Bank Negara will hold a monetary policy meeting (MPC) on September 8 and will announce whether it will raise interest rates at the end of the meeting. The general expectation is that the Bank will raise interest rates by 25 to 50 basis points, with 25 basis points more likely.
The increase in the Overnight Policy Rate (OPR), as it is commonly known, will lead to an increase in interest rates for various financial products in the country, with interest rates on time deposits being directly related to the OPR.
The current interest rate for 1-month time deposits is between 1.95% and 2.00% p.a., while the interest rate for 3-months is 2.20%, 6-months 2.30% and 12-months 2.35%. If the National Bank raises interest rates by 25 basis points or 0.25%, all these time deposit rates will increase by 0.25%.
In terms of the Promotional Fixed Deposit (PFD) offer, Hong Leong Bank is offering a maximum of 3.30% p.a. on time deposits. However, this offer is subject to a 24-month deposit period. AmBank also offers a 12-month 3.20% p.a. time deposit.
Maybank also offers a fixed deposit of up to 3.00% p.a. for 12 months. CIMB is also offering up to 2.85% p.a. on time deposits.
If the National Bank announces an interest rate increase on 8 September, the interest rate on the time deposit offer will certainly increase as well. The highest time deposit offer rate is now 3.30% and a time deposit offer of 3.50% p.a. or higher cannot be ruled out after the rate increase.
Therefore, those who are thinking of placing a time deposit are advised here to be patient and wait a little longer.
