Usually normal FD are supposed to pay the interest at the end of tenor (period in months or years) on maturity. However some banks have monthly interest payments as an option which you must choose during placement of the FD principal (your capital), subject to certain conditions.
For example, Bank Rakyat requires at least 5k, tenor of 6 months or longer, and an account to credit the interest automatically each month.
Ambank also offers monthly interest for senior depositors. Other banks may offer monthly interest but usually specific to a particular promotion such as HongLeong current offer for seniors (qualifying age is not standard for all banks).

Interest rate may be higher for senior or priority/privilege/private higher worth accounts but need to ask to get it if you qualify.
Usually the banks allow a senior to have a joint account with a younger person/s.

To avoid any confusion, place your FD not later than the 28th of the month, then the interest will always creditted on the same day each month.
Some banks calculate based on 29/365 when a leap month occurs, and 28/365, 30/365 or 31/365 for other months..
Some other banks eg Maybank, will take into consideration leap month and use 366 as divisor.
Alliance Bank however, will divide the total interest due by number of months (promo over).
All the banks will make adjustments to the interest paid due to rounding error for each month.
To avoid confusion, you may place a multiple of RM 365 such as RM 3,650, RM 5,110, RM 7,300, RM 10,950, RM 36,500.

Depending on the promotion, interest can also be paid upfront, at end of each step, quarterly, halfyearly, yearly or on maturity besides monthly.
It is highly advisable to clarify the interest payment on each placement to avoid unpleasant mistakes.

Some banks limit the maximum principal for each placement of their FD offer. An offer may disqualify priority/privilege/private accounts or business.
Some attractive FD promotion offers are only for once a customer account for a certain maximum amount only and for a limited fixed tenor.

To avoid any big losses in interest due to unexpected need to remove (premature uplift) the FD earlier (especially for long term, higher rate FD), it is highly advisable to split up the capital into different FDs.

If you are willing to take the risk that interest rates will not go down and want to take advantage of the best promotion FD deal each month, your FD placements should not be in one big lump FD placement but spread out evenly about one or two months apart with the maturity date somewhere between 17 to 27 of the month.

If the maturity date falls on a weekend or holiday, you should uplift on the first following bank working day. Some banking FD programs will know and already changed the maturity date on the certificate and even print out the total interest due, but there are still banks that need to be asked to check whether it is non-banking day. Some banks will make two credittings for the actual maturity date and for the extra holidays. If you uplift later, you will not get any extra interest. To avoid any problems at banks that do not automatically pay or adjust for the forced holidays, you may try to avoid maturity dates that falls on weekends and holidays by placing on chosen days.

Usually it is not good to place according to the normal board rates as you will lose out a big amount of interest. On maturity, you should remove the principal and interests even if automatically renewed at board rate and place at the best deal for the month which should be known by then.

Most banks require you to go back to the same branch to uplift on maturity. If you lose your FD certificate, you will face some problems and have a penalty/fine deducted. Electronic FD (eFD) avoids this problem as no paper cert is involved. Unfortunately the best rates are not here.

Ambank, Bank Simpanan Nasional and Bank Rakyat allows uplift on maturity at other branches. Please check the current maximum amount (interest plus principal) allowed.

Ambank and UOBM says all computerised and the paper detailing your FD placement need not be shown. Only need to scan your thumbprint and IC. However, be prepared in case your thumbprint cannot be read.

This post has been edited by Deal Hunter: Jun 7 2016, 02:22 PM

OCBC still having promo for 12 mths 4.2% 10k minimum fresh fund till 31-8-2016 when last visited on 8-6-2016.

For the extra good stuff, need to put in some effort. Currently only 2 meets your request.
4.5% for 12 months at a few Affin Bank branches. Telephone the various branches (not the general call line) and see whether the branch still have it and any minimum conditions. This is rather unusual as promos usually are for all branches..
4.35% for 12 months minimum 10k at Bangkok Bank. There are only a few branches in Malaysia.
Both pay interest on maturity.
Looks like most folks here are trying shorter periods at 4.3% and below hoping to catch a possible increase in FD interest promo rates.

