Lesson 3: AER - Truth Revealed! Fixed Deposits Annual Interest Rate

Again, please read the basic difference between APR and AER before continue reading the below.


Refer to the annual interest rate for Maybank FD rates.

Assume RM 30,000 placed as FD for period of 1 month. Principal and interest will be credited to savings account after maturity.


Your earned interest would be RM 73.97 by the end of the month


You asked, how come? If it's 3% per annum, monthly interest rate based on principal of RM 30,000 should (3/12)% x 30,000 = RM 75.

Lesson 2: APR - The Real Cost of Credit Card Annual Interest Rate

Read the basic difference between APR and AER before continue reading the below.

Refer to the annual interest charges for Maybank credit cards.

Assume you are one of those who constantly spend more than you earn and frequently misses your payment, putting yourself in Tier 3 bracket of 17.5%.

Say, you have outstanding balance of RM 10,000, so you'll think (I did previously) that, even if I don't pay a single cent for the next 12 months, by the 13-th month, I would need to pay 117.5% x 10,000 = RM 11,750. Or, you think, every month, I will be charged a monthly interest of 17.5% /12 = 1.4583%

Not quite that simple. Confused? Let's solidify the concept with an example below.

Remember, you get your credit card statement monthly - your outstanding balance plus interest incurred previously will be carried forward to the subsequent month. That means, the compounding period is monthly!