Best Senior Fixed Deposits in Malaysia 2026

Malaysian retirees face rising living costs while their savings earn minimal returns in regular accounts. Fixed deposits have always been the default savings option, but most seniors don't realise that banks offer special rates starting from age 50, typically 0.25% to 0.75% higher than regular FDs. These senior fixed deposits offer rates of 2.05% to 2.80% per annum with PIDM protection up to RM250,000 per bank.

Differences Between Senior Fixed Deposit and Regular Fixed Deposit

Senior fixed deposits pay 0.25% to 0.75% more than regular FDs. CIMB, Public Bank, Hong Leong Bank, and BSN reserve these higher rates for customers aged 50, 55, or 60 and above.

Place RM10,000 in a 12-month senior FD at 2.80% p.a. and collect RM10,280 after a year. The same RM10,000 in a regular FD at 2.10% p.a. gives you RM10,210. That RM70 difference scales to RM1,400 extra per year on RM200,000.

Malaysian retirees use senior FDs to top up their pension, EPF Account 2 withdrawals, or KWSP monthly payments. PIDM guarantees returns up to RM250,000 per bank - safer than keeping cash at home or buying stocks you don't understand.

Banking Terms You Need to Know

Understanding these terms helps you avoid surprises when opening your senior FD. Banks use specific language that determines how much you earn and when you access your money.

Board Rates and Special Rates for Seniors

The board rate is the standard interest rate a bank offers to all customers for a specific deposit period. Many banks offer a better deal for older customers, where senior rates are calculated by adding an extra 0.25% to 0.75% p.a. on top of the standard amount. For example, if the standard offer is 2.10% p.a., a senior citizen might receive between 2.35% p.a. and 2.85% p.a. instead.

Using Fresh Funds for Better Offers

Banks often reserve their best interest rates for money brought into the bank from an outside source, known as fresh funds. This includes cash deposits or transfers from other banks like Maybank or CIMB. Money already sitting in your existing savings account at the same bank does not count. Banks want to attract new deposits rather than have you move money around between your own internal accounts.

Managing Your Auto-Renewal

When your deposit period ends, the bank can automatically reinvest your original deposit plus the interest earned into a new FD with the same duration. This is known as auto-renewal. If you started with RM50,000 and earned RM1,400 in interest, your new deposit would be RM51,400. It is important to remember that the interest rate for the new period may be higher or lower than your original one. You can choose to disable this feature when you first open the account or at any time before it reaches the end of its term.

How Pro-Rated Interest and Penalties Work

If you need to withdraw your money before the agreed date, the bank will pay interest calculated only for the actual days the money was kept in the account. This is called pro-rated interest. For instance, if you placed RM50,000 for 12 months at 3.00% p.a. but withdrew it at month 8, the bank first calculates the partial interest of RM1,000. Most banks then apply a 50% penalty for early withdrawal, leaving you with RM500 in interest and a total payout of RM50,500.

Tracking Your Maturity Date and Placement Period

The placement period, also known as the tenure, is the exact length of time your money is locked in the account. A 6-month tenure means a 6-month placement. The day this term ends is called the maturity date. If you place your funds on 17 December 2024 for a 12-month term, your maturity date will be 17 December 2025, which is when you can collect your full deposit and interest.

Finding the Effective Interest Rate (EIR)

The EIR represents the true profit you earn, especially for products with changing rates or accounts that require you to also hold a savings account. While a product might advertise a high rate of 3.50% p.a. for a short time, the EIR might only be 2.60% p.a. once you average the rates across the entire duration. Always look for the EIR to understand the actual return on your investment.

Age Requirements Vary by Bank

Public Bank, Alliance Bank, and CIMB start at 50 years old. Hong Leong Bank, AmBank, and RHB require you to be 55 years old. HSBC and Standard Chartered set the bar at 60 years old.

Bring your MyKad when opening the account. The bank checks your birthdate against their age requirement. At 52, you qualify for Public Bank but not for Maybank. At 57, you qualify at most banks in Malaysia.

Joint accounts work differently at each bank. At Public Bank, if the main account holder is 52 and the second holder is 45, you get senior rates. At CIMB, both holders must meet the age requirement. Each bank follows different rules, so ask before applying.

