If you’ve been weighing the pros and cons of establishing a fixed deposit (FD) account in today’s day and age, it’s in your best interests to take a closer look at how these accounts function and how they can positively impact your personal financial situation, especially if you’ve been adhering to traditional savings and checking accounts for some time now.
Thus, if you happen to be looking for the best FD available in Malaysia, for instance, feel free to use this brief article as an introductory guide to finding the perfect account with the ideal banking institution.
What Is an FD Account?
If you’ve built up a comfortable nest egg over the past several years but aren’t quite ready to make a large purchase such as a house or new car, your friends and family might advise you to enter the stock market in order to put your spare money to work for you.
But, as we all know, the stock market and commodities sector comes with a plethora of risks and potential jeopardies, particularly when taking into account the unremitting political unrest, global conflicts, natural disasters, and “boom or bust” investments found throughout the world. This is why prudent people tend to err on the side of caution by periodically establishing FD accounts to grow and protect their liquid cash.
In its simplest sense, a fixed deposit account is essentially a financial instrument that allows you to deposit a set amount of money into a protected account for a specified period of time. During your pre-established time period, which can range anywhere from one to 60 months, your money will grow at a higher rate than a traditional savings or checking account, effectively allowing you to budget and plan your savings approach throughout the tenure of your FD.
Insulating Your Spare Cash
Although you won’t have a chance to “win big” in the stock market, it’s important to note that a fixed deposit account will help you safeguard your extra funds and make a handsome return along the way:
- Secure, risk-averse savings option
- Guaranteed interest yields
- Protected from the vicissitudes and oscillations of global markets
- Available in fixed terms ranging from one to 60 months
- A higher interest rate than traditional savings accounts, up to 3.1% per annum
Increased Flexibility
If you partner with a reputable banking institution and establish a modernised FD account, you’ll be able to enjoy a myriad of customisable advantages during your account’s tenure:
- Deposit insurance protection
- Robust online banking platform to track and manage your FD account
- Downloadable statements and account balances
- Flexible disbursement options available monthly, annually, or during maturity
- Easi-FD Access for deposits of at least RM5,000, which allows you to withdraw your funds easily according to your needs
Easy-to-Understand Requirements
Due to the fact that FD accounts are widely referred to as the safest savings option available nowadays, renowned banking institutions are able to provide limited barriers to entry and an intuitive deposit process:
- Minimum of RM1,000 for your initial deposit
- Must be at least 18 years old
- Required to have a valid identity card or passport
- Available to Malaysians, Malaysian PRs, non-residents, and corporations