PB Foreign Currency Fixed Deposit
http://www.pbebank.com/en/en_content/perso...content143.html



Our PB Foreign Currency Fixed Deposit (FCY FD) Account enables you to :

* Earn potentially higher returns
* Enjoy additional interest rates of up to 1.0% p.a.

The additional interest rates is over and above the counter rates for all types of FCY FD Accounts as follows :

Additional Interest
Rate (p.a.) Tenure Period
1-month 3-month 6-month 12-month
1.0% 0.5% 0.3% 0.1%


1. Open to individual and corporation accounts.
2. Minimum deposits of RM10,000 or its equivalent in foreign currency in a single receipt.
3. Deposit and withdrawal in foreign currency notes is not allowed.
4. Eight type of foreign currencies to invest in, namely US Dollar, Pound Sterling, Australian Dollar, New Zealand Dollar, Singapore Dollar, Japanese Yen, Euro Dollar and Hong Kong Dollar.
5. Upon maturity of the FCY FD, it will be renewed under the respective prevailing FCY FD interest rates, ie. counter rates, without additional interest rates.
6. Rollover of existing FCY FD funds are not eligible for the additional interest rates.
7. The promotional rates apply provided that the FCY FD is held until maturity. We reserve the right to change the promotional rates and the foreign currency fixed deposit interest rates without any prior notice.
8. There is an inherent exchange rate risk in foreign currency deposits.
9. The opening and operations of the FCY FD accounts are subject to the guidelines under the Exchange Control of Malaysia (ECM) Notices and Bank Negara Malaysia.
10. Other terms and conditions apply.

Looks good as alternative to local fixed deposit, right?

Difference between buy and sell price too big. For AUS dollar comparison. Have to wait a few months at least to start getting money

i don mind trying if hav extra cash flow...but too many funds being launched....

Also locking in your money long term is risky... suppose something happens to the country your money is denominated in, you can't take out fast enough + you'll lose all interest.

This post has been edited by wodenus: Jun 7 2007, 12:36 AM

hi guys...actually really interested.

What are the cons? got some kind of management fee? got what kind of fee charges?

i think anything that offers better than malaysian 3.7% either short term (1yr) or long term is a good risk to take. risk however since this is fix deposit we are talking about, should be minimal.

please TS, explain the risk! im potential buyer!

i like public bank....earn me lotsa money d...

in public bank i trust. kekekek

The FD risk is minimal, but the exchange rate risk is not. If you put US$1000 in, you will get US$1000 + 6.15% = $1061.50 at the end of one year. The thing is, what's $1061.50 going to be worth in RM ?

Suppose at the beginning of the year you put in $1000 when US$1 = Rm3.80. So you actually put in $1000x3.8 = Rm3800.

At the end of the year, let's suppose that the exchange rate is now US$1 = Rm3.00. When you take out after one year, your $1061.50 will be worth $1061.50x3 = Rm3184.50.

So basically, if this were to happen, you'd actually lose Rm3800-Rm3184.50 = Rm615.50 after putting your money in FD for one year.

You see how you can lose money in foreign-currency dominated FD now ? it's not risk-free. It all depends on whether the currency goes up or down.

Have you really stopped to calculate how much money you really made ?

This post has been edited by wodenus: Jun 7 2007, 12:50 AM

I think most of us know about the currency risk exposure. Well if you really want to reduce your currency risk. Have a basket. Take up maybe 5 different currency exposures. But I am uhm.. against taking US$ as part of my basket so make it 3 or 4.

I actually feel this might be a good place to put your money if there is low or no mgt fee & minimum transaction costs or other fees. I think it might be a slighter better option than putting in funds provided is low mgt fee & transaction cost.

This post has been edited by Lcsx: Jun 7 2007, 08:14 AM

to me, this is a bad investment, as both the interest and exchange rate are in op risk, if we invest in 12 months tenure. usd, pound sterling and euro are about at their peak interest.

exchange rate is too risky as we do not have the control to put long or short over the currencies we hold .

as what one of the forumer indicated, his calculation is very clear to show us the risks that we need to take.

lastly, bank never make loss profit business. just my opinion.thanks

there is already a discussion on this topic last week.

http://forum.lowyat.net/topic/465571

well, i think this topic is more specific into this PB foreign currency FD..
anyway, thanks for informing about tht topic..

