In order to get your Malaysia My Second Home (MM2H) social visit pass, you will need to deposit a certain amount of money in Malaysia. The exact amount will depend on your circumstances (primarily your age) but at the time of writing is typically 300,000 RM (Ringgit Malaysia). For this you will need to open a Fixed Deposit account with more or less any bank in Malaysia. Of course, you will probably also want a current account, and perhaps a credit card too.
You’ll need your MM2H conditional approval letter before you can open any bank accounts here. Although in theory there are – so I’ve heard – some edge cases where it may be possible to proceed without your conditional approval; but it will almost certainly be a lot simpler if you have the letter. Certainly in my experience of trying, I was told by several banks that nothing could be done without it.
If you don’t already have a relationship with a specific bank, or a preference for one, it may be worth a quick look around to see who offers the best interest rates for your fixed deposit. But probably not worth agonising over it. You’ll most likely find that the absolute top-end deals are not available to MM2Hers (e.g. they’ll only be available to Bumiputera). Obviously you’ll want to avoid the low-end rates, but I found that most of the major banks were offering the same rates – at the time of writing these are typically around 2.9% for a one-year fixed deposit and 3.9% for five years. You may get a bit more if you can find a ten-year option, but the banks I spoke to were only able to offer me five years maximum.
You’ll probably find your bank recommends splitting your fixed deposit into two accounts – one at one-year and one at five-years. This is because the Malaysia My Second Home programme allows you to withdraw up to half of your fixed deposit after one year (I say half, but that could change – at the time of writing, 150,000 RM can be withdrawn after one year, and the other 150,000 must remain in place for the duration of your participation in the MM2H programme; I believe it used to be 240,000 and 60,000 RM respectively). Note however that you can only withdrawn funds needed for ‘authorised’ expenditure (e.g. house or car purchase, or medical or education costs), and then only on a reimbursement basis – i.e. you can’t just withdraw 150,000 RM and then go spend it; apparently you’ll need to show receipts or invoices etc. So I’m told – I haven’t got to that point myself yet.
I don’t know whether you can open a fixed deposit account and then separately (later) deposit funds into it. I believe not (and logically it would make sense that the two things must happen simultaneously). So unless you’re planning on bringing a suitcase full of cash with you to Malaysia (bad idea – aside from anything else, you’ll need to declare anything over 10,000 USD equivalent to Customs) you’ll need a current account to deposit funds into, before then opening the fixed deposit account(s).
Some international banks can arrange your Malaysian accounts while you are still in your home country. For example, I have accounts with HSBC in the UK and so could have asked them to handle the account opening in Malaysia for me. But as I was already in Malaysia by the time I got my conditional approval letter, I did it myself at my local HSBC Malaysia branch, in Bukit Bintang.
Opening bank accounts in person, in Malaysia, is fairly easy once you have your conditional approval letter, although it’s not necessarily quick. Given the amount you’ll be depositing, avoid the queues by going straight to their Premier banking (or equivalent) section. You’ll need to take your passport and letter along to a branch of your chosen bank, and there’ll likely be a lot of form-filling to be done – mostly by them at least, but it will take time.
For me, the process was to initially open a local current account, and Malaysia-based but GBP-denominated savings account. The theory behind this was that I could move GBP into Malaysia and then convert to MYR as and when the exchange rate looked good. Plus my (Malaysian) bank could offer me a preferential exchange rate once the money was in Malaysia. Another consideration was that, so I had read, there could potentially be problems moving large amounts of currency across borders, so my thinking was that I could move GBP across as and when, in modest amounts, and then once it was in Malaysia, convert it to MYR.
As it turned out, I needn’t have worried. In the event, the best exchange rate came from TransferWise. Having moved about two-thirds of the money I would need for my MM2H fixed deposit over to Malaysia, I ended up moving it back to the UK again and sending it in several tranches to TransferWise, for conversion to MYR and transfer to my Malaysian current account.
One good thing about banking with a truly international bank (HSBC in my case, but I assume others would be much the same) is their ability to make instant transfers between countries, at no cost if you’re not converting currency. So moving GBP from the UK to Malaysia and back again cost me nothing and happened instantly. In theory, TransferWise would have accepted GBP directly from my Malaysian GBP account – except that I couldn’t find any way to send it to them from there.
The actual TransferWise currency conversion and deposit in my Malaysian current account was very quick, albeit not instant. Once you’ve set up your transfer the app typically tells you your money will arrive in around 3-5 days; in fact my first transfer arrived same-day, and the other two arrived next-day.
