With the National Bank announcing an increase in the Overnight Policy Rate (OPR), banks in the country have increased their lending rates and time deposit rates. If you are a time deposit depositor, then you are also entitled to a higher time deposit rate.
Before the rate hike, the interest rates on time deposits for 1 month, 3 months, 6 months and 12 months were 1.50%p.a., 1.70%p.a., 1.80%p.a. and 1.85%p.a. respectively. After the rate increase, you can enjoy 1.75%p.a., 1.95%p.a., 2.05%p.a. and 2.10%p.a.
Here is an example of how much more interest you can earn in an average of 1 month after the 0.25% interest rate hike, using a deposit of RM10,000 and a deposit of 1 month.
Before the interest rate hike, if you deposit RM10,000, you will get RM12.50 for 1 month, after the interest rate hike, you will get RM14.58 for 1 month, which means you will get an additional RM2.08 interest. If you deposit RM1,000, you will earn an additional RM0.20 per month after the interest rate increase.
If you want to enjoy a higher interest rate on your time deposit, then you can choose to deposit with the Promotional Fixed Deposit. The highest interest rate currently available is approximately 2.80%p.a.
As the National Bank is expected to raise interest rates twice this year, it is advisable to choose a shorter term deposit first so that you can enjoy a higher interest rate on your time deposit as soon as the National Bank raises interest rates.
