Saturday, January 31, 2009

Latest Fixed Deposit (FD) Rate in Malaysia – Which bank should I choose?

A very common question is that which bank I should put my money for fixed deposit in Malaysia. The fact is that for whichever banks that you put your money in the fixed deposit, it is almost the same. Therefore, I would say that the bank that most convenient to you, you should choose that bank to put your money in the fixed deposit.

To get to latest updated fixed deposit (FD) rate in bank, you can either walk-in to the bank directly or you go directly to their official bank website. I don’t put the direct fixed deposit rate links here because they always change the links from time to time (no idea why they do this - *sign*). You can click through their website to get the most updated latest FD rate.

[Updated:31 Jan 2009] 
Summary of fixed deposit rates for each bank for 12 Months FD Rate % :

Local Banks
Affin Bank - 2.50%
Alliance Bank - 3.00%
AmBank - 3.00%
CIMB Bank - 2.60%
EON Bank - 3.00%
Hong Leong Bank - 3.00%
Maybank - 3.00%
Public Bank - 3.00%
RHB Bank - 2.60%

Foreign Bank
CitiBank - 3.00%
HSBC Bank - 3.00%
OCBC Bank - 3.00%
Standard Chartered Bank -3.00%
UOB - 3.00%

[Updated: 03 Feb 2013] Sorry, I don't think the list above is no longer up to date. For latest fixed deposit and especially if you would like to see the trend, you can refer to this link here.

Although most of banks offer almost the same interest rate for fixed deposit, there are few exceptions which are Affin Bank, CIMB Bank and RHB Bank offer less than 3.0%. Apparently these are all local banks. I personally for local bank, I prefer Public Bank and for Foreign Bank, I prefer HSBC Bank. These are the 2 most effective banks in Malaysia in my opinion.

Btw, if your personal inflation rate is higher than 3%, would you still want to put your money in FD? Nope, you don't. For your emergency cash, then probably it is a good idea to put into FD. Stocks or unit trust is probably the thing that we should invest during this bad economy situation.

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Thursday, January 29, 2009

Maintaining EPF 11% contribution is not a Must!

As you probably have already known starting from Jan 2009, EPF contribution by default will be 8% unless you fill-up the EPF Form 17A (i.e. election to contribute in excess of the statutory rate). A lot of speculation around saying that you will end up pay more tax to government but this is not entire true! This is my recent conversation with a friend who thinks I’m stupid…

X Friend: I have changed to maintain 11% on my EPF contribution. Have you changed it yet?

Me: Hmm… no. I don’t.

X Friend: Why are you so stupid? If you don’t change it, it means you pay more taxes to government. The government is really X#$%^X?@ (as usual how people like to complain the government).

Me: The maximum EPF amount that we can deduct from our income is RM 6000 together with the life insurance. My EPF and life insurance have already exceeded way more than RM 6000, so I won’t pay more taxes whether I contribute 11% or 8%. I believe yours most likely will also exceed RM 6000 since you also buy life insurance if I'm not mistaken.

X Friend: Are you sure or not? As what I have read, they don’t mention about this RM 6000 limitation. They even said the higher you earn, the more taxes you pay?

Me: Yes, they don’t. People don’t like to tell a complete story and most of the time we have to figure out by ourselves. Furthermore the main purpose of those stories is to shoot the government and not to educate us. It seems like quite successful from your respond. Hahah… :D In fact the higher you earn, it may not affect you.

We have to analyze by our own whether we should go for 11% or 8% not. EPF provides the options to us to make our own choice. In fact if you want to contribute more than 11% (I haven’t really verified this personally but I believe it is true), it is still okay. For example, if you want to maximize your EPF deduction to RM 6000 in order to pay minimum taxes, you can play around with the % contribution (This is one of the tax saving tips in my previous post too).

X Friend: Okay, I will go back and check whether I have already exceeded RM 6000.

