No cash to invest?

No Cash? Wait a minute, have you forgotten about your Provident Fund? For Malaysian, we call it EPF (Employee Provident Fund). EPF is like Hong Kong’s MPFA (Mandatory Provident Fund Fund Schemes Authority) and Singapore’s CPF (Central Provident Fund), it is meant to be a form of savings for our old age.

*links: http://www.mpfa.org.hk/eindex.asp, http://mycpf.cpf.gov.sg/Members/home.htm, http://www.kwsp.gov.my

Malaysian’s EPF consists of 2 accounts, i.e. Account 1 and Account2. Account 1 has 70% of your funds and the remaining 30% is in Account 2. Malaysian EPF members are now allowed to withdraw a small part of the funds from Account 1 to invest in selective Unit Trust managed by Unit Trust Management Company.

It is solely up to you to decide what do you want to do with your money. I am not very sure about other country’s Provident Funds but for Malaysian, you have a choice. Of course, there are only a few selected Unit Trusts that we can invest with our EPF funds, usually less aggressive local Unit Trust. For example, Public Mutual Berhad’s Unit Trusts: Public Islamic Balanced Fund, Public Regular Savings Fund, Public Money Market Fund, etc.

EPF does provide dividend return, you may refer to the screen shot below for the previous EPF dividend return against inflation rates.

Question: How much can you withdraw from EPF’s Account 1?
Answer: 20% of the amount in excess of $50,000. In other words, you have to at least keep $50,000 in your Account 1.

Example 1:
Nicole has $60,000 in her Account 1, she can withdraw
$60,000 - $50,000 = $10,000
20% of $10,000 is $2,000

Example 2:
Priya has $40,000 in her Account 1, she is not qualified for the withdrawal as she has to keep minimum $50,000 in the account.

Example 3:
Jasmine has $120,000 in her Account 1, she can withdraw
$120,000 - $50,000 = $70,000
20% of $70,000 is $14,000

Question: How often can you withdraw from Account 1 for Unit Trust investment?
Answer: Once every 3 months.

Question: More question?
Answer: You may send an email to me: anson.chng@gmail.com and I will personally explain to you in detail!

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