Conversation Guide Structured Investment  ·  ESG Callable Inverse Floater  ·  5 Years
Structured Investment · ESG Callable Inverse Floater

When rates fall, your coupon rises.

Principal-protected, KLIBOR-linked deposit. Year 1 pays a fixed 6.90% regardless of rates; Years 2–5 pay more when KLIBOR falls — the inverse of a conventional floater.

Underlying KLIBOR 3M Tenor 5 years Minimum RM 50,000
Year 1 Return
6.90%
Fixed p.a. — no conditions
Year 2–5 Formula
5.4×(4%−K)
Floor 0% · Cap 10%
Principal
Protected
100% at maturity
Minimum
RM 50K
Tenor: 5 years
Section01The idea

The inverse angle.

KLIBOR is the temperature of Malaysia's banking system. When BNM raises rates, the temperature goes up. When BNM cuts rates, the temperature drops. Current KLIBOR is at 3.49%.

With a normal FD or Range Accrual, a rate cut hurts returns. With an Inverse Floater the opposite is true — when BNM lowers rates, your coupon goes up. It moves in the opposite direction to KLIBOR.

Inverse relationshipWhen KLIBOR drops, coupon rises
INVERSE RELATIONSHIP KLIBOR ↓ CUTS COUPON ↑ RISES When one side goes down, the other goes up
Section02Mechanics

How the product works.

01Year 1

Fixed 6.90% p.a.

Guaranteed, no conditions, no KLIBOR dependency. Paid quarterly.

02Y 2–5

The formula.

Coupon = 5.40 × (4.00% − KLIBOR). When KLIBOR drops, the bracket widens — coupon rises. When KLIBOR rises, the bracket shrinks — coupon falls.

03Floor

0% — you never owe.

If KLIBOR is at or above 4%, coupon = 0% for that period. Capital is unaffected.

04Cap

10% p.a. ceiling.

If KLIBOR drops to 2% or below, the formula caps at 10% p.a.

05Payout

Quarterly.

Receive interest every 3 months based on the prevailing KLIBOR for that quarter. Principal returned at maturity.

Section03Year 1

The magic of Year 1.

6.90% per annum — fixed, regardless of what KLIBOR does. Even if KLIBOR shoots to 5% on Day 2, Year 1 remains 6.90%. No ifs. No buts.

MetricYear 1 valueNote
vs best FD today+3.40%FD tops at ~3.50%
On RM 100,000RM 6,900In just 12 months
On RM 300,000RM 20,700Year 1 alone
ConditionsNoneGuaranteed fixed

Even if everything goes wrong from Year 2 onwards, 6.90% on the full principal is locked in for Year 1. That money is yours — paid quarterly. The rest of the 5-year period is essentially a bonus.

Section04Coupon by KLIBOR

Your coupon at different KLIBOR levels.

Annual coupon for Year 2–5 using formula 5.40 × (4.00% − KLIBOR). Floor 0%, cap 10%.

Coupon profileYears 2–5 · Floor 0% · Cap 10%
0% 2% 4% 6% 8% 10% 10% 2.00% 8.10% 2.50% 5.40% 3.00% 3.73% 3.49% TODAY 2.70% 3.50% 0% 4.00% KLIBOR Level
KLIBORFormulaAnnual coupon
2.50%5.40 × (4.00% − 2.50%)8.10%
3.00%5.40 × (4.00% − 3.00%)5.40%
3.49% (today)5.40 × (4.00% − 3.49%)3.73%
3.50%5.40 × (4.00% − 3.50%)2.70%
4.00%+5.40 × (4.00% − 4.00%) → floor0.00%
Section055-year scenarios

5-year return scenarios — RM 100,000.

