People are struggling to have enough cash at there!

Cash is the king at such situation.

PIDM just cover 250K per account entity basis, it is not covering the entire bank liabilities.

PIDM is a gov agency not ordinary private insurance company/body.

Those bought gold at peak price a few years ago, loss about 20~30%....

By the time if PIDM needs to step into a bank, you don't worry about the PIDM coverage anymore.

If one bank is known to be in difficult situation, the first thing in depositors mind is pull out the money first instead of thinking got PIDM or any guaranteed on the deposit.

The answer is no.


This post has been edited by cherroy: Jul 8 2015, 09:52 AM

Actually depositor trust on the bank should be based on reputation of the bank in term of well run, prudent in financial management etc.

Normally from the event the like financial crisis/economy recession etc that we can see clearly how well the bank is/was run.

Yes,

I posted just to clear some common confusion, as came across many said, abc bank is gov owned, or gov is major shareholder, so those deposit must be guaranteed by gov, <--- this is a wrong concept to start with.

Contributor KWSP money is guaranteed by gov.
But oov never said they guaranteed those company which is majority owned by KWSP.
This is the difference.

MBSB is a company/finance company that owned majority by KWSP or in other word KWSP is a majority shareholder of the company.

A limited company (sdn bhd/bhd) liability doesn't go beyond to the shareholder one. So KWSP has no obligation to guarantee it under ordinary company act.

KWSP owned plenty of company or listed company out there, and is a major shareholder of many company, so you can't say those company are guaranteed by gov, right?

Fyi,
For most deposit more than 12 months, banks do give 6 months interest one.

There is a reason, why a lot of time, those 15 months promotion FD, they need to be CASA related, as interest is credited into the CASA.

Almost all major currencies having zero or super low interest across.

The min of 1 month FD is same across almost all banks, aka RM5k.

There is almost no chance for OPR to be raised upwards.

The reason of banks need more cash or liquidity is about Basel III which is scheduled to be implemented in the near future.
In the new Basel III, the requirement for liquidity ratio is higher, and only 3 months above deposit can be considered as liquidity (something like that, quite complicated as well).

No bank has a view that OPR is going to be revised upwards as far as I knew.

If bank has a view OPR is going to go up, the board rate of FD will go up across one, with longer tenure well above OPR, which is not a case here.

Promotion FD - normally banks require certain deposit/liquidity, as in promotion FD, they can control the amount of deposit they take in, once reach their required target, they can simply remove the promotion.

So they are in better position in maneuver the amount of deposit with the promo strategy instead of adjusting the board rate.
That's why the T&C in the promo FD, always stated, the offer period, or bank reserved to end the promo or ended when received 500 mil or something like that.

Most banks I knew offer DCA with min 250K.

If you need USD in the near term, it is best time to enter DCA with recent volatility in the market, you have nothing to lose if you really need the USD.

Interest rate up ---> slowdown the economy, as loan become expensive.
A slow or poor economy condition --> weak currency.
Weak currency --> import bill goes up --> inflation --> raise rate again?

If like that vicious cycle looping, not something wise to do.

It is not about PIDM or not alone.

As general, not specific,
people put deposit in a bank could be due to the bank is well run, low NPL, efficiency, accuracy, prompt service etc

Disregards it is PIDM or not,
You don't want to put FD in bank that lend out money simply with potential high NPL, right?

Also, some people may establish better relationship between, which may result in dealing with the bank in a much convenience as well more confidence mood.
Go to a bank, want to put a deposit, officer blur blur about promotion, don't know this and that, all confidence lose already.

So plenty of reasons, it could be personal preference as well, no right or wrong.

This post has been edited by cherroy: Aug 18 2015, 10:51 AM

I taught 5%, instead extra 0.185%.

All company are limited, aka Berhad.

Why it called limited or Berhad?
Because liabilities stay within the company, aka limited within the company, it doesn't go beyond shareholders.

Owner of company or shareholders of company do not bare the company liabilities.
So it is same with banks (as banks also a Berhad entity).

The issue "berhad" I brought up is about the liabilities doesn't go beyond shareholders.
Those PIDM guaranteed amount is not from banks' shareholders.
So no contraction.

If BR is owned by MoF, and if the bank deposit is not stated "guaranteed by Malaysia gov" just like BSN, we cannot say it is guaranteed, even though in the most worst circumstance, there may be bail out by gov that resulted liabilities of bank is fulfilled.

Even though at the end of day it may looks the same (deposit still intact), but when there is no clause or any law stated the deposit is guaranteed, then it is not guaranteed. As simple as that.