If Bank Negara announces a 25 basis point interest rate hike in July, what will be the interest rate on time deposits?
With central banks around the world accelerating the pace of interest rate hikes, the chances that Bank Negara Malaysia will raise interest rates in July have increased significantly. If Bank Negara announces an interest rate hike, the time deposit rate will also be raised.
The current 1-month, 3-month, 6-month and 12-month time deposit rates are 1.75%p.a., 1.95%p.a., 2.05%p.a. and 2.10%p.a. respectively. If the National Bank raises interest rates by 25 basis points, then the 1-month, 3-month, 6-month and 12-month time deposit rates will be 2.00%p.a., 2.20%p.a., 2.30%p.a. and 2.35%p.a.
With an interest rate hike of 25 basis points on a deposit of RM5,000, deposit users will earn an additional interest of approximately RM1.04 per month.
If National Bank unprecedentedly chooses to raise the interest rate by 50 basis points, then the interest rate for 1 month, 3 months, 6 months and 12 months time deposit will be 2.25%p.a., 2.45%p.a., 2.55%p.a. and 2.60%p.a.
It is generally expected that the National Bank will raise interest rates 2 more times in the second half of this year. Therefore, it is recommended that you should try to choose short-term time deposits so that you can enjoy higher time deposit interest rates at the first time after the National Bank announces an interest rate increase.
Current interest rates for time deposits
1 month: 1.75%p.a.
3 months: 1.95%p.a.
6 months: 2.05%p.a.
12 months: 2.10%p.a.
Time deposit rate after 25 basis points rate hike
1 month: 2.00%p.a.
3 months: 2.20%p.a.
6 months: 2.30%p.a.
12 months: 2.35%p.a.
Time deposit rate after 50 basis points rate hike
1 month: 2.25%p.a.
3 months: 2.45%p.a.
6 months: 2.55%p.a.
12 months: 2.60%p.a.