How Much More Senior FDs Pay

Senior FDs earn more than regular FDs on the same deposit amount. The examples below show real Ringgit differences.

RM80,000 for 12 months at senior FD 2.80% p.a. earns RM2,240 interest. Regular FD at 2.10% p.a. earns RM1,680 interest. Extra income from the senior rate is RM560. That RM560 pays TNB for four months, or Unifi bills for five months, or fills your Myvi tank 10 times.

Split RM150,000 across three banks to stay within PIDM protection limits:

• Public Bank: RM50,000 at 2.15% p.a. earns RM1,075
• CIMB: RM50,000 at 2.10% p.a. earns RM1,050
• Hong Leong Bank: RM50,000 at 2.15% p.a. earns RM1,075

Total yearly income: RM3,200 or RM266.67 monthly if paid monthly. This keeps you under PIDM's RM250,000 protection limit per bank.

RM30,000 with a monthly interest payout at 2.15% p.a. generates a monthly income of (RM30,000 × 2.15%) ÷ 12 = RM53.75. Yearly total: RM645. Principal stays intact: RM30,000. Monthly payout FDs give you regular cash for Astro, phone bills, or groceries without touching your savings.

RM200,000 laddered across different tenures splits as RM50,000 in a 6-month FD at 2.15% earning RM537.50 and maturing in 6 months, RM75,000 in a 12-month FD at 2.80% earning RM2,100 and maturing in 12 months, and RM75,000 in a 24-month FD at 2.80% earning RM4,200 and maturing in 24 months. Total interest over 2 years: RM6,837.50. Laddering lets you access funds at regular intervals without breaking long-term FDs and losing interest.

How Senior FD Returns Compare to Savings Accounts

A savings account paying 2.00% p.a. on RM50,000 earns RM1,000 over 12 months with immediate access. Senior FDs at 2.05% to 2.80% earn RM1,025 to RM1,400 but lock your funds for the full year. That extra RM25 to RM400 is what you pay for liquidity.

Regular FDs earn RM1,050, sitting between savings accounts and senior FDs. Pick based on whether you need access to funds or want higher guaranteed returns.

Retirees with enough emergency money in accessible accounts benefit most from senior FD rates. Those needing regular access should keep funds in savings accounts despite lower returns

Why Split Your Fixed Deposit Across Different Tenures

Spreading money across 6-month, 12-month, and 24-months accounts beats locking everything in one fixed deposit. This laddering strategy gives you regular maturity dates when you can grab funds or reinvest at better rates if they climb.

Take RM120,000 in retirement savings. Place RM30,000 in a 6-month FD at 2.15% which matures in 6 months, earning RM322.50. Place RM50,000 in a 12-month FD at 2.80% which matures in 12 months, earning RM1,400. Place RM40,000 in a 24-month FD at 2.80% which matures in 24 months, earning RM2,240.

After 6 months, you have RM30,322.50 available. If rates jump to 3.00%, reinvest at the higher rate. If you need money for Raya shopping at Sogo, use the matured RM30,000. Your longer FDs keep earning.

After 12 months, another RM51,400 becomes available. After 24 months, you collect the final RM42,240.

Lock all RM120,000 in a 60-month FD at 3.20% and you're locked out for 5 years. Bank Negara raises rates and new FDs hit 4.00% next year? You're stuck at 3.20%. Car breaks down and you need emergency money? You forfeit all interest.

When Banks Run Senior FD Promotions

Banks run senior FD promotions during Chinese New Year, Hari Raya, Deepavali, and year-end. Alliance Bank bumps their 12-month rate from 2.90% to 3.40% for fresh funds. Hong Leong Bank throws in extra 0.30% during Raya promotions.

Watch for these promotions on RinggitPlus or sign up for bank newsletters. Promotions last 2 to 4 weeks. You need fresh funds - money from another bank or cash, not from your existing account at the same bank.

Alliance Bank runs a promotion at 3.40% for 12 months during CNY 2025, requiring RM10,000 minimum in fresh funds. If you have RM10,000 sitting in a Maybank savings account earning nothing, transfer it to Alliance Bank and place the FD during the promotion. You get 3.40% instead of the regular 2.90%.

