Instant FD Interest Payment: Fixed Return Investment Account from CIMB Islamic Banking
It used to be that you would only get the interest payment of your fixed deposit at the maturity date. No more! Through its Islamic Baking arm, CIMB has just launched a new FD that pays the interest up-front. Called “Advance Profit,” the first of it kind, it is a Islamic fixed deposit product based on the concept of tawarrup in relation to murabahah.
In conjunction with its launched, it has a special promote rate of 3.35% p.a. for minimum amount of RM10,000 for at least 3 months. Taken on the face value, the 3.35% are higher than the current average market rate.
The advantage of “Advanced Profit” is it gives you instant payment and thus more flexibility for your money.
The down side is, you has to pay a stiff RM20.00 as a processing fees. So here is the catch, if you were to deduct RM20.00 form the interest payment of a RM10,000 deposit, the actual interest rate you are getting is only 2.55% p.a., almost a full 1.00% lower than the market average!
Cheating! You will say. But looking from a different anchor, the “1%” is essentially the ‘cost’ you have to pay to get the money ‘now!.” The lesson is, if the product sounds unusually attractive, be prepared to pay for the “unusually attractiveness” side of it. So the bottom line is, does getting the money 3 months in advanced worth the cost? CIMB thinks yes, it aims to attract RM1bil worth of deposits in the next 5 months.
And should you decided to withdraw before maturity, you will not get 100% of your money back, a predetermined formula will be used to decide how much will you get back.
If getting the interest payment now is what you care the most, than by all means, go for it. If not, go for the conventional FD. Ultimately, I guessed that should you withdraw your deposit before it reaches maturity, either the Advance Profit or conventional FD, you will essentially end-up the same – get your money back but without any interest.
Below is the various service charges
thanks a lot for this info. luckily i saw this.
u know in addition. i was calculating the profits
Say we have RM25k principle in maybank. which pays 3.1% = RM 61+ every month profit only .
with this cimb investment scheme = i get RM25 extra after maturity(RM85+).
When we deduct RM 20 like u said for processing fees. i am left with RM5 profit only over maybank fd so i think it’s not worth it right”? to go through the hassle of transferring all FD funds from maybank to CIMB ?
thanks bro..
regards
Mike
There are a lot of fine prints that sad to say that, banks seems to adopt a ‘don’t ask, don’t tell’ approach. If you don’t ask because you don’t know what to ask, than the banks won’t tell you. And if you found out the real deal later and felt unhappy about it, the bank would say you should have read the terms and conditions in the first place. Keep up your saving good habit.