Macsta

Hi Pat, from my understanding the reason why you open two FD is that it gives access to the funds you can withdraw for any allowed purchases without you having to lose any interest on the whole deposited amount.

So for example my initial FD was for 150,000 RM but I was allowed to withdraw 50,000 RM for approved purchases. By opening two FDs it means I can withdraw the 50,000 RM at anytime but only potentially lose early closure penalty costs on the 50,000 RM.

The 100,000 FD continues on the term I chose without any early withdrawal penalty risk. If it had opened a singular 150,000 FD and then wanted to withdraw 50,000 RM before it reached maturity I would potential lose interest on the full 150,000 FD not just on 50,000 RM.

You can still lose on early termination redemption on the 50,000 FD if you only withdraw 20,000 RM but better to lose it on 30,000 RM than 130,000 RM.

Your second point, my understanding is the bank cannot reject your request. However closing an FD early means you will be subject to early termination charges. It relates to the first point. If you have one FD then the total amount invested is subject to interest penalty if you withdraw early. So in your example on a 60 month FD if you withdraw after 24 months then you will pay a rebate penalty as you did not complete the remaining 36 months.

By the way splitting the FDs is no hassle at all.

Whichever bank you choose you have to read the FD terms and conditions for full knowledge of any potential early withdrawal charges.

.

Pat in europe

Thanks. Now the reason of splitting into 2 FD is clear to me.

ChrisC1955

Hi all,
Forgive me if I've missed the information here - 17 pages of posts is a lot to get through. I'm working in Thailand but my LTSV Pass for Malaysia is due through in the next couple of weeks. I'm looking to open up an FD account by transfer from my Thai account which was set up for my salary. It's also likely that I'll be transferring a large sum from the UK from property sale.
Are the attractive rates mentioned in some of the posts above linked solely to MM2H or are they available to any depositor? I decided against MM2H because as I understand it you're locked into 1 bank for 10 years.
Any advice on my best course of action?

RedApe

My understanding is that you need to have some sort of visa or long-term pass to establish a bank account in Malaysia. That can be an MM2H, an Employment Pass, etc. In some cases, where there is a clear prospective likelihood of receiving a VISA then one can convince an account manager to set up the account. For example, you technically need to have a letter of "provisional" acceptance to the MM2H (prior to receiving the pass) to establish your FD. So it sounds as if you would not be able to do it unless you were willing to apply for an MM2H. Another case might be if you had a letter from your employer that you had an Employment Pass pending.

BTW If you do not receive the MM2H pass/visa the government will let the bank know and the account will be cancelled...big hassle.

Alternative #1: If the TERM of the account is your major issue there is nothing to stop you leaving the MM2H program early and applying to withdraw your account.

There is a cost...you have paid up your visa for the full 10 years (or is it the term of the passport? And then transfer and pay again? I forget?).

Alternative #2: I assume 1955 is your Birthdate...in case of which you could apply for the Sarawak M2H (assuming you are a single applicant and over 50 years of age and can find a local sponsor)-and place a MYR 100K FD (vs. MYR150K on the Peninsula). The term on the Sarawak M2H visa (and hence the Fixed Deposit) is 5 Years. I presume that any other FD you would then place would be independent of your FD for Sarawak M2H and could be withdrawn at whatever term you opt for.

BTW...there are some qualified withdrawals for either the MM2H or the Sarawak M2H...which allows one to draw the FD down. Health costs, childs education, property purchase, and possibly a car purchase (or is that done for now on the peninsula...know the tax break is gone?). If you pull money out for any of the above reasons you can drop the Peninsular MM2H FD balance down to MYR 50K (MYR40 in Sarawak).


As pointed out above, many folks establish two accounts for their MM2H/SM2H Fixed Deposit. The first is the one to fulfill the FD requirement, the second to siphon the interest off of that as it accrues. It's essentially a checking or savings account. Without this the FD accrues and in 10 years may be nearly 50% larger than what one put in.

ChrisC1955

Thank you RedApe. I'm expecting my Long Term Social Visit Pass in a couple of weeks and I thought that it would be sufficient to open an bank account. Am i mistaken?

I am married to a Malaysian citizen but we do not want to go down the MM2H route for the reason of having to tie up a large sum of money potentially for years.

Macsta

Hi Chris,

You state you have an LTSV imminent, then once received you can open a bank account with this visa.

To answer your question, the rate I received from HSBC of 4.15% for a 5 year FD is not exclusive to my MM2H approval. I am unsure of the market to give you the most attractive FD rate out there but a few visits to the banks will get you sorted or maybe other forum members will advise.

You are correct the MM2H regulations now lock you in to the bank that you initially place your MM2H FD but this does not preclude you from opening other FD at other banks. It just means the original FD deposit (minus any allowed withdrawals within the rules) has to remain with the bank you nominated as the MM2H "home bank" for the duration of the MM2H visa.

Good luck.

ChrisC1955

Many thanks Macsta!

eCdD

Yes, that is a very important thing. MM2H brings you be no means better FD offers, it usually needs a lot of negotiation skills (or just a friendly and competent RM if you are preferred/priority) to get the same rates than all others.

Please note that all FD rates crashed down this week because Bank Negara cutted down the overnight lending rate. So everything above 4% is a great thing now. Bangkok Bank by the way is known for very good interest rates, maybe helpful for you. By the way, as you are married to a Malaysian citizen you have a much better option than FD: Amanah Saham. Even if your wife is Non-Bumi she is qualified for some products. Always try to sign up for as much as possible. If your wife is Bumi than you have hit the jackpot, you will be funded by Malaysian government for the rest of your life

ChrisC1955

eCdD Thanks for that information. I shall look into the Amanah Saham account. As to the lifetime funding, I think that might change in the next few years!!

SushiFan

They charge the number of years for which they give you the MM2H visa. Example: if your passport is valid for another seven years when your MM2H is approved you will receive a 7 year MM2H visa in your passport and will be charged for 7 years. Once your passport has expired and you received a new one from your home country you can receive the remaining three years of your MM2H and will be charged for those three years.

StillSearching

Yes, to any depositor.
Bank Rakyat 4.6% for 5 years. It had the highest rate so far at the time when we've been shopping for it two weeks ago.
Rates are changing every day. You can go to other banks and compare their rates.
rakyat.com.my
Their on-line interface is very good. We like their customer service too.

ChrisC1955

eCdD

I also have a 5 year FD from Bank Rakyat that makes me very happy because interest is paid every month!

But forget everything that is older than yesterday. The interest rates have changed after being stable a few years.

Bank Rakyats 4.25% for 24 months is the best on the market right now.

eCdD

Well, our Malaysian friends feel themselves like little Kataris or Kuwaitis, the government has to give them a little bit guaranteed happiness in form of the Amanah Saham. I don´t see a change in the next years.

StillSearching

It is funny that paid to you by the bank Rakyat interest is called 'gift' in your bank statement. By the Islamic law, they are prohibited to make a profit from your money. So, they found a way around it: they call it "gift".