• RM10,000 at 3.40% earns RM340 interest.
• RM10,000 at 2.90% earns RM290 interest.
• Extra: RM50.

On RM100,000, that promotional rate difference gives you RM500 more - enough for a family dinner at Pavilion or new kitchen appliances at Courts.

How PIDM Protects Your Money

Perbadanan Insurans Deposit Malaysia (PIDM) protects RM250,000 per person per bank. If CIMB collapses tomorrow, PIDM pays you back up to RM250,000. Anything above that is gone.

You have RM400,000 to invest. Put all RM400,000 in one bank and only RM250,000 is protected - you risk losing RM150,000. Split across banks: RM250,000 in Public Bank senior FD (protected) and RM150,000 in Alliance Bank senior FD (protected).

Joint accounts get separate protection. If you and your spouse open a joint FD at Maybank with RM250,000, that's protected separately from your individual RM250,000 FD at the same bank. You get RM500,000 protection at one bank through account structuring.

Early Withdrawal Penalties Cost You Money

Malaysian banks slap penalties if you withdraw even one day early. FDs under 3 months lose everything - zero interest. FDs over 3 months lose all interest if you withdraw within the first 3 months, or you keep 50% of pro-rated interest after 3 months.

You place RM20,000 in a 1-month FD at 2.40% p.a. earning RM40. On day 29, your car breaks down and you need the money. You withdraw and get back RM20,000 with no interest. The bank keeps your RM40.

You place RM50,000 in a 12-month senior FD at 2.80% p.a. earning RM1,400 after 12 months. After 8 months, your daughter needs money for university fees and you withdraw. Interest earned for 8 months at 2.80%: (RM50,000 × 2.80% × 8) ÷ 12 = RM933.33. Bank takes 50% penalty: RM933.33 ÷ 2 = RM466.67. You receive: RM50,000 + RM466.67 = RM50,466.67. Wait the full 12 months and you get RM51,400. Early withdrawal costs you RM933.33 - half your interest is gone as a penalty.

Laddering across multiple tenures matters. Keep some money in shorter FDs so you have access without penalties.

How To Open a Senior Fixed Deposit Account

Opening a senior FD takes 15 to 20 minutes at any branch. Bring your MyKad and your deposit (cash, cheque, or bank transfer confirmation). Staff verify your age against the bank's requirement, process the deposit, and hand you an FD certificate showing your principal amount, interest rate, tenure, maturity date, and account number. Lose this certificate and you'll pay RM10 to RM25 for a replacement, plus 3 to 5 days of paperwork.

CIMB lets you open senior FDs through online banking if you're already a customer. Log in, click "Fixed Deposit," pick tenure and amount, and click confirm. Bank emails you an e-certificate in 5 minutes.

How Banks Calculate Interest Rates

Banks list the interest rate per annum (p.a.), the tenure in months, and the minimum deposit. Public Bank Golden 50 PLUS shows 2.15% p.a. for 12 months, RM30,000 minimum. AmBank AmFDPLUS shows 2.05% p.a. for 12 months, RM5,000 minimum.

The 2.15% is what you earn if you leave the money for a full year. Place RM10,000 at 2.15% for 12 months and collect RM10,215 at maturity.

Shorter tenures earn pro-rated interest. Six months at 2.35% p.a. on RM10,000 means you get half of 2.35%, which is 1.175% or RM117.50. Your RM10,000 becomes RM10,117.50 after 6 months.

Retirees living on FD income prefer monthly payouts. Need RM500 per month to cover TNB, Astro, and phone bills? Place enough in monthly payout FDs to generate that amount. The rest goes into at-maturity FDs for better rates.

Best Senior Fixed Deposit Rates Malaysia 2026

Six Malaysian banks offer senior-specific fixed deposit rates. This table compares minimum deposits, rates, and key features:

BSN pays the highest rate at 2.80%, but requires branch visits with limited locations. Public Bank and CIMB offer the most convenience with extensive branch networks and online banking. Choose based on whether you prioritise returns, accessibility, or specific features like early withdrawal or monthly payouts.

Detailed Analysis of Fixed Deposit Products

Public Bank Golden 50 PLUS Fixed Deposit Account

Public Bank accepts customers at 50, five years earlier than banks requiring 55. The monthly interest payout works for retirees needing regular cash - RM30,000 generates RM53.75 every month while the principal stays locked.

