Making Money From Investments Through The Kampung Way - Kampung Investor Dot Com

Fixed Deposit or better know as FD has never been my favorite kind of investment. The main reason FD didn’t made to my favorite list is due to the Return Of Investment (ROI) which ranges from 3% to 4%.

I guess i totally oppose my buddy’s post Irwan, on Fixed Deposit as being a safe investment. No hard feelings ya bud, just to keep you on your toes.

I regard Fixed Deposit as a silent killer because of the low ROI compared to the inflation that we are facing. By putting money in the FD, one is loosing money instead of making a return out of it.

Let’s take a FD ROI at 4% while the inflation at 8% (Appoxiamate inflation according to Bank Negara). In short one is loosing 4% per annum by putting money in FD.

At 8% inflation rate one is loosing 4% per annum without realizing it.

If one invest RM 50k into FD
With The Rule 72 Calculation :-

72/4 = 18 years

In short, if one invest in FD with 4% return and at 8% inflation, by 18 years your investment in the FD will become RM 25k.

That is why i name the Fixed Deposit as the silent killer where we won’t realize that we are loosing more then we are gaining. Don’t forget, i only take 8% as the inflation rate. Do you think inflation is that low? ^^

So think wisely before putting all your money into the FD.

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