For STEP-UP type FD promotions, the effective rate quoted is a simplification. The actual effective rate depends on the particular month and whether you placed on the 29, 30 or 31.
ACTUAL accurate effective rate is the sum of the interests for each step period (number of days in step period / 365 x % step rate /100 x principal) divided by principal and multiplied by 365 / total number of days.
The SIMPLIFIED inaccurate effective rate used by the banks is calculated as if all the months have the same number of days, and the date near the month end does not matter at all.
For Maybank, the divisor is 365 or 366 depending on which year is involved for the December and January portions.
For those who qualify or get monthly payment of interests, you need to take into account that the bank needs to pay each month for those who did not avoid the 29, 30 and 31.
As for problems with rounding treatments, the simplest way out is to choose a multiple of 365 (or 366 for Maybank in 2016 tenor) which will give a fixed amount per day. For example Affin, rate 4.5%, principal 36,500, will give interest of 4.50 per day. Note that this calculation trick can work for any length of time except at Maybank on a leap year.

Sorry, don't have any simple rule of thumb for banks like Maybank if you wish to place effective date in 2016 and mature date in 2017 or later. For those who are particular, or have difficulty to answer for some slight discrepancy raised on the accounts of fixed deposit income received, they may wish to migrate over to a bank that calculates based on 365 days always. In a leap year, they will have the benefit of one extra day interest, thus their real interest rate is nominal interest rate x 366 / 365.

Unfortunately the banks are kinda disorganized without any firm standard ruling from the relevant authorities/bodies even after the introduction of daily calculation of interest on the daily balance in savings. and not everybody had discarded the old approach of 366 days for leap year. It is like thinking that in a leap year, let the bank pay you less per day, and in a non-leap year, pay you more per day. You think this make sense if you were daily paid? This is one of the reforms in bank computing that should be standardized to all 365 days basis as it will simplify accounting and computing matters and reap future benefits like metrication of money. Maybe 4 years for a repeat is something that can be ignored as a small recurring nuisance for napoleons.

That 36,500 is just an example. As long as 365 multiple with the nominal interest rate yield a daily interest to an exact sen, it will do. It works fine all the time regardless leap year or non-leap year for banks using 365 days method. Examples:- 4% get RM 4 per day. 4.3% get RM 4.30 per day,
and 4.5% get RM 4.50 per day. If place 18,250, get RM 2, RM 2.15 and RM 2.25 respectively. Very simple.

For Maybank, you need say 36,600 etc as the divisor is 366 for the placement in 2016. Other non-leap years, can use 36,500. You can actually do this using e GIA promo which you can uplift anytime and the interest calculated on the days. You can take back RM 100, which will earn RM 4 if it remains for another year. Please figure it out for yourself how bigger amounts can shock you.

This post has been edited by Deal Hunter: Jun 24 2016, 05:50 PM

The Maybank answer is just an illustration to okuribito question. Those who had taken up the 4% for whatever short hedging reason/hope may think about the above implications. I am not recommending any such placement. Up to you. Personally I do not even consider any placement below 4.3% for some months already, as I will only place at the best 3 deals at any time.

Why not top deal only? Because need to do musical chairs due to fresh fund and minimum conditions.

This post has been edited by Deal Hunter: Jun 24 2016, 08:07 PM

Good point. But usually top deals keep changing with promos from different banks. The basket case applicable for savings and normal board FD rates.

How low can you go anyway? Does it really have any useful good effect or will it create other unintended ill effects? Why not just bankrupt the banking industry by making sure less funds remain in the country in the name of helping the economy?

I would happily put my money at Indian FD rates if somebody will tell me how to do it safely. We have AUD, NZ, Euro, US foreign FD at banks but why no mention of Indian foreign FD?

Thanks Ramjade. The article is not clear whether it is only for Indian nationals or Indian Origin Nationals, or whether other Malaysians are eligible.

But is there something stopping Malaysian banks from having some kind of arrangement to have Indian FDA. Or it is there but not advertised but have to dig it out from the banks treasury people?

What is all this funny talk of financial centre blah blah?? Are they really sincere, serious or sleeping? India and China not big enuf or impt izzit?

