Every country macro obj are to have economy growth( measured by GDP), price stability (measured by CPI), every one got job (measured by unemployment rate), trade balance (measured by balance of payment).

To ensure economic growth, government can look into tax rate and government sending under fiscal policy. However borrowing to finance government spending is slowly committing suicide .

Under monetary policy, central bank will look into bank reserve ratio, open market operation, discount rate...these are conventional monetary policy. The new one are quantitative easing (QE), credit easing, zero interest policy, forward guidance...the objective is to control money supply in the market. Thus interest rate is central bank main tool to expand or contract money supply.

BNM has to look into the global market to determine the OPN.

Japan GDP is down for 2 quarters consecutively thus confirming is facing recession, Russia will suffer greatly with the tumbling down of oil prices, trade sanction due to the political reason. China is growing but expected to slow down next year. European union is still struggling. US may start to raise the interest rate next year and money are expected to flow into that direction.

In Malaysia, inflation rate is below 3% and unemployment rate is getting better. In the short term, inflation rate is having inverse relationship with unemployment rate. If Malaysia domestic market continue the current trend and with the GST implementation in next year April, inflation is expected to go above 3%. To cool down, BNM very likely increase the OPN by first quarter to ease the inflation pressure.

This is only my opinion, buy Aus dollar or place Aus dollar FD account because it has been going down due to worldwide commodity prices are going down. Malaysia debt is climbing and ringgit will be very weak.

Place short term 3-6 months FD coz the OPN will likely to be increase either 1st or 2nd quarter next year.

Nominal interest rate = inflation rate + real interest rate.

With bank giving 4% rate for 12 months FD now and CPI 2.7% (if I am not mistaken), the real interest rate we get is only 1.3%.

Thus buying growth potential property is still a better bet. The property price may go down but eventually it will climb back.

This is my opinion and hope it is not off topic.

This post has been edited by gsc: Dec 2 2014, 11:49 AM

wow thanks cherroy and gsc for your sharing... two different points of view

That's a lot to digest & to think about. I think this discussion is relevant in this interesting times, what with the banks casting their fish hooks baited with juicy worms, hungry for our money.

"Russia will suffer greatly with the tumbling down of oil prices" ...
I read that many "petro regimes" ie those that depend on oil exports for their economic wellbeing are already screaming at Saudi for doing nothing (they want Saudi to reduce prodn to bring up crude prices ) eg Venezuela. Is m'sia considered a petro regime? Since we're so dependent on Petronas?

" US may start to raise the interest rate next year and money are expected to flow into that direction" ...
what's their motivation to raise interest rate? If they do, will the others follow to counter the effect on their currencies? Will BNM follow? Or will BNM only raise rates in response to inflation numbers?

What's OPN? or perhaps ur referring to OPR?

"With worldwide low rate across the globe " ...
I don't know but I guess this must be true. But when word-associated with Russia mentioned earlier in your post, I remembered a Koshka who visited this thread asking about FD rates ... figured out she's Russian & so I checked Russian FD rates. Wow! theirs is in region of 8% iirc

"Thus buying growth potential property is still a better bet. The property price may go down but eventually it will climb back." ...
Do you think local property prices will be affected in the next 12 mths? Perhaps due to interest rates going up? That would be a dilemna for FD hunters ... rates go up, we tempted to lock into FD ... hence less money to catch lower priced property?

ps: hope mods dun mind, me in between maturities, so wanna research as much as possible

In order to mitigate low oil prices in their economy, most oil producing countries are letting their currency slide down. This will give the notion of balancing their domestic budget. To me its nonsense, as its akin to printing more money. FD depositor now not only have to contend with inflation but also loss of RM devaluation. Buying properties now makes more sense to safeguard our funds.


This post has been edited by magika: Dec 2 2014, 01:20 PM

When oil price sliding, means oil export countries receive less USD, less money inflow, currency slide down, make perfect sense, even without any intervention.

Current, inflation is largely due to subsidies cut, not commodities.

In business or specifically manufacturing, lot of raw material price is actually sliding down, besi buruk price also go down 10 cents recently as far as I knew.