Rates vary by tenure: 1.85% for 1 month, 1.90% for 2 months, 2.05% for 3 months, 2.10% for 4-5 months, and 2.15% for 6-60 months. Same 2.15% whether you lock funds for 6 months or 5 years. Public Bank has branches from Perlis to Johor.

The RM30,000 minimum blocks anyone with smaller savings. AmBank AmFDPlus and BSN Term Deposit for Senior Citizen accept RM5,000, making this nearly six times harder to access. No early withdrawal means your money stays locked until maturity even if your Proton breaks down.

Public Bank suits retirees with at least RM30,000 who need a monthly income and already bank with them. If you have less than RM30,000, look at BSN or AmBank's RM5,000 minimum options. If you need withdrawal flexibility, CIMB's early withdrawal option makes more sense.

AmBank AmFDPlus

AmBank accepts anyone 18 and above, though this isn't a dedicated senior product. The RM5,000 minimum works for smaller deposits.

Rates improve slightly at longer tenures - 1.95% for 3 months, 2.05% for 6 to 12 months, 2.1% for 15 to 24 months and 2.15% for 36 to 60 months. AmBank's app lets existing customers place FDs without visiting branches.

This product offers no age-based rate premium. No monthly payout option - you wait until maturity for everything. No early withdrawal permitted.

Good for younger savers who haven't turned 50 yet, or if you need somewhere to park RM5,000-RM10,000 temporarily until you qualify for senior rates at 50. If you're already 50 or older, just go straight for the senior FDs instead.

CIMB Golden Time Deposit 2 Big Plus for 50 Plus

CIMB allows early withdrawal, rare among senior FDs. Emergency access if you need money before maturity. The 50+ age requirement opens access earlier than 55+ products.

CIMB has ATMs everywhere - Bangsar, Subang, Penang, JB. The 2.10% for 15 to 24 months and 2.15% for 36 to 60 months beat regular savings accounts paying 0.25% to 1.00%.

No 6-month option. You commit to at least 15 months. The RM30,000 minimum blocks smaller savers. Partial withdrawals need a minimum of RM5,000, with additional amounts in multiples of RM1,000. Keep at least RM30,000 balance or the FD account closes.

Good for CIMB customers with RM30,000 or more who want the option to withdraw early without penalty. Handy if you might need the money for house repairs or medical bills within the year. But if you're chasing the highest rates, there are better options.

Hong Leong Senior Savers Flexi FD

Hong Leong needs RM10,000 minimum, lower than the RM30,000 products but higher than the RM5,000 options. The 50+ age starts earlier compared to the 55+ competitors. Hong Leong Bank operates across Malaysia with branches and online banking.

The "Flexi" name misleads - this product does NOT allow early withdrawal despite the branding. No monthly payout option.

Good for Hong Leong customers parking RM10,000 to RM30,000 who want a no-fuss FD. Just don't be fooled by the "Flexi" name - you can't withdraw early.

BSN Term Deposit Senior Citizen

BSN pays 2.80% across all tenures - 12 to 60 months all get the same rate. Beats nearly every competitor. The RM5,000 minimum opens access to most retirees. The 50+ age requirement starts five years earlier than 55+ products. BSN has government backing beyond PIDM protection.

BSN has fewer branches than Maybank, CIMB, or Public Bank. Most BSN branches sit in smaller towns - Kuala Kangsar, Taiping, Bentong - rather than KL or Penang. No online FD placement - you visit a branch physically. No monthly payout - you collect everything at maturity. No early withdrawal under any circumstances. The rate advantage disappears if you spend RM50 on Grab and three hours driving to reach a BSN branch in Banting.

Good for seniors chasing high rates who have a BSN branch nearby and at least RM5,000 to deposit. Put in RM100,000 for 12 months and you'll earn RM2,800 - just RM100 less than the top rate of 2.90%. Not ideal if you need monthly payouts, prefer online banking, or don't have a BSN branch close by.

RHB Fixed Deposit for Senior Citizens

RHB accepts customers at 50, earlier than the 55+ requirements elsewhere. The RM10,000 minimum suits mid-range savers. The "Negotiable" 24-month rate lets you bargain for better returns on large deposits of RM100,000+. RHB has branches across Malaysia.

