Sorry to disappoint you. There is no compounding at all when interest is given each month. It is never added to the original principal but given away for you to use - no longer have anything to do with the FD.

This is totally different from a savings account like say Maybank Premier Mudarabah Account (PMA), where the sum of the interests for each closing day balance is creditted to the final balance each calendar month in the same account. If you do not make any transactions that affect the end of day balances and the rate does not change, a compound formula can be used.

Usually the old uncles and aunties like monthly interest as they prefer to get their interest monthly for use instead of waiting a long time for the interest on maturity. They do not get anything more $$.

Pro FD investors like to put in larger principals to get large interest per month. Or alternate strategy is to spread out among various competitive promo FDs. The monthly interest is scraped together and used as as contribution to other principal for other new and separate FD. This invest the interest strategy is used to adjust their cash flow to take advantage of fluctuations in the promo FD rates at various times. Properly executed, the gain is more than normal FD interest.

Some passive FD investors will leave the monthly interests in their savings account to earn a little more extra savings interest (not compounded FD interest). Besides the FD account by itself, those wishing to have monthly interest need to have/open a Savings or Current Account as well for the bank to credit out the monthly FD interest. However, do not make the mistake in assuming that the Savings Account will always give interest in your case.

To overcome the above problem, some may make use of IBG to transfer to another savings account in another bank. This sweeping is advisable if the bank pay little or NO savings account interest for low balances (read the small print and conditions for poor interest paying structure for the specific savings account) Some banks annual fees and losses from minimum savings balance and opening requirements may be more than any gain. The interest should be swept to some savings accounts that pay far higher interest.The correct choice depends on your particular circumstances and this may change from time to time.

If you do not know what you are getting into, you may lose due to other costs or earn less than you imagine.

This post has been edited by Deal Hunter: Jan 20 2017, 09:49 AM

You have to wait till Monday 23 January for it to start.

Thanks for informing

The minimum for the Ambank promo is 5k only.

Is this Maybank? Can you let me know where do you see this?

Just walk in to Maybank and ask for the 4% FD.

Can do online or not? Any reference to the promo? Later bank officer don't know ask me where did I see, tell them I see in lyn?

Any maybank also have

People are usually more familiar and may talk about interest added-on at maturity and automatically renew with the bigger amount as principal for the following FD. Sometimes the FD interest is maintained for some time for normal board rates FD.
At present, the 1 month normal FD board rate as reported in the first page of this forum thread is between 2.7% to 3.05% per annum.

To know the effective return for comparison, a rough approximation is to calculate the final amount (all interests+original principal placed) and then minus the original principal to get the computed interests.
For your example, if Principal P =10,000
Rate R per annum = 4 %
Amount A = P x ( 1 + R/1200) ^ 12 = 10.407415
Compound Interest CI = A - P = 407.415
Effective Rate = 100 x CI/P = 4.07415 %
versus the 4%.

Different banks have different ways of calculating but the most important fact is that compound interest calculation is NOT USED actually. Basically need to understand why all interests are on daily basis in case the depositor uplifts prematurely and penalties and the uplift date come into play. How FD interests differ as differently calculated by different banks have been written about in various posts in the past in former versions of this forum thread.

Using the above rough method, the highest you can get is 3.093 % and 2.73366 % for R= 3.05 % and R= 2.7 % respectively.

None of these makes financial sense when compared against offered FD promo rates.

This post has been edited by Deal Hunter: Jan 20 2017, 01:32 PM

cannot do online. i dont see any website. if the officer dont know, I treat you one sweet

If say HABIS , NO MORE, or NO PROMO say the ISLAMIC one at Maybank. (NOT CONVENTIONAL FD). FD New Year Promo 5 Jan to 31 Jan 2017. 2.7 billion size, minimum 10k. Step-up. Still running when visited Maybank on 19 Jan.

This post has been edited by Deal Hunter: Jan 20 2017, 01:23 PM

Thanks guys for the information on MBB current offer.

Called up AmBank and this is what they offered for deposits of RM100K and above.
2 years 3.92%
3 yrs 4.03%
4 years 4.08 %
5 years 4.32%
Interest will be credited 6 monthly .
Apparently this offer ends next week following which there will be a different offer but that will depend on HQ.
cheers.

RM0.00 HLB: Enjoy up to 4.18% on your 8-mth online Fixed Deposit/-i for new funds transferred from another bank. www.hlb.com.my/CNYFD. Till 28/2/17.T&Cs apply

Isn't this old news ?

How are the FD holders CNY hampers looking this year?

as shared by FD gurus previously



The Launch of "IFD-i New Year (12 Months)" [ Maybank ]

Enjoy fabulous rates with a minimum fresh deposit of RM10,000 for Individual or RM25,000 for SME/Business Banking customers in a single certificate.

Offer is open to Maybank / Maybank Islamic customers and is applicable for Islamic Fixed Deposit placement of fresh funds made over the counter only, at any Maybank or Maybank Islamic branch in Malaysia. The campaign is valid from now till 31st January 2017 or upon reaching the overall limit, whichever is earlier.

Campaign Rates are as follows:


*Should there be any Overnight Policy Rate (OPR) change, the offer rates may be revised.

Terms & Conditions apply

This post has been edited by cybpsych: Jan 21 2017, 10:11 AM

was told valid till 20 Jan and subjected to HQ for extension, if any...

believe there is another forumer has updated new rates... seems to be trending downwards...


This post has been edited by Cookie101: Jan 22 2017, 09:27 AM

CIMB 4% @ 3 months, is this special OTC campaign?

Yup need to call them again and ask regarding update on the offer