest in structured product that is callable.
Totally not in investors control at all.

I experienced before, situation is good and favourable time and can reap good yield time, the bank called back.
Experienced with a Klibor structured investment previously.

Don't need to delete, just to remind for those may not investment savy people.
As those belonged those structured investment category.

As some newbie may confuse FRIND or any structured investment even though there are capital protected, but they are never a FD.
As stated clearly across, those investment is not PIDM, similar to one invest UT with banks, the different is banks structured it become a capital protected only.

It is quite easy to structure a capital protected investment on one onw.
You have 100k and time frame is 3 years.
You put 90K is a AAA rated bond that carrying 3.33% yield. After 3 years, you get back 100K, viola capital protected.

While the rest 10K put in warrant, options, derivatives that may win big, as they carrying leverage power to do so.
So if as planned, the 10k become 20k, the total investment final value is 120K, so equivalent to 6.66% yield investment already.

This is how can a structured investment being crafted out.

FRNID = Floating rate Negotiable Instrument Deposit.

Where got "fixed deposit" term?

FRNID is you give certain amount with the bank, (not the same as saving or FD deposit), by then bank use it for specific investment purpose as stated in the structured product.

It depends, but previously I am confident that KLIBOR won't rise, so I took the structured product, that if KLIBOR doesn't surge beyond x%, the structured product give good yield.
But sadly the bank call back the product since it has callable option.

Basically it depends on the clause set, not every product is the same, and vary from each other in term of the clauses.

Some callable due to hitting whatever threshold, some callable due to xyz condition etc.

Actually, there is nothing to shout about capital guaranteed.

A 5 years structured product with capital guaranteed, if situation doesn't favourable, result in 0% return aka capital guaranteed get back, one already lose out 15% opportunity cost already.
3% pa x 5.

Tell the RM to fly kite if the RM said FRNID or any structured product is a FD.

I hate banker do not tell customer honestly.

As rule of thumb, do not understand, do not invest.
As it is 5 years commitment, if do not understand, and do not know the clause of the structured product, it can be a long painful 5 years wait if situation become unfavourable that result in capital guaranteed only.

This post has been edited by cherroy: Sep 5 2013, 01:45 AM