PETALING JAYA: Fixed deposit (FD) is low risk and great to invest in, but is it a less attractive investment avenue now due to the lower interest rate environment? Following the cut in Bank Negara Malaysia’s Overnight Policy Rate (OPR) to 3% last month, banks have lowered their base rates and base lending rates, translating into lower cost of borrowing, but also a decrease in fixed deposit and saving account interest rates. HLIB Research analyst Chan Jit Hoong opined that FD is not necessarily less attractive now given the lack of good alternatives in the market. “For example, equities are going through a rough patch now, so generating capital returns would be rather difficult. For those who want assurance in returns, they would still stick with FD. That said, for the take-up rate of FD, we are already observing some tapering effect from the recent Bank Negara Malaysia (BNM) statistics – probably due to high base effect,” he told SunBiz. For example, RHB Bank Bhd has revised its base rate and base lending rate downwards by 20 basis points (bps) effective May 13, 2019, to 3.80% per annum from 4.00% previously, and to 6.75% per annum from 6.95%, respectively. RHB… Read full this story
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