No 6-month option. You commit for at least 12 months. The 2.05% for 12 months sits 0.75% below market leaders. The "Negotiable" 24-month rate provides no transparency - you won't know what you'll get until you sit with the banker at their Bukit Jalil branch. No early withdrawal. No monthly payout. On RM50,000 for 12 months at 2.05%, you earn only RM1,025 versus RM1,400 at competitive senior FDs, losing RM375 - enough for a month of groceries at Tesco.

Good for RHB customers with RM100,000 or more who can negotiate better rates on 24-month deposits. You might get 2.50% to 2.70% on larger amounts, but make sure to get it confirmed in writing first. If you're depositing the usual RM10,000 to RM50,000, skip this one. At 2.05%, your RM50,000 only earns RM1,025 a year compared to RM1,400 at better senior FDs, that's RM375 down the drain.

Which Bank Pays the Most

BSN's 2.80% rate beats all competitors. Place RM100,000 there and earn RM2,800 yearly - RM400 more than Public Bank's 2.15% rate on the same amount. That RM400 covers two months of Astro and Unifi bills.

For monthly income, CIMB Golden Time Deposit 2 is your only option despite the average 2.10% rate. RM100,000 generates RM175 monthly payments - enough for Astro, your phone bill, and part of your TNB charges.

BSN and AmBank both accept RM5,000 minimum, though BSN wins on rate (2.80% vs 2.15%). On RM5,000, that's RM140 yearly at BSN versus RM107.50 at AmBank.The RM32.50 difference won't change your life, but why leave money on the table?

Which Senior FD Matches Your Situation

Situation 1

You have RM50,000, you're 52, you need guaranteed returns. Go with BSN at 2.80% earning RM1,400 per year. Avoid RHB at 2.05% where you only earn RM1,025 yearly - that's RM375 lost just for banking at the wrong place. That RM375 pays your Astro + Unifi for two months.

Situation 2

You have RM30,000, you're 50, and you need RM150 monthly income. Public Bank Golden 50 PLUS at 2.15% only gives RM53.75 per month. You'd need RM84,000 to hit RM150 monthly. Split your RM30,000 into BSN at 2.80% for maturity, then after 12 months, transfer the principal plus interest (RM30,840) to a monthly payout FD elsewhere.

Situation 3

You have RM100,000, you're 55, and you want to test before committing a large sum. Start with RM10,000 in Hong Leong's 6-month FD at 2.05%. After 6 months, when you're comfortable with how FDs work, move the full RM100,000 to BSN's 12-month FD at 2.80%.

Situation 4

You have RM5,000 and you're 48 (not yet 50). AmBank at 2.15% is your only option since you haven't hit senior rate eligibility yet. Wait two years until 50, then transfer everything to BSN at 2.80% where you'll start earning proper senior rates.

Situation 5

You have RM200,000, you're 60, you want PIDM protection. Split across banks - RM100,000 at BSN plus RM100,000 at Public Bank. This product list doesn't show enough options for RM200,000, so include other banks like Alliance Bank or Maybank to spread risk.

Questions to Ask Before Opening Your Senior Fixed Deposit Account

Walk into any bank and ask about their current senior FD rate for 12 months. Rates change weekly, so whatever you read online might be outdated by the time you arrive.

Ask about promotions specifically for senior citizens this month; staff won't volunteer this information unless you specifically request it.

Check whether you can open through online banking if you're already a customer; this will save you a trip to their branch in Damansara or Bangsar. Get the exact penalty calculation in writing if you think you might need early withdrawal; 'there's a penalty' isn't specific enough when you're placing RM50,000.

Ask about auto-renewal at maturity. If enabled, will you get today's senior rate or next year's rate (which might be lower)? For joint accounts where your spouse doesn't meet the age requirement, confirm whether you both get senior rates because each bank applies different rules.

What You Need To Be Aware of Senior Fixed Deposit

The bank advertises 4.50% when everyone else offers 2.50 to 3.00%. Read the fine print. They're bundling it with an insurance policy costing RM5,000 upfront, or forcing you to buy unit trust investments.

