Personal Finance Term
FD
Fixed Deposit
A savings instrument where you lock in a sum with a bank for a fixed tenure (1–60 months) in exchange for a guaranteed interest rate higher than a regular savings account.
FD rates in Malaysia are influenced by BNM's OPR. When OPR rises, FD rates typically follow within weeks. Conventional FDs are protected by PIDM (Perbadanan Insurans Deposit Malaysia) up to RM250,000 per depositor per bank. Islamic FDs work on a Mudarabah or Wakalah principle — the return is declared, not contractually guaranteed, though in practice banks have always paid the declared rate.
FD tenure ranges from 1 to 60 months. Promotional rates (usually 1–3 months) are often higher than standard rates. Breaking an FD early typically results in forfeiture of some or all interest earned.