Employees Provident Fund (EPF) allows qualified members to make their own investment using a portion of their EPF savings for potentially higher returns. However, bear in mind that the risks for such investments are higher. Members are to bear these risks and EPF is not going to compensate if members suffer losses from the investment made.
Before you make any decision in investing your EPF money, please remember that EPF is oblige to give 2.5% return per annum. Make a comparison on the fund choosen past performance against EPF dividend prior to investing. View “Historical EPF Dividend Rates” for comparison purpose.
If you already made up you mind to invest then you have to follow the following guidelines,
- Members have not reached the age of 55 years.
- The maximum allowable invested amount is 20% from the excess money above the Minimum Basic Saving amount.
- Fund only can be invested through external fund managers appointed by the Ministry of Finance.
- Investments can be made at every three months from the date of the last transfer.
- Members are not allowed to do direct investment such as purchase shares directly from the stock market.
Item 2 above is subjected to
- Members must have more than Minimum Basic Saving amount or at least RM5,000 in Account 1.
- Minimum amount per withdrawal is RM1,000.
- The calculation is according to formula below.
Amount Allowable = 20% x (Account 1 – Basic Saving)
If you have online EPF i-account, you also can check the allowable withdrawal amount under “Withdrawal” menu or to be precise “Withdrawal Eligibility” menu.
Basic Saving Amount Table
Basic Savings is an amount of savings to be put aside in Account 1 progressively at various pre-determined age levels so as to enable a member to accumulate a minimum savings of RM120,000 at age 55 years.
| Age
(Years) |
Basic Savings
(RM) |
Age
(Years) |
Basic Saving
(RM) |
|---|---|---|---|
| 18 | 1,000 | 37 | 34,000 |
| 19 | 2,000 | 38 | 37,000 |
| 20 | 3,000 | 39 | 41,000 |
| 21 | 4,000 | 40 | 44,000 |
| 22 | 5,000 | 41 | 48,000 |
| 23 | 7,000 | 42 | 51,000 |
| 24 | 8,000 | 43 | 55,000 |
| 25 | 9,000 | 44 | 59,000 |
| 26 | 11,000 | 45 | 64,000 |
| 27 | 12,000 | 46 | 68,000 |
| 28 | 14,000 | 47 | 73,000 |
| 29 | 16,000 | 48 | 78,000 |
| 30 | 18,000 | 49 | 84,000 |
| 31 | 20,000 | 50 | 90,000 |
| 32 | 22,000 | 51 | 96,000 |
| 33 | 24,000 | 52 | 102,000 |
| 34 | 26,000 | 53 | 109,000 |
| 35 | 29,000 | 54 | 116,000 |
| 36 | 32,000 | 55 | 120,000 |
Examples How To Calculate The Allowable Investment Amount
| Member | Age | Savings In Account 1
(RM) |
Basic Savings (RM) | Computation: Savings In Account 1- Basic Savings x 20% | Member’s Eligibility |
|---|---|---|---|---|---|
| A | 22 | 4,000 | 5,000 | – | Not qualified as the savings is lesser than the basic savings required. |
| B | 22 | 8,000 | 5,000 | (8,000-5,000) x 20% = RM600 | Not qualified as the savings is lesser than required minimum investment amount of RM 1,000. |
| C | 25 | 20,000 | 9,000 | (20,000-9,000) x 20% = RM2,200 | Qualified as the savings is more than the basic savings and minimum limit. |
| D | 40 | 40,000 | 44,000 | – | Not qualified as the savings is lesser than the basic savings required. |
| E | 45 | 100,000 | 64,000 | (100,000-64,000) x 20% = RM7,200 | Qualified as the savings is more than the basic savings and minimum limit. |
List of Approved Fund Manager
List of Approved fund can be obtain in EPF website.
Documentations
Below are the required documentation to be submitted to the choosen fund manager
- Completed Form KWSP 9N (AHL).
- ‘Penyata Caruman Yang Boleh Dilaburkan’ statement – obtain from EPF office.
- Copy of Member’s Identification Card/Smart Card or Police Identification Card
Once a member’s application is processed, EPF will transfer the amount of savings that can be invested directly to the fund manager concerned within 21 days after the application is received by the EPF.
Exit from the External Investment
Once invested in the external fund, and later on you decide to end the investment, all the money including the profits have to transfer back to EPF account. Members are not allow to utilize the money for personal use.
More Information
If you need more information kindly browse through EPF website.
Its been a mystery as to why the EPF board has refused to allow contributors to use money in Account II to purchase H&S insurance. But they do allow withdrawals to pay for hospital bills for self. Its strange why withdrawals which have teh tendency to wipe out savings are allowed but withdrawals to pay for H&S insurance premium are not favoured.