If you find yourself asking whether you should save or invest, the answer is definitely both. How to achieve that depends on your goals – are they long-term or short-term?
Saving is putting money aside bit by bit, to make a lump sum. Most of the time, people save for a goal, like wedding fund, down payment on a house, or even a vacation. Mostly these savings are liquid enough to be able to use on short notice.
Investing, on the other hand, is taking some of our money and making it grow by buying things that might increase in value, like stocks, property or shares in a fund over time. This is important to safe guard our money from the rising inflation.
The perfect instrument to achieve both saving and investing is a fixed or term deposit, where your fund is highly liquid and yet, still able to earn returns over time.
However, the down side of the usual deposit products is that the high profit rate is only applicable for a short period, such as six months to a year.
Being able to lock in the highest profit rate for a longer period definitely eliminates a lot of trouble of monitoring the latest promotion from various banks, and you’ll probably end up with more money in your pocket!
No chasing
One of the most taxing parts of winning the cash deposit game is to constantly be on the lookout for the highest rates of return offered by various banks.
Most of the promotional rates offered are applicable for up to 12 months of deposits. The rates will revert back to the normal rates, which are lower after the campaign is done. In order to constantly get the most of out of your savings, you will need to always search for the high rates and transfer your money to and from these accounts.
This will definitely take up a lot of your time and effort.
The Bank Simpanan Nasional’s (BSN) latest fixed deposit promotion, with the rate of 4.50%, can be locked for five years. You can rest assure that your money is growing in an accelerated pace of 4.50% for five years without a worry.
Higher returns
If you are not alert on the latest promotional rates offered, chances are you will leave your money in a fixed deposit account way over the promotional period. This means less profit on your money.
Even if you are alert, and constantly transfer your money to the next best deposit account, your effort does not necessarily translate to more money. Here’s why:
Deposit amount: RM20,000
Deposit period: 60 months/5 years
| FD/TD Plans | Months | Promotional tenure (months) | Effective Rates (p.a.%) | Returns (RM) | Accumulated placement (RM)* |
|---|---|---|---|---|---|
| N/A | 0 | - | - | - | 20,000.00 |
| Bank A | 1 to 3 | 3 | 4.5 | 225.00 | 20,225.00 |
| Bank B | 4 to 12 | 9 | 4 | 606.75 | 20,831.75 |
| Bank C | 13 to 15 | 3 | 5 | 260.40 | 21,092.15 |
| Bank D | 16 to 28 | 13 | 4.2 | 959.69 | 22,051.84 |
| Bank E | 29 to 40 | 12 | 4 | 882.07 | 22,933.91 |
| Bank F | 41 to 46 | 6 | 3.95 | 452.94 | 23,386.85 |
| Bank G | 47 to 50 | 4 | 4 | 311.82 | 23,698.67 |
| Bank H | 51 to 60 | 10 | 3.95 | 780.08 | 24,478.75 |
- Total initial savings: RM20,000
- Accumulated earnings: RM4,478.75
- Actual rate of earnings (p.a.): 4.48%
- Actual rate of earnings (5 years): 22.39%
From the example above, you’ll manage to rake up a RM4,478.76 accumulated profit through eight plans in the period of five years.
What if we told you, you can earn a much bigger profit without doing much? Here’s how the BSN latest deposit promotion can help you achieve that:
| FD/TD Plans | Months | Promotional tenure (months) | Effective Rates (p.a.%) | Returns (RM) | Accumulated placement (RM)* |
|---|---|---|---|---|---|
| N/A | 0 | - | - | - | 20,000.00 |
| Bank A | 1 to 60 | 60 | 4.5 | 4,500.00 | 24,500.00 |
- Total initial savings: RM20,000
- Accumulated earnings: RM4,500
- Actual rate of earnings (p.a.): 4.50%
- Actual rate of earnings (5 years): 22.50%
You can achieve similar earnings without having to lift a finger for five years. No need to scout for promotions and less work running between banks to shift your money about!
Guaranteed returns
Even though BSN is not a member of PIDM its Deposit products are guaranteed by the Malaysian Government.
However, missing one promotional period in your chasing strategy will affect your returns significantly. And this loss of opportunity will not be covered anywhere. Depositors who are not alert and missed one of the promotional rates offered will have to suffer their loss in silence.
The beauty of having a high return rate over a long deposit period is, you don’t have to worry about opportunity cost like this. All you need to do is to deposit minimum of RM5,000 into a BSN Fixed Deposit or Commodity Mudarabah Deposit-i,(CMD-i) and you will be able to enjoy growing your money without a worry.
Other benefits
Managing too many savings accounts can be a pain. Sometimes you are forced to open a savings or a current account when you apply for loans or even fixed deposit accounts. BSN does not bundle the fixed deposit account with a savings account.
The promotional rate of 4.50% for five years is applicable for both individual and corporate depositors.
So, what are you waiting for? Seal this sweet deal now at the nearest BSN branch. Offers available from June 1 to September 30, 2015.
