PB Foreign Currency Fixed Deposit
January 14th, 2008 | by winsonlee |Target Audience :
a) Malaysian who have minimum savings of RM10,000.
b) Malaysian citizen currently working in Australia who is earning more then AU 30,000/ year with minimum saving of RM10,000 or its equivalent in foreign currency.
| 1 month | 3 month | 6 month | 12 month | |
| PBB | 6.25% | 6.75% | 7.15% | 7.40% |
| RHB | 6.20% | 6.50% | 6.70% | 6.80% |
| CIMB | 6.20% | 6.50% | 6.80% | 7.20% |
The table above compares different fixed deposit rates for different banks in Malaysia.
Audience A
It is straight forward that if you put RM10,000 in australian currency fixed deposit, you will get RM 740 after 12 months.
Audience B
Tax rates 2007-08
| Taxable income | Tax on this income |
| $1 – $6,000 | Nil |
| $6,001 – $30,000 | 15c for each $1 over $6,000 |
| $30,001 – $75,000 | $3,600 plus 30c for each $1 over $30,000 |
| $75,001 – $150,000 | $17,100 plus 40c for each $1 over $75,000 |
| $150,001 and over | $47,100 plus 45c for each $1 over $150,000 |
The reason stated that it is suitable for people who earn more then AU 30,000 is because of the fact that for each $1 over $30,000, 30c will be deducted for tax purpose.
With more then $30,000 annual income, if you have AU 10,000 sitting in IngDirect with 6.40% interest / annum, after a year, you will be getting AU 659.11 before tax deduction. After tax deduction will be AU 461.37 which means AU 197.74 is deducted for tax purposes. If AU 10,000 is placed in public bank foreign currency fixed deposit, with 7.40% interest / annum, you will be getting AU 740.00 after 12 months. Theoretically with AU 10,000, you are AU 278.63 richer for just choosing the right place to your cash. That condition is only applicable if the income obtain through interest is not taxable. The statement bellow mentioned that income accrued is exempted from tax.
With 30c tax for every dollar, interest rates needs to go up to 10.05% to achieve the same amount in Malaysia with 7.4% interest.
Although many malaysian works in Australia, I feel that they should not just limit their opportunity in Australia. Australia may be a good place to work but there are still much opportunity in other countries.
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