It is suggested that only short-term FD be made now as Bank may raise interest rates next year.
In the first half of next year, Bank Negara may raise interest rates twice, for a total of 0.50%. Friends who want to deposit fixed deposits may consider short-term fixed deposits for the time being.
The Federal Reserve has continued to raise interest rates, forcing Bank Negara Malaysia to match the Fed’s rate increases. Bank Negara is expected to raise interest rates twice more in the first half of 2023, and domestic banks will raise interest rates on fixed deposits after Bank Negara raises interest rates.
The current interest rate for a 12-month ordinary fixed deposit is 2.85% p.a., while a 12-month fixed deposit promotion can earn up to 4.20% p.a. If Bank Negara raises the interest rate by 0.25% in January 2023, the 12-month ordinary fixed deposit rate will be around 3.10% per annum. Fixed deposit promotions typically offer 4.50% p.a.
If you deposit a 12-month fixed deposit now, even if Bank Negara raises the overnight policy rate, you will still only receive the current low interest rate until maturity, and you will lose approximately 0.25 to 0.50% p.a. of the interest rate.
It is advised that you to choose a fixed deposit of 3 to 6 months.