Me: Also if you think EPF is a good investment, then let’s go for it to contribute 11% or more but you can’t say that you pay less taxes especially your EPF deduction + Life Insurance have exceeded RM 6000.
[Updated on 30 Jan 2009]
Only 22% of Malaysian have chosen to maintain their contribution rate at 11% as at Dec 31. Source: Berita Harian

In conclusion, don’t follow what majority think is correct and make sure you know exactly what you’re doing. Changing your contribution to 11% is NOT a MUST and make sure also you’re changing for the RIGHT PURPOSE. We shouldn’t ever invest or make decision based on the wrong purpose that will be a very dangerous things to do. So, should you change your contribution to 11%? Make your own decision!

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Thursday, January 01, 2009

2008 Accomplishments and what is next?

It is time to look at my 2008 accomplishments. Sometimes we did something good and sometimes we screwed up. Let’s see how I had have I done and what I have screwed in 2008:

What I Did Well (I Think So)

  • I still maintain my yearly income raise at 7% rate or higher. In fact, it is a higher than that. This is my financial annual goal in order retire rich at 40 years old. If I’m staying at 7% or higher rate, the chances that I get retire rich at 40 years old is higher.
  • I was getting promoted in management path in my company. When you’re a single contributor, whatever you contribute reflect directly to your accomplishment. This is easy as everything is within your control. Therefore, I’m getting exceed expectation most of the time when I was still in single contributor. Now is another story as my accomplishment now is the team accomplishments and every manager is used to be a top performer when they was in single contributor. Therefore, the competition within the management is also getting tough.
  • I have been consistently staying out of comfort zone in 2007 and 2008. This is really something good news. I used to have a life stay in a comfort zone 2 years ago, before 2007. So now I’m in good track, staying out from comfort zone and consistently increase my learning curve and make sure it won’t slow down and keep up the momentum.
  • I managed to convince my parents to move from their hometown to stay closer with me. We used to meet once a year and sometimes once in every 2 years. Now I’m seeing them every weekend. I can tell, they love the new place that I bought for them. Now the relationship with parents is getting closer again like it used to be. This takes 3 years for them to completely move here.

What I Screwed Up (Did I?)

  • I still failed to build up my second income. In blogging, I earn averagely USD 100 in every 2-3 months. It is a way far from my main income. I started my 1:1 tuition business in 2006 and I didn’t continue it in until now. The thing is I can’t jeopardize my main income with my second income. Building a second income is still in second priority as for right now. Unless I don't get promoted last year, then I probably can still have more time and resources focusing on the second income. But at this point in time, I'm still struggling with my new role.
  • Investment return is also not very impressive and less than 8%. 8% in my goal again for me to retire rich at 40 years old It seems like investing in Wawasan 2020 and ASN have the highest investment return among all other investments such as mutual fund, stocks and etc. These are the government mutual funds in Malaysia for those of you who may not aware of this.
  • I have health problems which is the saddest thing. I did my medical check-up recently and found 3 problems that I do not meet the healthy guideline standard. First problem is my high cholesterol level. Second problem is my oily liver. The third problem is my high uric acid level. According to the doctors, all these happen because I really know how to enjoy and appreciate seafood. Guess what is my 2009 resolution?

What is Next? (2009 Resolution)

  • To be performed in my new role in management path. As I said, it is going to be very challenging as your performance is no longer within your control. It is your team performance and now and the competition among managers is also getting tough. Also retain my sub-ordinates is also one of the biggest challenges that I faced in my current team.
  • To be healthy again. I'm going to exercise at least once a week. I have been consistently exercise (play badminton weekly) for 3 months. I think I have start losing some weights which is a good sign. :) Exercise is the most effective way to burn your cholesterol in case you guys do not aware. Also I will try to eat as much as vegetable as possible and reduce the meat consumption. If I really want to eat meat, fish is the preferred option. Also, now I'm having a habit to drink Chinese Tea and Oats which I believe is the healthy one. Please correct me if I'm wrong or any ideas for me to stay healthy. :)
  • To improve the quality of my blog content. I have 2 blogs. This blogs is a little bit messy as it contains almost everything of my life journey toward financial freedom. Not 100% of the content belongs to personal finance. I wonder if I should make any major changes to it. The second blog that I have is more specific on reviewing any useful freeware. Anyway, sometimes when I look at the old post, I find that it is very funny. Therefore, I decided to take some time to review them again see if any changes are required.
Okay, these 3 high-level goals have been set in 2009 for me. What about you? Happy New Year to everyone of you!

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