Bank Negara may raise interest rates by only 0.25% in the coming year, so if you see a satisfactory term deposit offer now, you can start deploying and depositing it to avoid missing the best deposit period.
According to economists’ forecasts, Bank Negara will raise interest rates only once more this year at most, and the overnight policy rate is expected to range between 2.75% and 3.00%. This also means that there will not be much change in interest rates for time deposits.
Our Consumer Price Index (CPI) for December was 3.80%, or a 6-month low, and it was the first time since July that the CPI was below 4%. Our CPI for the full year 2022 is 3.30%, which is higher than the 2.50% in 2021. However, our CPI should have peaked in August 2022 and is expected to continue slowing in the following months.
As our CPI continues to slow, the pressure on the National Bank to raise interest rates has been eased. The general expectation is that the National Bank will raise interest rates once more in March this year, after which they will remain unchanged until the end of the year.
Currently, there are several banks in the country that are offering fixed deposits at more than 4%, namely, Hong Leong Bank, Banco Popular, Banco Popular, Bank Muamalat, Agro Bank, RHB, MBSB, AmBank and Affinbank. if you are already quite satisfied with this rate, you can start deploying and depositing.
With a deposit of RM10,000 and 4% interest rate, you can earn RM400 interest for 12 months of deposit.