Best Junior Fixed Deposits in Malaysia 2026

For decades, Malaysian parents have relied on fixed deposits to safely grow their children's savings. Guaranteed returns, PIDM protection up to RM250,000, and zero market risk.

But junior FDs have a significant catch: your money is completely locked away until maturity, and withdrawing even one day early means losing all your interest. With junior savings accounts now offering similar rates (up to 2.40% p.a.) without the lockdown, junior FDs work best for specific situations: when you're saving for a distant goal, when you need the discipline of untouchable funds, or when you want to ladder multiple deposits with staggered maturity dates.

The mechanics are simple: deposit a lump sum (typically RM500 to RM1,000 minimum), choose a tenure between 3 and 12 months, and earn fixed interest until maturity. On an RM10,000 deposit placed for 12 months, you'll earn between RM205 and RM235 in guaranteed returns.

How Junior Fixed Deposits Work

Junior fixed deposits work the same way as adult FDs, just opened for kids under 18. You (the parent or guardian) put in a lump sum, pick how long to lock it away (3, 6, 9, or 12 months), and the bank pays you a fixed interest rate for that entire period.

Your money stays locked until maturity. Try to withdraw early, and you'll face penalties. When your child hits 18, the account becomes a joint account with both of you as co-owners.

The Basic Mechanism

Opening the account: Walk into a bank branch with your child's birth certificate and MyKid, plus your own MyKad or passport. Bring RM500 to RM1,000, depending on which bank and how long you're locking the money away.

Interest calculation: Banks calculate interest daily: (Principal × Annual Rate ÷ 365) × Number of days. Put in RM10,000 at 2.35% p.a., and you'll earn about 64 sen per day, which adds up to RM235 after 12 months.

Payment frequency: Some banks pay all the interest at maturity. Others credit it monthly. Either way, you get the same total amount.

Account management: You're in control until your child turns 18. After that, it's a joint account, and you both need to sign off on withdrawals.

Age Requirements

Different banks have different age rules:

• Minimum age: Anywhere from newborn to 7 years old (depends on the bank)
• Maximum age: Must be below 18 when you open it
• Watch out: Some banks cut you off earlier (like "below 12 only")

Once your kid turns 18, the FD switches to a joint account. Both of you have to approve any withdrawals after that.

What Documents You'll Need

Bring these to the bank:

• Your child's birth certificate and MyKid
• Your MyKad or passport (if you're the parent or guardian)
• The cash or transfer for your initial deposit
• Whatever account forms they give you to fill out

If you're a grandparent or someone other than the parents opening this, you might need extra paperwork like guardianship documents or proof of where you live.

Junior FD Rates: 2.05% to 2.35% p.a.

Junior FD rates in Malaysia range from 2.05% to 2.35% p.a. as of December 2025. Rates vary by bank and tenure, with longer placements typically earning higher interest.

How Junior FD Rates Compare

• Regular savings accounts: 0.25% to 0.50% p.a. (barely worth it)
• Junior savings accounts: 2.05% to 2.40% p.a. (some actually decent)
• Junior fixed deposits: 2.05% to 2.35% p.a.

Junior FDs earn far more than regular savings. Park RM10,000 in an FD and you'll get RM200 to RM235 per year. Same amount in a regular savings account? You're looking at RM25 to RM50.

But here's the thing: some junior savings accounts now pay the same rates as FDs (up to 2.40% even), and you can pull your money out whenever you want. That's why FDs aren't the no-brainer they used to be.

Returns Across Different Tenures

Based on RM10,000 deposit:

At 2.35% p.a.:

• 3 months: RM58.75
• 6 months: RM117.50
• 9 months: RM176.25
• 12 months: RM235

At 2.05% p.a.:

• 3 months: RM51.25
• 6 months: RM102.50
• 9 months: RM153.75
• 12 months: RM205

At 2.35% p.a., a RM10,000 deposit earns RM235 over 12 months. That's barely enough to cover a few months of school supplies, which is why junior FDs work best as part of a broader savings plan, not as your only strategy for your child's future.

The 0.30 percentage point rate difference translates to RM30 additional annual interest on a RM10,000 deposit. While modest in absolute terms, this adds up across multiple placements or larger sums.

Early Withdrawal Penalties

Before you lock money into a junior FD, understand this: withdraw early and you lose everything. Malaysian banks enforce strict rules that can wipe out all your interest.

In January 2019, banks implemented industry-wide penalties for early withdrawals. Most banks now forfeit all interest, regardless of how long the funds remained deposited. Withdraw even one day before maturity, and you receive only your principal back.

If interest from a previous FD was already credited to your account, banks may deduct this amount when you make an early withdrawal on a current placement.

Most FDs do not allow partial withdrawals. Accessing any portion requires closing the entire placement and forfeiting all interest. Some products permit partial withdrawals in specified increments, where interest is forfeited only on withdrawn amounts while the remaining balance continues earning at the original rate until maturity.

