Understanding Types Of Investment In Malaysia

Key Points

  1. Be well-prepared before investing, such as having sufficient funds and knowledge.
  2. Understanding and choosing the most suitable investment for yourself.
  3. Feel free to ask for help if you ever need advice on investment.

The stock market is full of temptations for young investors. They dream about quick profit, but it’s important to know that investing demands stability and patience before you can reap rewards in this business venture, especially if there are risks involved like losing your money!

Before starting to invest, having an emergency fund of at least three to six months’ salary is essential. You should also make sure that you’re able to take care of your usual monthly expenses and have enough left over for anything unexpected. Click here if you need to understand investment.

The word “investment” has many meanings, but in essence it refers to any asset created with the intention of allowing money to grow. In order to choose the right investment, it’s important that you know what kind of funds they are and how these investments work in Malaysia.

Types Of Investment In Malaysia

There are a few types of investment in Malaysia that you should know before choosing one to invest.

  • Fixed Deposit
  • Unit Trust
  • Investment-Linked Insurance Policies (ILPs) / Insurance
  • Stocks and Shares
  • Gold
  • Cryptocurrency
  • Private Retirement Scheme (PRS)
  • Robo Advisors
  • Real estate

We are going to talk more about each investment below.

Fixed Deposit

Commonly known as FD in Malaysia, fixed deposit has been considered one of the safest options for beginners because you’ll be guaranteed a return as long as your money remains invested in this type and term.

When you withdraw your fixed deposit before it matures, there is always the chance that interest rates might decrease and any penalties could be imposed.

It is recommended for those who want an easy and low risk investing option. Fixed deposit may be your best bet. Check here for more details on fixed deposit.


  • Minimum Risk
  • Guaranteed Return
  • Ease to use


  • Low interest rate
  • Withdraw before mature might have penalty

Unit Trust

Unit trusts are one of the most popular investment options for investors looking to diversify their portfolio without having too much trouble. These funds hold assets, with profits that can be given directly back into your pocket instead of reinvestment! Therefore, unit trusts are suitable for those who want to invest in a long-term and stable way.

The unit trust is an ideal way for investors to invest in different assets and gain exposure. With multiple investors contributing their cash, it becomes easier than ever before to not only manage your money but also diversify its risks by investing across many industries or market sectors with one fund!

To lower the cost, you can opt to manage your own funds. Otherwise, you’ll have to pay management fees and transaction fees for your agent if you have one.


  • Portfolio diversification
  • Low starting capital
  • Multiple unit trust to Choose


  • Fees can add up
  • Harder to choose if investing individually
  • May not be as liquid as other investments

Investment-Linked Insurance Policies (ILPs)

ILPs combine life insurance and investment features to provide convenience for both financial planners who want an all-inclusive package. ILPs can provide a death benefit or if included, total and permanent disability (TPD). The higher sum assured is combined with units in the sub-fund at that point.

The funds you invest in are completely under your control. You can withdraw any amount at any time if needed! As you age, your insurance costs may increase. Instead of increasing premium, insurance company will deduct the money from your investment account
Getting life coverage and starting to invest can both be done in one shot thanks to ILPs. However, if your concern is on insurance coverage only, this might not be the most suitable plan for you.


  • Get both coverage and investment in one sum
  • It is flexible to withdraw funds


  • Higher premium and charges
  • Returns is not guaranteed

Stocks and Shares

Stockholders are partial owners of the company. A stock represents their share in its earnings and assets, so they get a cut when things go well for an organization

This is one of the higher risk investments. Investing in the stock market is a great way to make money, but it comes with some risks. Before investing your hard earned cash into stocks and shares, you should do research on the stock market.

If you’re a beginner and have no knowledge about investing, don’t get started with stocks right away. However, if you are willing to put in the time researching potential companies that interest YOU, the stock market might provide you a great rewarding investment.


  • Higher potential return
  • Buy and trade easily
  • Income from dividends


  • Volatile in short time
  • Require many research and analyze
  • High risk

Gold Investment

Gold investment accounts are a lucrative way to diversify your portfolio without having any physical assets. Gold has been beneficial for those who want stability and diversity within their investments while still maintaining an overall positive outlook on life through diversification with other product types like stocks or bonds.

Gold is a great investment for those with low risk appetites and moderate cash reserves with some long-term stability. You can understand more about gold investment here.


  • Stable long term investment
  • Easy to buy
  • Able to receive as cash or gold


  • Does not generate interest
  • Do not expect quick return


Cryptocurrencies are a new, revolutionary way to transfer money without relying on banks or other third parties. They’re also completely secure and decentralized which means there’s no actual coin, just software (crypto wallet) stored on computers around the world!

In short, cryptocurrency is a digital currency powered by blockchain technology. Some popular crypto currencies are Bitcoin, Ethereum, Ripple, Litecoin etc.

Cryptocurrency is a risky investment, as the prices may fluctuate within hours. The digital world is a complex and fast-paced one, so if you plan on getting into cryptocurrency it’s important for your risk appetite to be high. You need to know about all of the digital world trade movements.


  • Potentially higher return
  • Easier transactions globally
  • Blockchain networks are secure


  • High fluctuation
  • Require knowledge of the cryptocurrency market

Private Retirement Scheme (PRS)

Helping you save more for your retirement, the Private Retirement Scheme (PRS) is a voluntary long-term savings and investment scheme.

The future of your money is in safe hands with the Private Retirement Scheme (PRS). You can invest according to how much risk you’re willing to take, and it’s regulated by the Security Commission too!

If you are planning for retirement and would not need to withdraw your investments before that, then PRS is a good investment.


  • Easy investments
  • Tax Incentive
  • Designed for retirement


  • Withdraw before age 55 will result in tax penalty

Robo Advisors

Robo Advisors are digital financial advisors who offer personalized financial advice and manage your investments with minimal human intervention. These robo-advisors will typically manage your investments for you.

Some of the famous platforms in Malaysia include StashAway and MYTHEO have become popular among investors. The low minimum investment amounts and easy withdrawals make these platforms perfect for those who want to invest but don’t have a large amount available.


  • Low starting investment fee
  • Diversification of portfolio
  • Passive investing


  • Won’t be able to control investing method
  • Limited customization

Real Estate Investment

Real estate investing is a business strategy that some people use to make money. It’s not just about buying and flipping houses, though those are part of it too! In essence, real estate investors buy any sort or property with the goal in mind for themself. They’re looking at generating income from its sale rather than using this as their primary residence

This can be any land or building that is usually immovable but transferable. No matter how big or small the property, real estate will always generate more than enough returns for what it costs!


  • Hedge Against Inflation
  • Tax Benefits
  • Value Appreciation


  • High maintenance and management
  • Market is not efficiently allocated
  • Require huge amounts of money to invest


Always do your research before investing money, don’t be afraid to ask for help if you need it. Make sure that any opportunity sounds too good to be true and should do more research on it. If done right, then the long run will reward those who take risks with investment opportunities.

Investing requires time and knowledge. The best thing you can do is take time and think things through before making a decision. Remember, don’t rush into anything just because some so-called ‘investment gurus or master’ tells you to buy. You might regret that.

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