Invest EPF Money Directly in Stock Market



EPFRecently, we looked at the possibility to withdraw part of EPF money for personal investment. EPF makes it clear that we can only invest through external fund managers appointed by the Ministry of Finance and we are not allowed to invest the money directly in Stock Market.

However, recently I received an email from my stock broker, Jupiter Securities in partneship with Amara, offering me to directly invest in stock market with EPF money. A quick check, I find out that Amara is one of the approved external fund manager. I am not sure this is legal or otherwise.

Here are the details regarding the offer

  • Minimum investment amount is RM25,000 instead or normal RM30,000.
  • One time 3% withdrawal fee charged by Amara. Other fund may charged higher.
  • You can do as many “buy” and “sell” transaction as you want.
  • Waiver of Establishment Fee of RM300 by Amara.
  • You have a freedom to invest in any of your prefered stock.
  • The main benefit of this offer is there is only a one time withdrawal fee incurred, unlike Unit Trust investment. After the first withdrawal fee, you can “buy” and “sell” as many times as you like without incurring another withdrawal fee.

In the case of Unit Trust investment, you will be charged repeated withdrawal fee every time you invest in a fund. When you sell Unit Trust funds, the sales proceeds will be returned to your EPF account on the due date. Hence, it is not easy to “trade” Unit Trust investment to make profit in view of the high transaction costs involved.

Fee structure table

No
Items
Fee Details
1
Estabishment Fee
RM300 – WAIVED
2
Transaction Fee
0.10% or min RM15 per contract
3
Handling or Withdrawal Fee
3% from EPF withdrawal
4
Management Fee
First RM50k – 1.5% pa
RM50k to RM500k – 1.25% pa
RM500k to RM5 million – 1% pa
Next RM5 million – 0.75% pa
5
Exit Fee
No exit fee if more than 12 months
2.5% on withdrawal times time left to 12 months
6
Processing Dividends
1% – min RM5, max RM100
7
Right Issue Application
RM20 per application
8
Warrant or Loan Stock Conversion
RM20 per conversion
9
Execution of Proxy Form
RM10 per form
10
Cash Offer Acceptance
RM20 per acceptance
11
Custody fee
0.5sen per 1,000  shares per month
12
Jupiter Securities Brokerage Fee
0.1% or min RM10 per contract

Note 1 – Items 6 to 11 are External Fees for Nominees Account
Note 2 – Items 1 to 11 are charged by Amara
Note 3 – Item 12 is charged by Jupiter

By looking at the fee, the amount is quite substantial especially on the Management and Custody Fee. Because of that I don’t think I will participate. Furthermore, I don’t want to loose of my retirement fund because of the risk in Stock Market Investment is comparatively high. At least I can gain guaranteed 2.5% pa in dividend if the money left with EPF.

More information can be found at Jupiter Securities webpage.


Leave a Comment

  • John Ali 2nd August, 2010, 12:44 am

    it is good to invest in the stock market but you must be very careful and not speculate on rising stocks.”::

    Reply
  • Chong Kong Hui 2nd October, 2010, 1:36 am

    How good are you in Invest in Stock Market?

    If you are very good (can get CAGR of 10% and higher), try to get as much money out from EPF account I and account II using various withdrawal scheme.

    If you are good (CAGR 7% and higher), get some money out.

    If you are not good, keep it in EPF.

    Check my blog for more sharing.

    Reply
  • KCLau 28th June, 2011, 11:55 am

    Philip Capital also provide similar service through their wrap account.

    Reply
  • Nasser Hourmain 9th September, 2011, 11:00 am

    AskMeHow to withdraw your EPF account1 to buy KLSE stock. Minimum investment RM10,000 using Apex.

    TQ
    Nasser
    Apex Consultant
    HP: 0122489615

    Reply