Just subsidies cut, wages increase (due to min wages), shortage in labour force, that result in higher cost for production, transportation, that resulted in higher price of goods.

On the positive side, export manufacturing will fare better. This in turn will create more jobs. Current scenario is not on the side of savers, on which pensioners will be hardest hit.

In the recent meeting, Opec decided not to reduce oil production and the market responsed quickly with the oil price falling further down. Russia cost of oil production is higher than that of Opec. Russia, EU, USA, Japan and China are the big market economies. Their performances affecting the emerging market such as Malaysia. Petronas revenue expected to go down.

QE is a monetary tool used by the FED in late 2008. Driving to near zero interest to spur the economic spending. US is seeing some signs of recovery and hence would like to end this unconventional QE monetary policy which translate into tightening the money supply. This in turn will increase the interest rate. The money will flow back in the US and it will the emerging market performance. See the following link on QE.
http://www.bbc.com/news/business-29778331

Yes you are correct. It should be the OPR. Overnight policy rate.

BNM will not only look into inflation rate and decide on OPR. The money supply in Malaysia market and hence the business and economic performance is an important factor to determine the fall or rise of the OPR.

BNM sure need to decide on the OPR when GST comes into effect.
Ocbc used to review and publish quarterly on the FD rate. It is unusual to see them have the effective date drag till 31 March 2015, 5 months from now. Does this mean that Ocbc think the OPR will remain till march before GST?

Just recd sms. ..

Enjoy 4%pa(6mths)&4.1%pa(12mths) for min FD of RM10k. This is our way to TQ & #givealittle back.Promo ends 31/1/15. T&C at ambank.com.my/eng/promotions

Edit: already notified by other brothers few pages ago

AND btw, how do you all feel about banks making photocopies of our IC AFTER putting it thru the card reader & printing out all details from the chip? Why still need to make a copy & put into file for some disgruntled employee to mess with? Yeah they stamp it but a fren just told me his experience with one of the foreign bank ... they not only photocopy but enlarge double the size... then they put their tiny 1.5inch stamp in the middle (not obscuring any detail)... wtf!!!


This post has been edited by okuribito: Dec 3 2014, 12:52 PM

Yup^ I do have some accounts with Amb. Gonna go ahead with their 4.1%pa FD soon.

gsc thanks for that BBC article... very well put together & kind to laymen

This chart is so damn scary talk about printing money... quadrupled in just 5 years I think if any other country had done that, they'd be b****slapped by the IMF or the World Bank EDIT- oh shit, they're all doing it ... the UK, the ECB & Japan are all using QE!

Japan was (and still is) also in a similar situation where interest rates were close to zero, couldn't Japan have done the same?

taken from the infographic at the bottom of the article ...

Will the Fed do this? It'll literally prick the bubble, won't it? Interest rates will rise, right?


wish i'd paid attention during econs class LOL

This post has been edited by okuribito: Dec 3 2014, 02:19 PM

QE is encouraging everyone to bet or invest on everything under the sky...That is one of the indirect consequence of QE.

Anyone here is still with Ambank Top Rate FD promotion held 3-4 years ago which the interest is credited quarterly or half-yearly?

I have 3 FDs on this promotion and the counter staff told me that this FD's interest is paid quarterly. And I asked, if I made withdrawal after interest is paid before tenure, will they get back the interest. I was informed that what had been paid, will not be charged back.

So I committed into the FD with 48 months and 60 months. The interest at that time was 3.6% and 4.1%

The 48 months one, last year Dec 2 was expired and I left it over without anything and it was auto renewed to another 48 months with 3.35% interest.
Today is 1 year out of 4 years tenure and I requested to withdraw all the principal. I was told that they will penalty me half of the interest paid for that 1 year.

The issue now is, what I was informed and what they told me now is totally different. Thus, I requested for the term and condition I signed if they have such rule to charge me penalty before the tenure.

They are unable to provide me the T&C I signed or they did not have such thing too. They passed over this case to branch manager to handle and I am waiting for the solution.

