Are Banks Really Helping Us Grow Money?

Written by: Sr. KC Law, Principal & Valuer at Action Real Estate & Valuers

Q: Can your money really grow in the bank?

The market fixed deposit offered by banks in Malaysia are currently around 4% per annum.

On the other hand, what is the annual inflation rate in Malaysia?

A rate of 3% – 4% as published by the authority?

The recent hike in RON95 petrol price from RM 2.10 to RM 2.30 on the 1st February 2017, the % increase is already above 9.5%.

The recent parking charges in Bangsar increased from 60 cents to RM1, the % increase is above 66%.

These are some examples of price hikes around us. The list is too exhaustive to be mentioned here.

 Is the bank really helping you grow your money? and are you able to ride the tides of inflation? 

Is there a better way to hedge your money against inflation? Do you want to WIN over inflation? 

Surely everyone wants to be a winner and certainly do not want to be a loser. But the fact is, saving all your money in the bank is behaving like a loser.

Instead of saving all your hard earned money in the bank, why not consider investing some of your hard earn money in a reasonable yield property with capital appreciation potential.

What is a reasonable yield property?

Look for an investment property that give you about 5% yield. (The details of rental yield calculation is in earlier article here. More information on improving rental yield here). That is already above the 4% fixed deposit interest rate offered by banks.  

What about capital appreciation?

Capital appreciation means the value of the property increases over a period of time from the date of purchase. If you purchase the property for say RM250K 2 years ago and now you can sell it for RM300K. That means the capital has appreciated 20% over 2 years

If we keep the same RM250K in the bank as fixed deposit. Would any bank to our knowledge gives us a 2% extra on top of the principal sum of RM250K apart from the contractual 4% interest per annum.

The answer is always a definite NO.

Then why is it that so many people still keep ALL their money in bank to see it reduce in value over time?

The answer can be FEAR: Forget about Everything And Run. Unfortunately they are running to a place called bank that will only make the VALUE of their money smaller by the day!

The real reason could be a lack of knowledge in property investing.

“An investment in knowledge pays the best interest.”


What are some fears that are holding you back today? 

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About the Author


Sr. KC Law is a Registered Valuer, Estate Agent and Property Manager with The Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVEAP) of Malaysia. KC Law is also an electronic engineer registered with the Board of Engineer Malaysia (BEM) and received his engineering training from Tunku Abdul Rahman College Malaysia and later at Hatfield Polytechnic United Kingdom. In the 1990’s he was involved with the digital transformation of Telecommunication infrastructure for Maxis and Telekom Malaysia. His passion for Real Estate in the 2000s led him to practice as a real estate negotiator in Ace Realty and later valuation and property management in Rahim & Co International. Several years later he founded Action Real Estate and Action Valuers & Property Consultants. His areas of expertise are in Real Estate Agency, Property Valuation, Property Management and Business Valuation. He is Member of The International Association of Certified Valuation Specialists of Canada, Member of Royal Institution of Surveyor Malaysia and Member of Malaysia Institute of Estate Agents.