4.2% p.a. interest on fixed deposits, farewell. My strategy.


I received a notification that my 18 months fixed deposits are maturing.

Time really flies.


Seems like it was only recently that fixed deposits were paying as high as 4.2% p.a.

Well, a quick check tells me the highest interest rate I can get now from CIMB is 3.3% p.a.

This is also for a much shorter 3 months tenure.


The interest rate falls to 3% p.a. if we choose a 12 months tenure.

This is probably because every institution is factoring in interest rate cuts towards the end of 2024 and also in 2025.

The news is that the ECB will cut interest rates before the FED.


This is good news for interest rate sensitive risk assets like REITs, for sure.

So, what am I doing?

Like I shared in a recent blog and YouTube video, I maintain $250K in my emergency fund.

I park the money in fixed deposits.

I will continue to do so.

I would do this in batches of $20,000 because if I had to use my emergency fund, breaking smaller sums will avoid losing too much in interest income.

So, if I had $100,000, I would break that into 5 fixed deposits with $20,000 each instead of having a single fixed deposit with the full $100,000, for example.

It could even be 10 fixed deposits with $10,000 each.

This explains what you see in the photo below:

Anyway, this is just something I am comfortable with and it makes sense to me.

All of us have different circumstances and beliefs.

As long as we are maintaining a meaningful emergency fund that suits our circumstances and as long as we are able to access it reasonably quickly, we should be OK.

If AK can do it, so can you!

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