How could it be fair to renew me on board rate at 3.35% for 48 months?

This post has been edited by jack2: Dec 3 2014, 04:46 PM

jack2

Its standard practice to claim back interest that has been paid monthly, quarterly and whatsnot. Only consolation is some banks only claimed back a certain percentage if deposit duration has been more than 3 months.Islamic FD pays higher percentage i think. I could say all banks has standard policy of renewing FD on maturity at board rates. Its why quite a number of forumers take it upon themselves to hunt for better rates on before FD maturity. If not fair on new rates then what rate do you suggest? Even if AMBANK has current new promo it still wont be offered to you as most likely it will have the disclaimer ' new funds only'. Think bank easily waste ink to print.


This post has been edited by magika: Dec 3 2014, 05:06 PM

I see two issues here:-
1. Standard practice - I am very sure I asked the question if I withdraw my principal before maturity. Whatever interest paid can be claimed back by bank. The staff answered what had been paid is yours and bank won't claim it back.

That made me comfort to opt for 48 months or 60 months. Even if I need money, I can withdraw every 3 months.

2. I asked for term and condition I signed if there is penalty (just in case I really forgot in (1)), but they can't show me what I signed. Thus, do they have right to charge the penalty? If there is no written agreement, you have no right to charge back.

And you renewed me on board rate with 48 months by giving me 3.35% with this term. Those fresh fund or new customers who deposited, 1 year can get 4.05% with only 1 year commitment. Fair?

Even without promotion, 1 year 3.3% and 4 years you give me 3.35% LOL

Back to the issue, what I was told in 5 years and what I was told now totally is not same case. So, I asked the bank to show me the agreement I signed if they want to charge me penalty.

Stay cool bro. I have no vested interest in AMBANK. What staff, Bank Manager, Sales Advisor and whatsnot said holds no water unless it can be proven. This is the strategy of UT, Investment salesperson sellers as they know it can not be proven. Just check whether the current board rate is 4 years at 3.35%, thats all you can do. Complain or whatever, the case is not on your side.

If on 48 months tenure and can withdraw without penalty, i would think none of us would deposit for 3 months nay 12 months tenure.

I repeat again, promo is to attract new customers, thats it. Its the reason why we moved funds thru various banks and not because we like moving it around.


This post has been edited by magika: Dec 3 2014, 05:22 PM

You are wrong. You thought the 48 months with 3.35% is very attractive? With 3.35% tenured for 48 months with penalty, I believe only ghost will go to tenure it.

Let compare Apple with Apple. I don't want to compare the promotion one.

1 year board rate 3.3%
4 year board rate 3.35% with penalty of half of the interests paid during the tenure.

Which one you gonna opt?

This post has been edited by jack2: Dec 3 2014, 05:25 PM

The reason why we dont find board rates at all the banks any attractive, is the reason why we moved our funds all over other banks trying to find attractive rates. The most stable board rates i would think is Bank Rakyat, so placed it there.

jack2
Banks dont put gun at your head and order you to deposit there. Willing buyer willing seller and remember to check all terms and conditions.


This post has been edited by magika: Dec 3 2014, 05:32 PM

the rhb 9month 4.15% still available? btw, u guys bring cash to do the FD or how u guys allocate the fund without physically teach me sifu? like cant find in their website

This post has been edited by eddie2020: Dec 3 2014, 05:47 PM

No issue at all. I can even lost the half of the interest received and closed all facilities I have with them. It is not worth to stay with them anymore.

Moreover, the thing I hate them is their credit card. Late 1 day in payment of Cc will get late fee of min 10. Unlike other banks who offer 3 days after due date without late fee.

1. Buy banker cheque.
2. Open Saving Account then IBG over.
3. Issue personal cheques.

Almost all banks practise the same policy. Just make sure to check T& C wherever whatever you do.

eddie2020 Hurry bro, last day Friday! min. 50K. no need check website, trust boomchacha's post #2
jack2
and remember maturity date unless wanna pay expensive price of rollover at board rates

This post has been edited by okuribito: Dec 3 2014, 06:41 PM