Fixed Deposit Account

A fixed deposit (FD) account is a form of savings kept with a banking institution for a stated period. The rate of interest for a fixed deposit account is generally higher than a normal savings account. Most banking institutions in Malaysia offer FD accounts of various tenures to cater for the needs of consumers.

Creation of FD account is done over the counter and certificate will be issued to customer. These certificate will help you keep records of all deposits and withdrawals that you’ve made to calculate the current balance. Computation of interest for FD account shall be based on the number of days within the term of the deposit. The payment of interest on premature withdrawals of FD account before maturity shall be subjected to the terms and conditions define by banking institutions.

It is also very important to know that the longer you fix for, the more you are risking the fact that an unpredictable future means this could be a bad choice. If interest rates were to increase rapidly, you would’ve lost the flexibility to change and switch to a better FD account without losing the interest that you had earned so far. That is one of the reasons why banks can give you higher interest rates than most savings accounts because you are taking this ‘time risk.’

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