Hong Leong Bank Inflation Buster - FD Interest Of 79% p.a.?

79% p.a.? This has to be the highest we have ever seen in Malaysia. How is this possible from Hong Leong Bank? Here’s the catch…

1. You must invest a minimum of RM18,000 and only in the multiple of RM18,000.

2. Depending on the plan you choose,
Value Deal - a low risk plan for conservative investors whereby 90% is invested into InvestSafe, a low risk investment with capital protection and 10% into a 2-month FD or,
Booster Deal - a moderate risk plan for aggressive investors whereby 70% is invested into unit trust equity fund (you can choose from the 80 over funds HLB represent) and 30% into 1-month FD

3. There are two optional add-ons - Savings Multiplier Plan (regular investments into unit trust - minimum of RM5,000) & Bijak Malaysia (life insurance plan - minimum full year premium of RM2,400).

To qualify for the 79% interest, you have to go for the Booster Deal and the two optional add-ons, meaning you have invest a minimum of RM25,500 (RM18,000 + RM5,000 + RM2,400) for the first year. Your 79% interest which will only apply for the 1-month FD of RM12,600 under the Booster Deal will amount to RM829.50.

Not bad. But please ask the following questions when evaluating this Inflation Buster Scheme from Hong Leong Bank:

1. How long must you participate in the Savings Multiplier Plan? Can you stop after only one year?

2. How long must you pay the premium for the Bijak Malaysia Insurance? You may have to pay the insurance premium annually.

3. What is the service charge for the unit trust funds invested? Suspect it would be in the region of 5 - 6%, which is higher than the standard 2% you can enjoy from FundSupermart.