It is generally expected that Bank Negara will raise interest rates in the second quarter of 2022. Users who want to deposit time deposits may consider depositing short-term time deposits temporarily.
Moody’s expects Bank Negara to increase the Overnight Policy Rate (OPR) in the second quarter of 2022, which is commonly known as a rate hike. Inflationary pressures caused by supply chain disruptions and rising commodities will prompt Bank Negara to be forced to raise interest rates in the second quarter of 2022. Once Bank Negara raises the Overnight Policy Rate (OPR), the interest rate on time deposits will also increase.
Now the interest rate for 12-month regular time deposits is 1.85% p.a., while the 12-month time deposit discount is 2.50% p.a.. If Bank Negara announces an increase in the overnight policy interest rate, the interest rate of 12-month ordinary time deposits may be adjusted to 2.05% p.a., and the 12-month time deposit discount will be adjusted to 2.75% p.a..
If you deposit 12-month fixed deposits directly now after the National Bank raises the overnight policy interest rate, you can still only enjoy the current low-interest-rate until the expiration, and you will lose about 0.25% p.a. interest rate.
It is recommended that you choose a fixed deposit of 6 to 9 months so that when the National Bank announces an interest rate hike, you can enjoy the fixed deposit interest rate immediately after the interest rate hike. If your deposit is not large, then the interest rate differential of 0.25% p.a. makes no difference.
