FD - Taking it with You

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hi,

The only way to get my elderly mitts on the FD cash is to leave Malaysia. Bummer. Especially if I'm 80 and don't fancy the hassle of re-locating.

Under the Malaysia Moving Forward thread there are lots of suggestions and I will get this to MoTour this year.

What do my2homers feel about the tied-up FD cash?

I was thinking of suggesting to MoTour that after a certain age (for want of a better figure say 80) then the FD could be waived like the heath insurance on the basis of 15 years MM2H standing. Or the FD could be converted into an insurance annuity.

Does the FD have to be until death us do part? Having spent the rest, I'd like to spend this before I go. Of course, currently the FD would go to the next of kin.

[HIDDEN]

Have you used up your allotment to drawn down to 100,000 MYR for health reasons?
That is one way to indirectly get to the money.

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I have assumed (perhaps incorrectly) that the FD was the governments 'insurance' against costs falling on the state in the event of an MM2H'ers poor health, death  etc if there is no-one to fund the cost.

The FD seems high  - once the MM2Her is established in the country - given the income levels/wealth of nationals plus it seems to take no account of MM2H'ers who may also have funds tied up in Malaysian property.

I am sure that anything you are able to do to persuade MoTour to reduce the FD level would be very welcome to many if not all MM2H'ers.

Keep up the good work Scott, your efforts and contribution really are invaluable and are very much appreciated.

Jac

[HIDDEN]

I have assumed (perhaps incorrectly) that the FD was the governments 'insurance' against costs falling on the state in the event of an MM2H'ers poor health, death  etc if there is no-one to fund the cost.

The FD seems high  - once the MM2Her is established in the country - given the income levels/wealth of nationals plus it seems to take no account of MM2H'ers who may also have funds tied up in Malaysian property.

I am sure that anything you are able to do to persuade MoTour to reduce the FD level would be very welcome to many if not all MM2H'ers.

Keep up the good work Scott, your efforts and contribution really are invaluable and are very much appreciated.

Jac

Yes, it does seem a little "unfair" to have the money tied up.  As some of us move into our autumn/winter years, the funds could be utilised to obtain a full time carer (if needed) and this would be creating employment.  Certainly that is something that would be prohibitive here for me in Sydney due to the expense involved. 


Spider

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I understand the purpose of the FD. It essentially represents an long term investment in Malaysia in exchange for the privileges offered by the program.  The bank does what any bank does with any deposit over the fractional reserve requirement - lends the money out to ostensibly worthwhile projects, and in return offers you an interest payment.  As with any bank deposit, you don't get to decide where the money is invested, the bank does. So be it.

As any reasonable person would, one should be concerned about the loss of liquidity and investment risk. As long as the return on the investment (in this case, the interest payment) is as good or better than what could be earned elsewhere, and as long as the risk balances with the reward, then it's fine.  In my case, I figure that money would be invested in something fairly conservative anyway (in a different context - were my wife and I to retire in the USA, for example) - CD's, a money market account or T-Bills with similar yields.  And everyone's tolerance for risk is different.

Without having looked closely at the options for where the FD must be deposited, we have some concerns.  We'll take a closer look as we go along.

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hi, Achilles,

Welcome to the site.

The FD is also another have/have not filter as well as a commitment.

The problem is what are you going to do with a bank going under and your stay in Malaysia is reliant on keeping the FD.

Malaysia, followed by Singapore, followed the world trend in 2008/09 and guaranteed all bank deposits till December 2010. This replaced the general bank deposits guarantee offered by PIDM which was limited to RM60,000.

Najib has said that when the blanket guarantee expires in 2011 then the PIDM cover will be increased to RM250,000 from it's current RM60,000. That will come pretty close to safeguarding the RM300,000 for under 50's, and us over 50"s are well covered.

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hi,

Check out Reply #23 on : Fixed Deposits are Insured

Don't know if the proposal has yet been formally approved.