B — Rate cuts
KLIBOR drops to 2.80%
6.56/yr avg
Year 1 (fixed)RM 6,900
Year 2–5 (RM 6,480 × 4)RM 25,920
Total returnRM 32,820
A — Status quo
KLIBOR stays at 3.49%
4.36/yr avg
Year 1 (fixed)RM 6,900
Year 2–5 (RM 3,726 × 4)RM 14,904
Total returnRM 21,804
C — Rate rises
KLIBOR rises to 3.80%
2.24/yr avg
Year 1 (fixed)RM 6,900
Year 2–5 (RM 1,080 × 4)RM 4,320
Total returnRM 11,220
D — Worst case
KLIBOR hits 4.00%+
1.38/yr avg
Year 1 (fixed)RM 6,900
Year 2–5 (floor)RM 0
Total returnRM 6,900

Even worst case still earns 6.90% in Year 1 plus full RM 100,000 principal returned at maturity. The downside is bounded.

Section06Why now

Why this could work right now.

The case

BNM expected to cut.Many analysts expect rate cuts in 2026–2027 as growth slows.
Global rate cycle turning down.US Fed has begun cutting; major central banks following.
FD investors fear rate cuts.If you hold FD and rates cut, your renewal rate drops.
Inverse Floater profits from cuts.Lower KLIBOR → higher coupon. The exact opposite reaction.
You are hedging against FD's biggest risk.

The big idea

FD investors fear rate cuts.
Inverse Floater investors welcome them.
If you believe BNM will cut — even once — this works in your favour.
Year 1 6.90% is locked regardless.Even if rates rise instead, Year 1 still pays the fixed coupon. Principal still safe.
Section07Versus alternatives

Inverse Floater vs FD vs Range Accrual.

Fixed DepositRange AccrualInverse Floater
Year 1 rate3.10–3.50%Up to 5.00%6.90% fixed
If rates dropLower on renewalNo direct changeHigher coupon
If rates riseHigher on renewalStill earns in rangeLower coupon
PrincipalPIDM protectedIssuer guaranteeIssuer guarantee
Best forSafety firstSteady earnerRate-cut believer
Fixed Deposit · 12 months
3.10–3.50%

Guaranteed fixed; PIDM-protected. Falls with BNM rate cuts on renewal.

vs
Inverse Floater · 5 years
6.90%

Year 1 fixed. Years 2–5 pay more when KLIBOR drops. Principal protected at maturity.

Section08Risks & suitability

What to know.

Good fit

Rate-cut believers.Expect BNM to cut in 2026–2027 and want to profit from it.
FD dissatisfied.Tired of FD rates and want meaningfully better returns with principal protection.
Patient capital.Can set aside RM 50,000+ for 5 years.
Capital protectors.Growth important, but losing principal not acceptable.

Risks & trade-offs

KLIBOR above 4.00%.Year 2–5 coupon becomes 0%. No interest for those years, but principal fully returned.
Early call risk.Issuer may redeem early. You get principal plus all earned interest to that point.
5-year lockup.Capital committed for 5 years. Early exit may not be possible.
Not PIDM protected.Backed by issuer credit, not government guarantee.
Credit risk.Returns depend on the financial strength of the issuing institution.
Section09Questions

Common questions answered.

What if interest rates go up instead of down?
Year 2–5 coupon would be lower or even zero. Principal remains fully protected, and 6.90% from Year 1 is already locked in. Even if Years 2–5 pay nothing, you come out ahead of holding cash.
Is the 6.90% Year 1 return really guaranteed?
Yes. Year 1 is a fixed coupon — it does not depend on KLIBOR or any market condition. As long as the issuing bank remains solvent, 6.90% p.a. is earned for the first 12 months.
Can the bank call this product early?
Yes. If called, full principal plus all interest earned to date is paid. Early call typically happens when the structure becomes expensive for the bank — which usually means you were earning well.
How is KLIBOR determined?
KLIBOR is set daily based on the rates at which Malaysian banks lend to each other. It closely follows BNM's Overnight Policy Rate (OPR). When BNM cuts the OPR, KLIBOR typically falls within days.
What does "ESG" mean for this product?
The structured deposit is linked to ESG-compliant securities and issuer frameworks — the underlying instruments adhere to Environmental, Social, and Governance standards.

For general information and educational purposes only. Not investment advice. Principal protection is subject to the creditworthiness of the issuing institution and is not guaranteed by PIDM. Past performance is not indicative of future results. Please consult your relationship manager for full product details and suitability assessment.

