Should you take out your FD?

Bank Negara Malaysia (BNM) has cut the overnight policy rate (OPR) to record low levels, which has resulted in lower fixed deposit (FD) rates at all banks in the country. This has forced many investors to scramble for higher yield investments such as stocks, otherwise their investment objectives may not be met. — The Edge (Link)

Short answer, yes and no. The intention of taking out your FD matters for this. In economics, when the central bank cuts interest rates, consumers will take out their money and consume as the returns are lower. However, this is also conditional upon that they expect inflation to increase. In layman terms, the more we buy things, the higher the demand, and prices increase as more people demand for things. So, when price increases, we are more incentivised to spend now and that drives prices up again. If you are benevolent enough to support the overall economy (which noone thinks about anyway), errr yes, yeah I want to say yes, take FD out and spend. 

If you think you can get a higher returns in the form of stock market investments with the same amount of risk (read, SAME amount of risk), sure, go ahead. But if your intention is to GAMBLE in the stock market, lock your bank vault doors cause it’s not going to be pretty. What you are doing is not helping anyone that needs it, it helps corporations get higher share prices. When you gamble, someone has to win and someone has to lose. It is a zero sum game. In the end, the more sophisticated and richer investors profit and not ordinary people like us. The house always wins.