One thing to note, in case you encounter the same with your bank: I found my UK bank had a £25,000 limit on transfers out of my current account (via online banking – even less via their mobile app), hence I split my TransferWise transactions into three. In theory I could have sent the whole lot across in a single transfer, but as TransferWise tells you to send the exact amount of GBP for each transaction, I didn’t want to risk splitting that and having something go wrong.
Once I had sufficient MYR in my Malaysian current account, I returned to my local branch and opened the fixed deposit accounts. This took about 30 or 40 minutes of mostly sitting around, but they did all the hard work, with me just having to sign about five or six pieces of paper (if, like me, you’re coming from the UK, you may be surprised by the sheer volume of printed paperwork involved in even the seemingly-simplest of transactions… we were there once; they’ll catch up eventually 😉
With the fixed deposits opened and the money moved across, I was given a deposit certificate for each account and a cover letter for the Immigration Department confirming that the deposits are under lien and can only be withdrawn with permission from the Ministry of Tourism. Hopefully whichever bank you go with should be familiar with this – pretty sure all of the big ones will be, but if you’ve found a particularly good deal with a smaller bank, you should check first that they understand the MM2H programme requirements, before committing. Your conditional approval letter will come with a sample letter in case your bank isn’t sure what to write.
I was also given a couple of certified copies of the letter and certificates, which saved me the trouble of copying them myself – you’ll need both the originals and a copy when you go to Putrajaya at the end of the process.
A few other things that might be useful to note:
- Your current account will likely come with a debit card, and optionally a chequebook. I chose not to have the latter, having not written out a cheque back in the UK for probably well over ten years. However, payment by cheque is more widespread here, and you may find one useful. Not everywhere accepts credit/debit cards for bill payments and the like. I haven’t yet encountered any problems as a result of not having a chequebook, but I have had to pay a couple of bills with cash (including in one instance having to withdraw several thousand ringgit from a nearby cash machine…).
- There’s a 1,500 RM per-transaction limit on ATM withdrawals.
- ATM withdrawals are not necessarily free, as they usually are in the UK. You’ll need to check your bank’s terms and conditions carefully. Some will give you a certain number of free withdrawals per month. Some will only be free if you use their own ATMs, or those belonging to specific networks. If/when you pay for ATM withdrawals, the fee will typically range from 1 to 8 RM.
- Credit and debit cards here have six-digit PINs rather than the four-digit ones you may be used to.
- You can open a credit card here, but you may need to open an additional fixed deposit to do so. Usually you would just need to prove a given level of income. However, in my case, I was told that my rental income back in the UK could not be taken into account – only employment income is considered. But of course under MM2H, you’re not allowed to take employment. The solution was to open a one-year fixed deposit (earning a decent rate of interest), on which the bank placed a lien such that I could only withdraw it subject to not having any outstanding credit card balance. Fair enough. My credit limit would be 80% of the amount deposited. So no big deal, but something to keep in mind – when you send your funds across for your MM2H fixed deposits, you may want to send some extra over as well to cover whatever credit limit you want, plus of course whatever you want to keep in your current account here. I don’t know whether this is specific to my bank, or whether they would all be much the same. I suspect it may have something to do with not having a credit history here in Malaysia, so perhaps things will be different after a year or so. It may also be worth speaking to your existing UK credit card provider(s) to see if they can transfer you to an equivalent product here, and carry your credit history with you. I vaguely recall that American Express can do that.
- JOMPay (“Jom” means “Let’s go!” or “Come”) is the national bill payment scheme, and the standard way to pay bills online, via mobile app, or at an ATM. Your utility bills for example will give you the information necessary to set up a payee in your online banking; you can then have the payment made instantly from your current account or credit card.
- Whenever you sign up for anything (bank accounts, credit cards, broadband, mobile phone contracts etc etc), check the terms and conditions very carefully, and confirm with the staff exactly what you’re committing to. I don’t know the exact details of whatever consumer protection laws exist in Malaysia (something for the to-do list on a rainy day, perhaps… ;-)) but they clearly don’t have the same requirements for transparency that we are used to in the UK. Look out for little extras that you didn’t sign up for on your bill…
Once you’ve got your bank accounts, and optionally a credit card, sorted out, you can join in with Malaysia’s national pastime – spending like there’s no tomorrow. Or not. Or you could get your medical examination done.