Conversation GuideStructured Investment · ESG Callable Inverse Floater · 5 Years
Structured Investment · ESG Callable Inverse Floater

When rates fall, your coupon rises.

Principal-protected, KLIBOR-linked. Year 1 pays a fixed 6.90%; Years 2–5 pay more when KLIBOR falls. Current KLIBOR is 3.49%.

Year 1
6.90%
Fixed p.a. — no conditions
Y 2–5
5.4×(4%−K)
Floor 0 · Cap 10%
Principal
Protected
100% at maturity
Tenor
5 yr
Callable. Min RM 50K

01.The idea

  • Year 1 fixed 6.90%. No conditions, no KLIBOR dependency. Paid quarterly.
  • Year 2–5 inverse formula. Coupon = 5.40 × (4.00% − KLIBOR). KLIBOR down → coupon up.
  • Floor 0%, cap 10%. Can never owe; maximum 10% p.a.
  • Principal protected 100%. At maturity, regardless of coupon outcome.
  • 5-year tenor. Callable. Minimum RM 50,000.

02.Coupon at different KLIBOR levels

KLIBORFormulaAnnual coupon
2.50%5.40 × (4% − 2.50%)8.10%
3.00%5.40 × (4% − 3.00%)5.40%
3.49% (today)5.40 × (4% − 3.49%)3.73%
3.50%5.40 × (4% − 3.50%)2.70%
4.00%+Floor0.00%

03.5-year scenarios · RM 100,000 invested

ScenarioKLIBORYear 1Y 2–5 (×4)Total / Avg
B — Rate cuts2.80%RM 6,900RM 25,920RM 32,820 / 6.56%
A — Status quo3.49%RM 6,900RM 14,904RM 21,804 / 4.36%
C — Rate rises3.80%RM 6,900RM 4,320RM 11,220 / 2.24%
D — Worst case4.00%+RM 6,900RM 0RM 6,900 / 1.38%

04.Why now

  • BNM expected to cut in 2026–2027 as growth slows.
  • Global rate cycle turning down — US Fed has begun cutting.
  • FD holders face lower rates on renewal if BNM cuts.
  • Inverse Floater profits from cuts — coupon rises as KLIBOR falls.
  • You are hedging against the very thing that hurts FD investors.

05.vs FD vs Range Accrual

FDRange AccrualInverse Floater
Year 1 rate3.10–3.50%Up to 5.00%6.90% fixed
If rates dropLower on renewalNo direct changeHigher coupon
If rates riseHigher on renewalStill earns in rangeLower coupon
Best forSafety firstSteady earnerRate-cut believer
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06.Risks & trade-offs

  • KLIBOR above 4.00%. Y 2–5 coupon = 0% for those years. Principal returns fully at maturity.
  • Early call risk. Issuer may redeem early — you receive principal + all earned interest.
  • 5-year lockup. Capital committed for 5 years.
  • Not PIDM. Backed by issuer credit, not government guarantee.
  • Credit risk. Returns depend on issuing institution's financial strength.

07.Who this is for

Good fit

  • Rate-cut believers. Expect BNM to cut in 2026–2027.
  • FD dissatisfied. Want meaningfully better with principal protection.
  • Patient capital. RM 50K+ for 5 years.
  • Capital protectors. Losing principal not acceptable.

Not suitable

  • Need liquidity within 5 years.
  • Require PIDM guarantee.
  • Expect rates to rise sharply.
  • Need predictable fixed income.

08.Common questions

  • What if rates go up instead? Y 2–5 coupon lower or 0%. Year 1 6.90% still locked in. Principal still safe.
  • Is 6.90% really guaranteed? Yes. Year 1 is a fixed coupon independent of KLIBOR or any condition.
  • Can the bank call early? Yes. If called, principal + earned interest paid.
  • How is KLIBOR set? Daily by interbank lending rates; tracks BNM's OPR.
  • What is ESG? Underlying instruments meet Environmental, Social, Governance standards.
For general information and educational purposes only. Not investment advice. Principal protection is subject to the creditworthiness of the issuing institution and is not guaranteed by PIDM. Past performance is not indicative of future results. Please consult your relationship manager for full product details and suitability assessment.
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