Cannot say it is bad or good, it depends on situation and individual financially as well as needs. If you treat it as speculation like share or short term speculation, surely it is not the way to do it instead one should treat it as to protect/hedge against ringgit depreciation which in the mean time get some extra yield.

For example, I am going to send my children to overseas studying in few years time (let say Australia), instead of save in ringgit FD (since no stock or UT anymore, needs to be secured) that yield only 3.7%, I can opt to convert first to AUD then put in AUD FD that yield 6.25%. When my children needs it time, I can just straight away take out the FD in AUD and do a AUD remittance to pay their college fee there.

after several years
Three scenario:
1: AUD appreaciate against ringgit - I save more while getting more yield from it.
2. Exchange stay at same - at least I get better yield for several years already about 2.5% compound interest more.
3. AUD depreciate against ringgit - At least I don't have to fork out more although I lose a bit, but children education fee is more and less secure.

You gain 2/3 chance in this way. But bare in mind, you must at least know that your invested currency is strong and the particular country's economy is healthy which provide strong support to its currency.

In this way, I won't need to worry about ringgit depreciation in the future that happened like 97 that a lot of parent suddenly found their saving previous is enough for their chidlren education overseas suddenly with ringgit depreciation then struggling to find extra money to fund their children, some even has to cancel their plan to study abroad at that time due to ringgit depreciation.

I don't think anyone here is going to invest in USD FD. Also the British interest rate is on the uptrend these few months not down. It is expected to increase further in the coming months. If we are looking at 1 year only I think its pretty good. Besides, isn't FD supposed to be fixed rate rather than floating? so I don't think there is any interest rate risk here.

Also if you hold all 3 NZ, Aust and pound basket. I don't think the fluctuation in 1 year will be that signifcant. I believe this risk would more than justify the ~4% premium against our FD.

But yeah, nvrtheless it is a risk.

This post has been edited by Lcsx: Jun 7 2007, 02:06 PM

It is same as normal local ringgit FD, if you put 1 year 6.25% then the interest rate is lock in, no matter what happen on the interest rate front in this one year.

With current economy and financial situation, among the currency, USD is the poorest, no doubt about it.
Interest risk is not much considered that ringgit interest rate is expected to drop a bit, there is rumour that BNM want to cut 0.25% in the near future.
Only exchange risk which needs to monitor from time to time.

This post has been edited by cherroy: Jun 7 2007, 02:22 PM

I'm interested in this foreign currency FD and a potential investor. However, I would like more infos about this investment:

1. Is it works like FD with fixed interest?

2. Is it auto-renewable?

3. Could you elaborate further about additional interest rates of up to
1.0% p.a

4. Any additional charges like annual management fee or trustee fee?

Tks

1 and 2 : It is exactly as same as local ringgit FD.

3. No fee or charges incur except some banks do charge some management fee if the foregin currency FD account balance below 10,000 something like that which varies from banks to banks (some banks do charge if below minimum, some don't, check with your respective bank)

What's the meaning of "Rollover of existing FCY FD funds are not eligible for the additional interest rates." ?

Sure if you have a reason to use it in the native currency (studies or overseas investment or whatever) then it's a great idea. But if you're just thinking, I want to make more than FD, then you're just speculating, which is not something you want to do with FDs I think.

Well it all depends on your risk and return needs. Those which are willing to take a slight risk and don't want to risk losing purchasing power from inflation might want to take up something slightly higher than our FD rate.

Also for those who believe perceive that the stock market has peaked but still want to invest and don't have many good return venues might want to op for this too.

And for people like me who hate putting their money in funds and might be constrained from active stock management..... also might want to put their money here also.

But of course diversity is they key to minimize risk so don't dump everything you have in this basket. Oh yeah, people who might want to diversify further might want to dump their money here also.

I dont think it works as you all expected. From the information i have, the money in the FD will be converted back to RM once it's matured.