Does EPF Scam Us on Monthly Housing Loan Repayment Scheme?

I believe most of you know that we are eligible to withdraw EPF or KWSP money from account II for the purpose on buying new house or reducing loan amount or monthly loan repayment. I believe this is great facility offered by EPF.

However, I am shock when I come across an article where someone claim that EPF scam us if we withdraw money from Account II for monthly housing loan repayment.

When you apply for monthly loan repayment, point out that EPF will deduct the amount that you apply from account II and transfer it somewhere before they make monthly repayment to the bank. Since that money no longer in account II, you are no longer entitle to earn dividend for that sum which can be substantial if the amount that you apply is huge and longer repayment period. You can read more at for example.

If this is true, than it is better to withdraw the money as a lump sump rather than monthly repayment. Later on you can ask the bank convert it to monthly repayment.

If you have any experience on this matter, please confirm.

5 comments… add one
  • EPF has officially deny that. See .

    Anyway, it’s always better to opt for the annual withdrawal to serve as prepayment into the mortgage.

    • Anyway, it’s always good to check your annual statement to verify whether you’re paid your deserved dividend. 🙂

    • Thanks marx for point it out. This is an old rumors.


      The Employees Provident Fund (EPF) would like to state that members’ savings that have been kept aside in a separate account for withdrawals under Housing Loan Monthly Instalment Withdrawal will continue to receive dividends accordingly. This statement comes in response to recent emails and blogs that state the EPF does not pay dividends on the said amount.

      When a member’s application for Housing Loan Monthly Instalment Withdrawal is approved, the total amount of savings that will be taken out from Account 2 for the purpose of this withdrawal will be put aside in another account. The reason for this is to separate the amount from the main account, as funds allocated for this withdrawal cannot be used for other withdrawals from Account 2. In addition, it serves to facilitate as well as monitor the monthly payments.

      The EPF would like to reiterate any savings that are still with the EPF will continue to earn dividends annually up until the member reaches the age of 75. Accordingly, the savings that have been kept aside and are committed for withdrawals under Housing Loan Monthly Instalment Withdrawal will continue to receive dividends for the year. The dividends on this amount will be credited into Account 2 after dividend for the year is declared.

      In any case, the Housing Loan Monthly Instalment Withdrawal was introduced in January 2008 and as dividend for 2008 is yet to be declared, there is no issue of the EPF not paying dividends on the said amount. We hope that this statement will put to rest any confusion regarding this issue. The EPF wishes to assure its members that it is committed to protecting members’ interests and enhancing the value of their savings.

  • Check out first whether this david guy is a financial expert or not before we trust his writings. He may turn out to be just a very young fellow who searches the internet a lot but no financial qualifications.


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