Don't just talk about flying there even with AirAsia unless Tony wants to organise flights for investors/tourist package complete with seminar on how to arrange to continue placings and transfers without flying everytime after the first trip.

Anybody with experience to share how this is done?

When we look at things from the bank's view, the main thing is the cost of funds supplied at interest rates promised to depositors. This is loaned out to borrowers and need to be replaced with new deposits. Consumer debt loans ie property and vehicle loans are expected to be cautious. Infrastructural giant loans affects some banks only. Trade business loans - maybe they do not need extra. Industrial production - not really, mainly internal growth or funds. Shares - ho hum.

As for policy, consumer debt needs to be reduced as a safety measure. Productive loans are mainly not affectable.
Promised rates at somewhere 4.2% to 4.5% in collected promotions. Is the supply of available savings big enuf for lower FD rate to be offered since loan demand seen as softening? Will there be significant outflow for purchase of UK foreign currency or Indian FD? After the current promos will the banks hold enough funds for half year ops?

Looking at these factors, OPR in Malaysia can actually be raised as this is a rather appropriate timing considering the circumstances. Whether FD rates follow up depends on the banks needs and profit margin. If loan rates go up, profit may also be adjusted up, resulting in more tax revenue.

We really cannot simply follow the other economies as our circumstances are so different. Take the opportunity to achieve our policy goals when the circumstances allow and not wait till it is too late.

Actually for FD placed straddling leap year, there is an arithmetic solution using common multiple. The answer works fine for currencies from some millionaire countries like India, Indonesia but not so easy for Malaysia's case because of the figure involved. For Maybank at 4% pa the answer is RM 133,590 (365 x 366) which gives ipd (interest per day) RM 14.64 on normal year and RM 14.60 for leap year. For general use for other interest rates, one figure is 2,671,800 (20 x 133,590) or some multiple of it. Try it. No sweat if Rupiahs involved. If want to apply or copycat, need to pay careful attention to look at the nitty gritty and the different circumstances - there is almost nothing equal in actual practice.

This post has been edited by Deal Hunter: Jun 26 2016, 05:31 PM

Probably still have enough collected from their previous 4.5% FD promotion. So no need to offer anything high. Just enough to try to keep those blindly loyal customers who do not want to be bothered to shift to another bank.

If you have 5 million, surely you would not even look at HL now unless you are sleeping on the job or want to help the bank? Maybe just some reverse psychology for marketing their FD to attract as tho very hot bargain and need to limit the good stuff per customer.

If no promo, the retail client on maturity or walk-in will just go to any other bank with promo. So always need to have some promo, never mind not a high rate. There are always first timers and folks who don't bargain hunt, or waste time, or feel the difference is too low to even cover their transport and cheque costs.

The slow OTC transfer does not help matters, nor the limits on IBFT and IBG transfers thru ATM or internet. Even cash top-up thru MEPS ATM to make the minimum is constriicted by the rules on such cash withdrawals. Not everybody is happy with the idea of carrying big sums of money around from bank to bank.

From experience, I don't think bank staff are really that conversant with all the trip-ups in the system. Maybe the top people should get off their Beemers and take the bus (get off their arses and really look how screwed things are). Maybe not really want to make shifting around too easy?

Besides Malayan Banking, Standard Chartered is another bank that uses 366 days. Number of days in 2015 = 31-12-2015 - effective date in 2015, was multiplied with the interest rate and divided by 365. Number of days in 2016 = maturity date in 2016 - 31-12-2015, was multiplied with the interest rate and divided by 366. Both interests were rounded to the nearest sen and added to give the stated interest given on maturity.

If you had paid attention to the nitty gritty of the step-up FD calculations, you should know you will not get 4.5% exactly. So if you hope to add all your monthly interests - you will be off.

If your effective date is anywhere from 1-28, (1-29 if covering February in a leap year), the bank does not need to know what is the actual effective date of each customer or placement as the total effective rate is actually the same for each particular month of the promo. Thus say you place in October 2015, there is a real common effective rate for those placing between 1-29 of October 2015. For November 1-29, there is another different effective rate figure, and so on until the promo ends. Undestandably, the banks would not like to tell you that certain months are better or worse otherwise customers may want to choose their months of placement and affect the promo targets.

