{"id":54439,"date":"2022-12-26T08:34:38","date_gmt":"2022-12-26T00:34:38","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=54439"},"modified":"2023-01-10T17:21:01","modified_gmt":"2023-01-10T09:21:01","slug":"maximise-term-deposits-maxcash","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/maximise-term-deposits-maxcash","title":{"rendered":"Is It Time To Maximise Your Term Deposits?"},"content":{"rendered":"

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In Islamic Banking, the equivalent of the Fixed Deposit (FD) is known as the Term Deposit. For most people, a term deposit account has always been a safe place to keep your money and receive guaranteed returns as they have fixed profit rates which tell you how much money you will earn at the end of a fixed number of months or years.<\/p>\n

While the returns are usually not that impressive, it is affected by the overnight policy rate (OPR) which is increasing. The OPR<\/a> has been raised by 100 basis points (bps) in 2022 to 2.75% and more increases<\/a> are expected next year.<\/p>\n

For most people, the increase in OPR would mean higher profit in terms of financing (housing, cars, etc,). However, there is a positive outcome for those who invested in term deposits as higher OPR rates mean higher returns from your term deposits.<\/p>\n

So, is this a good time to move some of your investments into term deposits?<\/p>\n

Before you do, let\u2019s start by understanding why term deposits are great for certain situations and what you can do to get more from them.<\/p>\n

<\/span>What is the right way to use term deposits?<\/span><\/h2>\n

In general, it\u2019s not advisable to use term deposits for long-term placements or investment accounts. The reason is that your money compounds at a lower fixed rate within a 3-to-5-year period (or longer), compared to investing in a diversified portfolio.<\/p>\n

As such, it doesn\u2019t make a lot of sense to put all your money in term deposits for long-term investments if you want to get the best returns for the money.<\/p>\n

However, a term deposit account makes a lot of sense if you\u2019re focused on near-term\/short-term placements. This could be any of the ones below:<\/p>\n