Staff pressure you to "sign now before the promotion ends today". Malaysian banks run promotions for weeks, not hours. If they're rushing you at their Bangsar branch, they're hiding something. Take the brochure home and compare it with other banks on RinggitPlus.

They force you to open a credit card or buy insurance to get the senior rate. Calculate the true cost. If the credit card has an RM200 annual fee and you get an extra 0.50% on your FD, is it worth it? On RM50,000, that 0.50% is RM250. Minus the RM200 fee, you only gain RM50 - barely enough for lunch at Nando's.

The bank won't give you the effective interest rate on a Step-Up FD. They keep saying "up to 4.20%" but won't tell you the average rate across all months. They're hiding that the EIR is only 2.40%.

Everything the staff at their Subang branch tells you goes in the FD certificate or official letter. Verbal promises don't count. If they say "we'll give you 3.00% at renewal," get it in writing or it won't happen.

Bank insists you maintain RM10,000 in a savings account to get the senior FD rate. That RM10,000 earns maybe 0.25% (RM25 per year) while your FD earns 2.80%. Your RM10,000 in the FD would earn RM280 instead of RM25 in the savings account - that's RM255 lost, enough for a month of petrol.

Islamic Senior Fixed Deposit for Muslim Retirees

CIMB Islamic and Public Bank Islamic offer Shariah-compliant senior term deposits using Commodity Murabahah principles instead of interest-based returns. The bank uses your deposit to buy commodities (palm oil, crude oil) from Trader A, then immediately sells to Trader B at a marked-up price. The profit from that sale is your return. No riba involved.

Rates match conventional FDs. PIDM protects Islamic FDs the same way it protects conventional FDs, up to RM250,000 per person per bank.

Bring your MyKad and your deposit money. The process takes 15 to 20 minutes at the branch. Some Islamic banks let you open through online banking.

The certificates say "profit rate" instead of "interest rate", but the math is the same. RM50,000 at a 2.60% profit rate for 12 months gives you RM51,300 at maturity.

Frequenly Asked Questions (FAQs) About Senior Fixed Deposits

Can I Do Early Withdrawal from Senior FD During Emergencies?

If you face an emergency, you can withdraw early from banks like Hong Leong Bank, CIMB, or RHB. Banks like Public Bank and Alliance Bank typically lock your money until the end of the term, meaning no early withdrawals are allowed.

Generally, if you withdraw within the first three months, you forfeit all interest; after three months, you usually lose 50% of the interest you have earned so far.

If you need to access your funds before the maturity date, you will face a penalty on your interest.

Should I Pay Tax on Senior FD Interest Income in Malaysia?

People aged 60 and above get a tax exemption on the first RM1,000 of interest income per year. Under 60, all FD interest is taxable.

You earn RM2,800 in FD interest and you're 62. The first RM1,000 is tax-exempt. The remaining RM1,800 gets added to your yearly income for LHDN tax calculation. At a 3% tax bracket, you pay RM54 tax on the RM1,800. At 58, the full RM2,800 is taxable income.

Banks don't deduct tax from your FD interest. You report all interest income when filing your annual income tax return (Borang BE). LHDN gets this information directly from banks.

Can My Foreign Spouse Open A Senior FD In Malaysia?

Malaysian citizens open joint senior FD accounts with PR (Permanent Resident) spouses, provided the Malaysian citizen meets the age requirement. The PR holder presents their MyPR card.

Foreigners on MM2H or employment visas only get standard rates at Malaysian banks. They open regular fixed deposits at standard board rates (2.10% to 2.45% p.a.), missing out on the senior citizen premium of 2.65% to 3.10% p.a.

What Happens to My Senior FD After Death?

If a fixed deposit is in a single name, it does not automatically transfer to a spouse. Family members must present a death certificate and court documents, like a grant of probate, to the bank to claim the funds. This legal process is often slow, taking between three to six months before the bank releases the principal and interest.

To get money to your loved ones faster, you can convert your FD into a joint account or complete a beneficiary nomination form at your bank. These steps allow your beneficiaries to bypass lengthy legal delays.

Can I Use Senior FD as Loan Collateral in Malaysia?

Malaysian banks accept FDs as collateral for personal loans, home loans, or other credit facilities. Your FD keeps earning interest while serving as security for the loan.

