What Are Islamic Term Deposits?
Islamic term deposits differ fundamentally from conventional fixed deposits by adhering to Shariah principles, which prohibit earning interest (riba). Instead, they operate based on profit sharing basis or sale-based contract such as Murabahah.
Commodity Murabahah is a structured process whereby the customer and RHB enters into an agreement to buy and sell commodities at an agreed profit margin. Your funds are used for this transaction, and you gain profits generated from the transaction, ensuring full Shariah compliance.
For example, if you open an RHB Commodity Murabahah Deposit-i, your deposit will be utilized for the trade transactions, and the agreed-upon profit is credited to your account. This model offers transparency, ethical investment, and guaranteed principal protection.
Features of Commodity Murabahah Deposit-i
Flexible Tenure Options
With Commodity Murabahah Deposit-i, you can choose a deposit tenure that aligns with your financial goals. Whether you’re saving for short-term needs like a vacation or long-term objectives like a child’s education, the flexibility of tenures—ranging from one month to several years—makes it an ideal solution.
For instance, if you’re planning to perform Hajj in five years, you could opt for a longer tenure to maximise returns while ensuring your savings remain secure.
Profit Payment Options
One of the standout features of Commodity Murabahah Deposit-i is its profit payment flexibility. Unlike Conventional Fixed Deposits that typically pay interest only at maturity, this product allows you to choose monthly, quarterly, half-yearly, yearly or maturity-based profit payments. Customers may also opt for Cash Upfront payment options in which the applicable tenure ranges from 3 months to 12 months.
Imagine this scenario: A retiree, Encik Ahmad, deposits RM100,000 in a one-year tenure and opts for monthly profit payments. These regular payments provide him with a steady income stream to cover his monthly expenses, while the principal remains intact. This feature enhances liquidity without disrupting long-term savings.
Shariah Compliance
For those prioritising ethical savings, Shariah compliance offers peace of mind. The Commodity Murabahah Deposit-i ensures transparency in its profit agreements and avoids elements of riba’ (usury). This ethical approach aligns with the values of Malaysians seeking an interest-free alternative.
Peace of Mind with Principal Protection
One of the biggest advantages of Commodity Murabahah Deposit-i is the guaranteed protection of your principal amount. For risk-averse individuals, this feature provides the confidence to save without worrying about market fluctuations.
For example, if Puan Siti deposits RM50,000 in a five-year tenure, she can rest assured that her original savings are secure while enjoying regular profits.
Benefits of Flexible Tenures and Profit Payment Options
Tailored Savings Strategy
The flexible tenures allow you to align your savings with specific financial goals. For example, short tenures are ideal for funding annual expenses, like school fees or vacations, while longer tenures help build wealth for milestones like retirement or home purchases.
Enhanced Liquidity
Regular profit payments provide a steady income stream, which can be especially useful for retirees or individuals managing monthly expenses. Instead of waiting for the deposit to mature, you can enjoy periodic payouts without touching the principal.
Financial Planning Made Easy
By offering flexibility in tenure and profit payments, Commodity Murabahah Deposit-i simplifies financial planning. Whether you’re looking to supplement your monthly income or grow your savings for a future goal, the options cater to your unique needs.
Ethical Savings Approach
Choosing an Islamic term deposit means you’re not only growing your wealth but also adhering to ethical principles. With RHB’s transparent processes, you can be confident that your savings are aligned with your values.
Why Choose Commodity Murabahah Deposit-i?
RHB’s Commodity Murabahah Deposit-i stands out for its customer-centric features, including:
- Competitive non-rate benefits like flexible tenures and profit payment options.
- A strong reputation in Islamic banking with a commitment to Shariah compliance.
- Tailored savings solutions that cater to diverse financial goals.
- Convenience as deposit placement or withdrawal can be performed at any time via RHB Online Banking.
Whether you’re saving for a child’s education, retirement, or a spiritual journey, this product offers a secure and ethical pathway to achieve your objectives.
How to Open a Commodity Murabahah Deposit-i Account
Opening an RHB Commodity Murabahah Deposit-i account is simple:
- Eligibility: Individuals aged 18 and above are eligible. Joint accounts are also available.
- Required Documents: Customer’s identification documents
- Application Process: Visit an RHB branch or apply through RHB Online Banking for added convenience.
Frequently Asked Questions
What is the difference between profit payment and interest?
In Islamic banking, profit payments are derived from Shariah-compliant trade or investment activities, such as the buying and selling of commodities, as practised in the Commodity Murabahah Deposit-i. This method ensures that earnings are generated through permissible business transactions. In contrast, conventional banking interest involves charging an excess amount on borrowed money, which is prohibited in Islamic finance.
Can I withdraw my deposit early?
Yes, early withdrawal is allowed. However, if you withdraw the Commodity Murabahah Deposit-i before its maturity date, no profit will be paid on the withdrawn amount, regardless of the number of completed months at the time of premature withdrawal.
How is the profit rate determined?
The profit rate for the Commodity Murabahah Deposit-i is fixed upfront and agreed upon at the time of placement. Under the concept of Murabahah, the agreed profit rate will be used to determine the selling price, which in turn determines the amount of profit that you are entitled to receive. To operationalize the transaction, a specific Shariah-compliant commodity is identified and used as the underlying asset for purchase and sale transactions, ensuring transparency and adherence to Shariah principles.
Is the principal amount guaranteed?
Yes, the principal amount up to RM250,0000 in the Commodity Murabahah Deposit-i is protected. Additionally, this deposit is safeguarded by Perbadanan Insurans Deposit Malaysia (PIDM), providing an extra layer of security for your deposit.
For more detailed information, please refer to the Product Disclosure Sheet
Conclusion
RHB Commodity Murabahah Deposit-i provides a secure and ethical way to grow your savings. With flexible tenures, profit payment options, and Shariah-compliant principles, this product is tailored to meet the diverse needs of Malaysian savers.
Ready to optimise your savings? Visit any RHB branch or our website and start your journey towards secure and ethical financial growth today.