However, for those who placed on say, 31 October 2015, the interest payment in February is on 29 February 2016 as there is no 30 or 31 in February and the payment must be made once each month. November, April, June and September being paid on the 30th instead. This affects the total number of days for each month's interest payment, and particularly confusing on the change of rate. Hence, the advice is not to place on the 29-31 of any month when dealing with step-up or monthly interest payments. Not only you can be confused, but even the banks may be confused if the staff or programmers do not understand that the number of days and step-up boundaries are affected due the need to pay once each month.

FD different from last time as calculation on days basis and not month like savings with out the transactions of withdrawals and deposits.
Creditting of interest no longer at end of month or start of month but once a month as close as possible to effective date.
Differences due to miscalculations/expectations affect cash flow plans for usage or replow into other FD at the highest possible efficiency.
It is can do if got plenty of extra cash income/backup but will not get so much more.
For newbIes, ignorance is bliss since most of us will simply make some wrong assumptions, cannot be bothered to do the calculations, or do not know how to do it correctly. It took me some time from checking on the old step-up and monthly payment promos to figure out what was happening to enable me to work around and get best deals. Previouslly, I made the mistakes, but after reviewing and finding out the effects, I plan the musical chairs better in my favour instead of on luck.

Big boss says to his financial people, "You say this special promo paying monthly interest at 4.3% p.a ending this March is worth catching for 6 months. Just scrape the loose funds around and see whether you can place 5 million. If short a bit, no problem, can top-up. When can we do it?"
"Give us some time to arrange things, and meet any unexpected problems. Probably near end of month, can even at the end at last day as good kawan with bank manager."
Big boss says, "OK, I mark Monday 28, Tuesday 29, Wednesday 30 and Thursday 31 March 2016 for standby for the the good day?"
"All days good, boss"
"What no special good luck day like 28?"
"Err, only one bad day."
"Oh what day is that and how bad can it be?"

If you can work this one out and answer, it means you are beginning to glimpse/grasp what could be called the time factor problem - something most people are not aware of when doing time dependent calculations.

This post has been edited by Deal Hunter: Jun 30 2016, 01:09 AM

Affin Bank at branches named in various post above is still top at 4.5% for minimum 10k and 12 months, interest on maturity, until end August 2016 unless quota met earlier.

What lucky day are you people talking about? Don't be superstitious. I only mentioned bad day to avoid in the Big Boss scenario. Any day from 1st to 28th of the month is a good day subject to the usual rules, the period/s involved and what is needed - look at the calendar. Fail to plan or schedule properly means any cincai result also can happen. See the next installment of the Big Boss story. Don't worry if you do not understand or up to it, if don't know what you lose, you won't be unhappy or regret not making things more 88 for your pocket. Anyway, your losses won't be on the scale of Big Boss, at 500 x less at 10 k per placement. But if you are in the same league as Big Boss, you need some proper help.

Nothing to surprise about. Been taking out maturing FDs and monthly interests from BR and sweep to Affin Bank. Keep asking for any special extra nego rate to be competitive with Affin 4.5%. No deal, so cabut. After all, banks treat money like commodity for trading (sound Islamic huh ) and subject to supply and demand and perceptions of customers. It is up to individual bank cashflow projections. The 4.38% with the advantage of monthly interest payment is what they feel they can do to fight funds flight. 4.4% would be nicer but maybe sound too unlucky? OPR is not really in the picture

Nothing to surprise about. Been taking out maturing FDs and monthly interests from BR and sweep to Affin Bank. Keep asking for any special extra nego rate to be competitive with Affin 4.5%. No deal, so cabut. After all, banks treat money like commodity for trading (sound Islamic huh ) and subject to supply and demand and perceptions of customers. It is up to individual bank cashflow projections. The 4.38% with the advantage of monthly interest payment is what they feel they can do to fight funds flight. 4.4% would be nicer but maybe sound too unlucky? OPR is not really in the picture