What This Means in Practice

Scenario 1: You deposit RM10,000 for 12 months at 2.35% p.a. After 11 months and 28 days, a medical emergency forces you to withdraw.
Result: You receive RM10,000. The 360 days of accumulated interest (approximately RM232) are forfeited completely.

Scenario 2: You deposit RM5,000 for 6 months. After 2 months, unexpected expenses require an early withdrawal.
Result: You receive RM5,000, losing approximately RM20 in accumulated interest.

Scenario 3: You have RM10,000 in a product allowing partial withdrawals. After 8 months, you need RM3,000.
Result: You lose interest on the RM3,000 withdrawn (about RM41), but your remaining RM7,000 continues earning 2.05% p.a. until maturity.

The penalty is absolute. FDs work only for money you're certain won't be needed before maturity. Keep emergency funds in accessible accounts.

Why Banks Enforce These Penalties

FD rates exceed savings rates because banks rely on having guaranteed access to your funds for the full tenure. They lend or invest based on this certainty.

Early withdrawals disrupt their planning, forcing them to recall funds from other uses or replace them at potentially higher costs. Penalties compensate for this disruption and discourage casual withdrawals.

PIDM Protection

Every deposit in licensed Malaysian banks gets automatic protection from PIDM (Perbadanan Insurans Deposit Malaysia) up to RM250,000 per kid per bank.

What's covered:

• Both conventional and Islamic FDs
• Your principal plus whatever interest you've earned (up to RM250,000 total)
• Counts separately for each child at each bank
• No fees, no paperwork - it's just automatic

If your child has multiple FDs at the same bank, adding up to more than RM250,000, only RM250,000 gets protected. Spreading money across different banks maximizes your coverage.

Bank failures are rare in Malaysia. PIDM is your safety net, and it's worked the few times banks have actually gotten into trouble.

Tax Treatment

FD interest in Malaysia is completely tax-free. Doesn't matter if it's conventional or Islamic, junior or adult, RM10 or RM10,000.

You don't declare it when filing taxes. Banks don't deduct anything from your interest payments. Unlike some investment products that get taxed, FDs are in the clear.

Auto-Renewal Features

Most banks offer auto-renewal, which automatically rolls matured FDs into new placements at current rates.

Here's what happens:

Your FD hits maturity. You don't do anything. The bank automatically rolls your principal plus interest into a brand new FD with the same tenure. This keeps going until you tell them to stop or hit their max renewal limit (usually 7 years).

The catch? Your new FD gets the current rate, not your old rate. If rates dropped, you're stuck earning less.

Benefits:

• Your money keeps working instead of sitting idle
• You don't have to remember maturity dates
• Interest compounds automatically

Drawbacks:

• Could get locked into lower rates
• Need to visit the branch to access your money at maturity
• Might trap your money longer than you wanted

Most banks let you turn auto-renewal on or off when opening the account, or change it before each maturity.

Featured Junior Fixed Deposits

Compare the key features of Malaysia's featured junior fixed deposits to find the best fit for your family's savings goals.

BSN offers a higher rate but requires your child to be at least 7 years old and doesn't allow partial withdrawals. Hong Leong's lower rate comes with more flexibility in monthly interest payments and the ability to withdraw in RM3,000 chunks if needed.

BSN Term Deposit

Rate: 2.35% p.a.
Minimum deposit: RM500 (3+ months), RM1,000 (1 month)
Age requirement: 7 years and above
Islamic option: Term Deposit-i at the same rate

BSN has the highest rate among junior FDs right now. You get all your interest in one lump sum when it matures, and they'll keep auto-renewing it for up to 7 years unless you tell them to stop.

What you get:

• Can open at any BSN branch or post office (they're everywhere)
• Withdraw early, and you lose everything - no exceptions
• Government-owned (Ministry of Finance), so some parents feel better about that
• Account opens right away

The government ownership reassures some parents, but remember, all licensed banks have the same RM250,000 PIDM protection regardless.

Hong Leong Junior Fixed Deposit

Rate: 2.05% p.a. (higher for 12+ month tenures)
Minimum deposit: RM1,000
Age requirement: Below 18 years
Islamic option: Junior Fixed Deposit-i at the same rate

Hong Leong bundles their junior FD with a savings account and debit card. They calculate interest daily but credit it monthly instead of making you wait until maturity.

What you get:

• Can withdraw in RM3,000 chunks if you need to (you lose interest on what you pull out though)
• Standing instruction to auto-create FDs when your savings hit certain amounts
• Only lose interest on the portion you withdraw, not the whole thing
• Available at Hong Leong branches

Partial withdrawal example:
Say you've got RM10,000 locked in. After 8 months, you need RM3,000 urgently. You pull it out and lose about RM41 in interest on that RM3,000. But your remaining RM7,000 keeps earning 2.05% until maturity. Withdraw the whole thing early? You lose all interest, same as any FD.

