The new Mudarabah Investment Account (Mudarabah IA) by Maybank Islamic is the latest innovative Islamic product iteration to meet the differentiated needs of the sophisticated customer. It combines a regular deposit account with an investment product to provide you potentially higher returns than the regular term deposit accounts and it also enables customers free access to the cash/funds any time without additional charges.
Mudarabah IA comprises of two categories: the Daily Fund-i (equivalent to Current & Savings Account) and the Term Fund-i (equivalent to Term Deposit). They are differentiated by the features of the products under the funds.
With Mudarabah IA, you can transform the way you save and invest. Here are 5 compelling reasons why the new Mudarabah IA is the best product for your investments.
1. Potentially higher returns
One of the reasons why people prefer to put their money in deposit accounts is because it offers little to no risk, with a guaranteed return. However, sometimes the guaranteed return is barely enough to help you brace the rising tide of inflation.
What if you need the features of a Current or Savings Account (CASA) but you’re not loving the (almost) non-existent profit rate?
When it comes to the Mudarabah IA, you may get potentially higher returns of up to 4% for Term Fund-i or in the range of 1% to 3% for Daily Fund-i. Sounds great?
Both Daily Fund-i and Term Fund-i offer a potentially higher returns, which are subject to the performance of the funds.
The new and improved Mudarabah IA affords more opportunities to grow your money. It is possible to earn more than 3.8% of profit a year if the funds perform well.
2. Flexible maturity period
The maturity period is the next major factor for every investor. If you can’t maintain your funds throughout the period that you sign up for, you may compromise on your profit/returns. This can be a drawback to the investors, especially those who keep their emergency fund in such accounts. You will never know when an impending disaster will strike and you may need the money urgently. And if you withdraw, even partially, before the maturity, you will most definitely lose some if not all of the profit.
With the Mudarabah IA, you can rest easy because profits are calculated based on the number of invested days.
3. Additional ways to earn profit
The Mudarabah IA’s Daily Fund-i and Term Fund-i allow you to unlimited withdrawals and also offer chequing facilities. So you can flex these perks and still earn profit on your placements!
The profit for Mudarabah IA is not restricted by the balance band. Whatever amount you have in your account will be earning profit as the profit is paid to all balances based on the number of invested days. This gives you even better reason to choose this product. On top of that, any withdrawal on your Term Fund-i will not be charged additional fees.
4. Profit payment frequency
To ensure that you do not lose out on your profit, the new Mudarabah IA – both Daily Fund-i and Term Fund-i pay the profit monthly, regardless of your tenure. Twelve or 60 months, you will see your profit being credited into your account every month. Now, isn’t that a great 4th reason?
5. Improved overall returns
The Mudarabah IA allows investors to improve the overall returns of a diversified portfolio to other financial instruments without excessive risk.
Why stay at 3.4%p.a to 3.8%p.a when you can get more?
The flexibility it allows without additional charges makes the Mudarabah IA an attractive investment account. If you are looking for low risk investment which is not easily accessible to retail investors, without undertaking more risk, this will be perfect.
With the low initial placement of RM 1,000, everyone could easily sign-up for the account.
Nonetheless, the risks that you can potentially take on is ‘credit’ risk of the bank holding the investment, and not being insured by Perbadanan Insurans Deposit Malaysia (PIDM) and it is not principal guaranteed.
If you are looking for higher return but low risk investments and yet still want to enjoy the same peace of mind as investing in regular term deposit, this may just be the final compelling reason for your financial portfolio.