Fixed Deposit Time Periods

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hi,

Have any of the folks who have recently collected their visas had any problems at Immigration with the length of the FD.

When I collected my own visa 3-odd years ago, my FD's were all for 12 months and there wasn't any problem or comment. Is this still the case?

regards, Scott

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Hi,

No - ours was for 12 months also and no comment was made on this fact. However, it does say on the deposit slip that the money cannot be withdrawn without the permission of MOTOUR. So I guess that this covers it.

Cheers

Brian

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Have just been offered a "13Month FD" at a better rate than 12Month FD. with HSBC. Can anyone advise if there could possibly be a reason why this would not be acceptable to MM2H?

The difference isn't great but every little helps. Bit strange though.

Regards

Ken

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hi, kenandching,

So far, no-one on this site, or the mm2h board at alloexpat have posted about problems with the FD tenure (period).

From the bank's internet sites you can check the rates against the tenure, they go all the way up to 60 months which today gets you 3.60% pa at CIMB and Maybank. Not sure about HSBC.

I remember checking that 12 months was acceptable, but that was some years ago. There was also a discussion on the acceptability of 1 month ++. There wasn't an outcome so maybe not.

I remember that the 12 months came from a MoTour handout so maybe that's become the minimum.

For earlier mm2h participants there was a requirement to have a 5-year FD. This requirement was eased.

I think that these days the priority concern is having a bank lien letter.

13 months ? Perhaps some other members have experience of this and will post.

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Hello Scott.

Thanks for that. I did think that 13 months was peculiar, but with a slightly better rate, worth enquiring.

For anyones interest, HSBC is only 3.2% on a 5yr FD. Not too good compared to the others.

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Could be there is something different in the formula they use to calculate the rate for 13 months? Maybe one intermediate coupon with compounding. Or a different day basis? 365 days in a year rather than 360 for instance?
Check the math behind.

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hi,

I think that CIMB and Maybank offer the same rate for 13 & 14 months.

I guess one reason for the 12 month FD is that anything less seems like a bit of a joke. Imagine turning up for your 10-year visa with a 1-month, or 3 month FD.  The Immigration folks would think you're some sort of wally.

Another reason for the 12 months could be that it's the pivotal tax turning point, if I remember correctly. Less than 12 months and above RM100,000 = pay tax on interest. Above 12 months and RM100,000 = no tax.

The current Bank Negara rate of 2.75% is slightly below the "norm" for Malaysia of between 3% - 3.5% so you could look at a 5-year FD.

I've just been emailing to a friend of mine and discussing FD's. He collects his letter of approval shortly and we were chatting about using RM100,000 for an FD for 60 months at 3.6%, and a 2nd FD for RM50,000 for 12 months at 2.85%. This allows the 2nd FD to be the one that's used for property, medical, education.

It all depends on how you see things going. When I took out my own FD's several years ago it was 3.7% for 12 months.

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You pick up only 75bp by locking yourself in for 4 additional years? In a currency like MYR that can experience inflation and country downgrades?
We wouldn't even go out to 5 years in MYR for the treasury of the bank itself!
Don't do it.

Keep it in the shorter maturities

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I half have in mind Stuurmans post about Foreign Direct Investment being at a low point, and the possible effect on the Ringet, and future Interest Rates.

See no signs of it having any effect so far, and in fact the money changers were telling me that it isn't so much a weak dollar/pound/euro at the moment, as a strong Ringet!!

Don't understand this, but then again, I am not an expert in these matters so who knows.

The only reason I am reluctant to take a 5yr FD is in the hope that interest rates may rise, but I am probably wrong, and will regret it. Certainly the extra interest that HSBC is offering for an extra 4 years seems very small.