Cap the FD at current levels or scrap it (concern over RM500,000 level)

[scott]

hi,

Please feel free to comment and develop.

regards, Scott

 

[scott]

hi,

The rumours of a few weeks back about the FD going up to RM500,000 were just that, rumours.

What happened was that the residual amount of the FD (i.e. the minimum FD to be maintained after taking out for approved expenses of housing, medical and education) was raised from RM60,000 to RM100,000 (over 50) and RM150,000 (under 50). This applies to new applicants from the 1st April 2009.

What's a bit out of sync with all this is that at RM60,000 the residual FD was at the maximum level for guaranteed bank deposits.

In October 2008 Malaysia offered a blanket guarantee on all deposits, for any amount, valid till the end of 2010. When 2010 comes and goes I imagine that the default guarantee of RM60,000 will come back into place.

Unless this guarantee is raised, it means that the residual FD will be much higher than the guarantee. It's something to bear in mind. I suggest that on the wish-list of items we add something like, "the residual FD should not be higher than the guarantee on deposits."

regards, Scott