If you’re looking into fixed deposit accounts as part of your financial portfolio, you must do a great deal of comparison work to get the best rate possible on the market. Fixed rate accounts are always fighting inflation. Because there is no way to improve upon the return that fixed rate account can give you, if inflation rises over the time period that you are holding the account, then you are actually losing money.
First and foremost, realize that the interest rate is only one way that you can profit off of a fixed rate account. There are many other aspects of these accounts that will affect the amount of money that you have at the end of your term.
For instance, a Maybank fixed deposit, a Public Bank fixed deposit (see here) and a CIMB fixed deposit might all have the same advertised interest rates, but the other terms may allow you to profit in places where you would normally have no opportunity. Look for the ability to change an interest rate based upon activity in the market as a positive sign that you should invest in one fixed rate account over the other.
Other opportunities to profit include the ability to leverage a fixed rate account for lines of credit. With the proper investment strategy, taking loans on a fixed rate account can give you an overall interest rate that is higher than even some mutual funds. There is some risk in the strategy; however, so make sure that you understand all of the risks that you are taking.
Yet another way that you may be able to profit off of a fixed deposit account is by using it as one leg of a more speculative strategy. The fixed rate account may hold the cash reserve that you need to influence other investors to the table for a project.
Fixed rate accounts also give you the peace of mind that you need to make sound decisions on your other investments. Do not discount the psychological advantage of fixed rate accounts as you move forward in your other investments.