MBSB Fortune For You - 9 Months Fixed Deposit "CASA" 4.20% p.a - effective rate of 3.81% p.a (ends 31st December 2013)

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MBSB Fortune For You - 9 Months Fixed Deposit "CASA" 4.20% p.a - effective rate of 3.81% p.a (ends 31st December 2013)
Drawbacks: no explict guarantee from PIDM, only Ministry of Finance implicit guarantee

Promotion Date: 14th November 2013 - 31st December 2013
Minimum Deposit: RM10,000
Maximum Deposit: None
Tenure: 9 Months
Interest Rate: 4.20%p.a
Effective Interest Rate: 3.81% p.a
Highlighted Terms and Conditions:
1. Open to all Malaysians, Individual or Joint Account Holder age 18 and above.
2. Tenure 9 Months at a ratio of 80:20 (FD: Normal Savings Account).
3. It is mandatory for the customer to open a Normal Savings Account (2.25%) for the 'earmark' and interest transfer purpose.
For full terms and conditions, click here.
Malaysia Building Society Berhad
Malaysian Building Society Berhad (MBSB) is now offering a "Fortune For You" Fixed Deposit Promotion- valid from the 14th November 2013 to 31st December 2013. This promotion boasts a seemingly fantastic return of 4.20% p.a on a 9 month tenure, however a closer look shows us that this Fixed Deposit product is also paired with a 'CASA' Normal Savings Account. From this information, we can pretty much discern that the effective rate will be lower than advertised as basically all CASA accounts offer a lower rate than Fixed Deposits do (if they offered higher rates then why put your money in an FD in the first place?).
The way this promotion works is that your initial deposit has to be split up into a ratio of 80:20, where 80 percent of your deposit goes to the Fixed Deposit and 20% of your deposit goes to a Normal Savings Account. So let's say you have RM10,000.00 in your hand, RM8,000.00 will be in your Fixed Deposit Account and RM2,000.00 will be in your Normal Savings Account.
MBSB CASA 9 Months CASA9 Months Conventional FDTotal
Initial DepositRM2,000.00RM8,000.00RM10,000.00
Interest Rate p.a2.25%4.20%3.81%
Interest EarnedRM33.66RM250.70RM284.36
As we can see from the table above, a minimum initial deposit of RM10,000.00, will nett you RM284.36 in interest upon maturity. This gives us an effective rate of 3.81% p.a which is lower than the promoted rate of 4.20% p.a. In spite of this, this promotion still places itself as one of the top 9 month Fixed Deposits in the market after Bank Rakyat. However, our main concern is with their PIDM status. As MBSB is a Cooperative Bank, they are not covered under this explicit guarantee. As such, you will only get implicit protection from the Ministry of Finance under the Development of Financial Institution Act (DAFIA).
Update: This promotion has a new end date that is from 14th November 2013 to 31st December 2013. If you're still interested in this promotion but have missed the previous promotion, now is your chance to join!
Interested to know more about FD as well as the top rates for different FD tenures? Then head on to our “Best FD Rates in Malaysia – Earn up to 4.01% for one year” article! Or you can try our very handy Fixed Deposit Comparison Tool to compare the available bank and FD rates in the market!

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