As a Malaysia, have you ever wonder who made decision on the bank interest rate? Well, the interest rate decisions are made by The Central Bank of Malaysia, Bank Negara Malaysia. The official interest rate is the Overnight Policy Rate, in which the page provides the Malaysia interest rate with actual values, historical data, charts, forecast, statistics, economic calendar and news. It will be updated from time to time.
Do you know how the banks set interest rates? If you are keeping your money in a bank, it is important to know what drives the bank interest rates. You should know that the interest rates change depending on what is happening in the world at large and every bank does things in a different way. The conditions of the economy are the most important factor affecting the bank interest rates. In general, bank interest rates follow other rates. This means that when rates as a whole are low, you will not be earning much on your savings at the bank. On the other hand, when interest rates are in general rise, bank rates will follow. Most people should be aware that interest rates are lowest when the economy is slow as there is not much demand for money. Thus, your reward for handing money to the bank will not be that attractive. Let’s put it this way, the bank is happy to take your money but they cannot do much with it. Eventually, they pay you a low rate.
Is there anything that you can do in order to get the best interest rates? Generally, you cannot be doing much to change the economy condition if the rates are low. However, you can try to search out rates at the higher end of the range of rates available. First and foremost, you should figure out whether or not it is worth your time to chase higher bank interest rates. Do the mathematics and figure out how much you will earn if you have to switch in between different banks. Also, do take note that your money can be in idle status and not earning any interest when you move it around.
The Malaysia economy with a population of 28.25 million, estimated in year 2010, is ranked at 30th in the world with a GDP PPP of 384 billion. Bank deposits held for a fixed term in the country are called fixed deposits, in which the interest rates can be up to 4.30%. For saving accounts, the interest rates are about 2.20% and above. For those of you, who intend to get a loan like home loan, bear in mind that the interest rates are now as high as 4.75% and above. For credit card holders, the interest rates start from 15.00%. Most bank interest rates are quite standard, around the same level but there will certainly be some differences. Some banks may pay more than the other banks for the same product like savings accounts or home loan. Banks will have different approaches or strategies to earn money. Some banks will take deposits and lend them out while some other banks take a more varied approach by earning revenue and fees from other services like credit cards and ancillary business.
All in all, different banks will have different interest rates depending on the products and the flow of the economy.