Most banks lend up to 90% of your FD value. With a RM100,000 senior FD, you borrow RM90,000. Your RM100,000 keeps earning 2.65% interest while the loan charges 5% to 7% interest. The net borrowing cost is approximately 2.35% to 4.35% of RM90,000.

The FD stays locked until you repay the loan or the FD matures, whichever happens later. Default on loan payments and the bank uses your FD to settle the outstanding debt.

Is It Worth It If I Withdraw My EPF for a Senior Fixed Deposit?

No. EPF dividends pay 5 to 6% per year, higher than senior FD rates of 2.65% to 3.10% p.a. EPF also gives tax benefits on contributions and dividends.

Withdrawing RM50,000 from EPF at age 52 means losing 8-13 years of compounding before you reach 60. That RM50,000 left in EPF grows to RM85,000-RM100,000 by age 60 with continued dividends.

Use senior FDs for money already outside your EPF - inheritance from your parents, property sale proceeds from selling your Taman Tun Dr Ismail house, retirement bonuses, insurance payouts, or EPF funds you've already withdrawn for approved purposes.

Which One Is Better, One Large Senior FD vs Multiple Smaller Deposits?

To keep your savings safe, split large sums across different banks to stay within the protection limits of Perbadanan Insurans Deposit Malaysia (PIDM). PIDM insures up to RM250,000 per person at each bank.

For example, if you have RM300,000, placing it all in one bank leaves RM50,000 unprotected if the bank fails, whereas splitting it between two banks ensures the full amount is insured.

You should also use a strategy called laddering by splitting your money across different tenures, such as 6-month and 24-month terms. Because interest rates are usually the same whether you deposit RM10,000 or RM100,000, this method provides flexibility without reducing your overall returns.

Mistakes Malaysian Seniors Make

Your Myvi breaks down, needs RM5,000 in repairs at the workshop in Puchong, but your money is locked in a 12-month FD. You withdraw early and lose half your interest. Keep 6 months of expenses (RM15,000-RM25,000) in a regular Maybank or CIMB savings account for emergencies.

You drive 30km from Petaling Jaya to Klang, spend RM20 on petrol and Touch 'n Go, wait in line for an hour at the bank, just to earn an extra RM50 on RM50,000 from a 0.10% higher rate. Your time and petrol cost more than the gain. Stick with convenient banks unless the rate difference hits 0.50% or more (RM250+ on RM50,000).

You lock everything in one 60-month FD at 3.20% for 5 years. Then Bank Negara raises rates and new FDs hit 4.50% next year. You're stuck at 3.20% for 4 more years, watching your neighbour at the Taman Desa kopitiam earn 4.50%. Always ladder across multiple tenures.

You place RM400,000 all in one bank. Only RM250,000 is protected. Bank collapses, you lose RM150,000. Split across two banks: RM250,000 each, both protected.

Bank staff at their Mont Kiara branch says, "When this matures, we'll give you 3.50% for the renewal." They put nothing in writing. 12 months later, when it matures, the rate is only 2.20% and the staff member quit and now works at a bank in Singapore. You have no proof. Get everything in writing.

You place RM50,000 on 15 January 2024 for 12 months. Maturity date is 15 January 2025. You forgot because you were busy with your son's wedding at Sunway Resort. The bank auto-renews at the current rate of 2.00% instead of the 2.80% you had. You're stuck for another 12 months at a lower rate because you didn't mark it on your calendar.

What You Need to Remember

Senior FD rates beat regular FDs by 0.70% on average. That's RM700 more per year on RM100,000, enough for six months of Astro and Unifi bills combined. Public Bank, Alliance Bank, and CIMB accept customers from the age of 50, while Maybank, Hong Leong, RHB, and AmBank require 55.

Protect your savings by splitting across banks. PIDM covers RM250,000 per person per bank. Place RM300,000 at one bank and you risk losing RM50,000 if it fails. Withdraw before maturity and penalties cost you 50% of the earned interest on FDs over 3 months.

Ladder your deposits across 6-month, 12-month, and 24-month tenures for regular access. Watch for CNY, Raya, and Deepavali promotions adding 0.30% to 0.80%. And remember, EPF dividends run 5% to 6% yearly, so never withdraw from EPF to place in senior FDs earning 2.05% to 2.80%.