Standing instruction:
Set it up to automatically move money from your linked savings account into new FDs when your balance hits certain thresholds (RM1,000 multiples, up to RM5,000 at a time). Good for regularly transferring allowance or ang pao money into FDs without thinking about it.

Key Differences

The two featured products differ in a few key ways. BSN offers 2.35% p.a. (about RM30 more per year on RM10,000) but won't let you withdraw anything early. Hong Leong gives you 2.05% p.a. with the option to pull out RM3,000 chunks if you're desperate - though you'll forfeit interest on whatever you withdraw.

BSN requires RM500 minimum (RM1,000 for 1-month terms), and your child needs to be at least 7. Hong Leong needs RM1,000 to start, but accepts kids of any age under 18. BSN pays all interest at maturity; Hong Leong credits it monthly.

When Junior Fixed Deposits Work Well

Junior FDs make sense in specific situations. If you're saving for a specific date - school fees in January, a family trip in June, your child's 18th birthday - match your FD maturity to that date. You get guaranteed returns, and the money stays locked away until you need it.

They also work well when you've already got a solid emergency fund elsewhere. If you're not depending on this particular money for unexpected expenses, the lockdown becomes less of a risk. You're just parking funds, you know you won't need to touch.

Some parents like FDs precisely because they can't withdraw casually. The lockdown becomes a feature, not a bug. Your child sees exactly how money grows when left untouched - a practical lesson in delayed gratification.

And if you've come into a lump sum (inheritance, bonus, accumulated ang pao), an FD lets you put it to work immediately instead of building it up gradually. Plus, you know exactly what you'll get at maturity - no market risk, no surprises.

Frequently Asked Questions (FAQ)

1. Can I open multiple FDs for one child?

Yes. You can open as many FDs as you want at the same bank or spread them across different banks. Each one matures independently. Just remember: PIDM only protects up to RM250,000 per child per bank, so if you're depositing more than that, spread it across multiple banks.

2. What happens to ang pao money? Can I add it to an existing FD?

No. Once an FD is opened, the amount is locked. You can't add ang pao money to an existing FD. Your options: open a new FD with the ang pao money, or deposit it in a linked savings account (if the bank offers standing instructions to automatically create new FDs when the savings balance hits certain amounts).

3. Can I open a junior FD with money from my child's savings account?

Yes. You can transfer funds from your child's existing savings account to open an FD. Just make sure you're not withdrawing money your child might need soon, since early FD withdrawals forfeit interest.

4. What happens when my child turns 18?

The FD automatically converts to a joint account with both you and your child as co-owners. Both signatures may be required for transactions. Some banks require a branch visit to complete the conversion.

5. Do I need to report FD interest when filing taxes?

No. All FD interest in Malaysia is tax-exempt for both children and adults. You don't declare it on tax returns, and banks don't withhold tax from interest payments.

6. How does auto-renewal work?

If you do nothing at maturity, the FD automatically renews for the same tenure at the current rate (which might be higher or lower than your original rate). This continues until you actively stop it or the bank's maximum renewal period is reached (typically 7 years).

7. Can grandparents open these accounts?

Policies vary by bank. Most require parents or legal guardians. Some banks accept grandparents with proper documentation, like guardianship papers. Check directly with the bank.

8. Are promotional rates available?

Rarely. Unlike adult FDs, where banks run frequent promotions, junior FDs typically stick to standard board rates. The rates listed here are what most banks maintain year-round.

9. What if we move overseas?

Your FD continues until maturity. Keep a local address on file for bank communications. At maturity, you'll need to either return to Malaysia, arrange proper authorisation for transfers, or give someone power of attorney to handle it.

10. Can I transfer my FD to another bank for a better rate?

No. FDs can't be transferred between banks before maturity. You'd have to withdraw early (forfeiting all interest), then use those funds to open a new FD at the other bank.

11. Should I open one big FD or split it into multiple smaller ones?

Depends on what you're after. Multiple FDs with staggered maturity dates (called laddering) give you more flexibility. Say you split RM10,000 into four FDs maturing every 3 months - you're never more than 3 months away from accessing some money without penalty. But if you're saving for one specific date (like school fees in January), a single FD matched to that date keeps things simple.

Making Your Decision

Junior FDs still have a place in Malaysian family savings, but their advantage has narrowed. If you need guaranteed returns for a specific future date and you're certain you won't need the money early, they work well. But if there's any chance you'll need flexibility, a junior savings account paying up to 2.40% p.a. gives you the same returns without the lockdown penalty.

Use RinggitPlus's fixed deposit calculator to calculate exact earnings for your deposit amount and tenure.