I did, however, get a good look at the Malaysian banking sector and I didn't like what I saw. Everything just seems so backward and twenty years behind. Of course you could argue that it's this very backwardness that's keeping us relatively unscathed in today's financial crisis - no loans to people who can't afford to pay it back and all that. But I'm talking about the deposit side of things.
When you open a savings or current account in a bank, you're lending the bank your money, and you should get paid for that loan in the form of an interest rate. In Malaysia, they do give you some compensation for your loan, but they may as well not bother. For a regular savings account at this particular bank that I chose, you don't get anything if you have less than RM3,000 in the account. Once you break the 3k mark, you get a paltry 0.2% in interest. It's a graduated rate, of course, but at the current inflation rate, I may as well spend all my money on canned food and give some serious thought to building an industrial-sized freezer room for all my groceries for the next ten years.
Not only do they not compensate you adequately, they also try to milk you for every penny that you own. For starters, they actually expect you to pay to own an ATM card. And it's a yearly fee too! Coming back from the US, where they give you a debit card to go with your order of chai latte, this concept was a little hard to stomach. They also charge you a fee for current accounts. And of course, credit cards, although some banks are wisening up and offering "free for life" credit cards, but only if you spend more than a certain amount per annum. And don't get me started on credit cards. I know the US is paying the price for easy credit, but seriously, can't I get a credit card without an income tax form? Not even if I show you an offer letter for my next job? And not even if I have a fixed deposit account with your bank? I'm not asking for a high limit. Not to start with anyway. Sigh.
As for internet banking, as an account holder at this particular bank, you do not automatically have online access to your account. Instead, you have to either register for the service through the ATM or submit a paper form to the branch at which you opened your account. Of course, being too Americanised, I didn't think to ask about it at the bank, so I'll have to go back and set it up. What a hassle. I haven't, obviously, had a chance to use this online banking system yet, but I don't have high hopes for it.
The only nice thing I have to say about the banking system here is that you can have several "tranches" in your fixed deposit account so that if you should ever need to withdraw some money from the account, you don't have to incur the penalty for early withdrawal for the full amount of the deposit. But then again, interest rates for a fixed deposit account here start from 3% so there really isn't much to lose.
Where are the high interest online savings accounts? No-fee banking? Really cool personalised checkbooks with a large variety of backgrounds to choose from? Debit cards? Credit cards? Sigh, Malaysia still has a lot to learn in the banking department.
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8 comments:
Some banks ATM cards can function as debit cards (Maybankard for example). I've given up trying to count the Cost of Banking in Malaysia - tend to write it off as about RM50-100/year, but that of course, doesn't include the opportunity cost of missing interest. ;) AND the increased risk of having to carry cash around, which might get filched etc.
Um.. isn't the CD interest in the US about 2.5% now? and you can get 5% (or at least 4.4% if you know how and where :) )
Actually if you have an online savings account, you can get at least 3% and you don't have to deal with the hassle of penalties for early withdrawals because there's no minimum time limit. In any case, I'm not in the US anymore so I can't apply for any new banking products :( Besides, I don't want to be fully exposed to currency risk - gotta diversify, right?
I don't know what people mean by "currency risk". If you work in the same country as your salary is denominated in, then you have no currency risk. If you're paid in US$ and you work in KL then maybe.
"Actually if you have an online savings account, you can get at least 3% and you don't have to deal with the hassle of penalties for early withdrawals because there's no minimum time limit."
There's no guarantee the bank will remain solvent though.
I'm unemployed and I still have currency risk. Everyone who has money in a different currency than their current country of domicile faces the risk. Of course in my case the money in my bank account is insignificant anyway, but that just means I'm even more reluctant to lose any of it.
And the bank doesn't have to remain solvent - deposits are fully guaranteed in Malaysia and last I heard, they're guaranteed to $60k in the States. Who knows, Bush might even have increased it to a full guarantee.
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