Its a bit of conflict for myself to invest via my EPF monies. I guess EPF is doing a OK job for our investment money. I wouldn't say it's extremely well but at least every year we get more than 5% return pa. EPF had announced the dividend distribution of 5.8% for the investment of last y ear. Even 5% is already more than the return of fixed deposit standing at 3.7%. Don't forget your EPF monies are in one way or another capital guaranted.
Please don't use your EPF monies to invest into pure bond fund. Basically bond fund only gives you about 5%-8%pa and it's not guaranteed. There are bond funds that can lose up to 30% of it's investment. Don't forget about the sales charge too. Why take the risk to invest into a product that gives a non guaranted return of 8% when you can put it into a safe heaven that consistently give more than 5%?
Starting from year 2008, KWSP has cap the maximum sales charge of unit trust invested by EPF member at 3% only. Meaning investment by cash is charge about 5%-6% commission(sales charge) while by EPF is only charge at maximum 3% commission (sales charge). Then KWSP has gone the extra mile to reduce the minimum criteria for their members to be eligible to invest into unit trust. Don't forget also now we have more money into account 1 (70%) comparing to last time only 60% in account 1.
I guess KWSP is doing all they can to encourage their members to investment into unit trust funds. Wondering if you are eligible to use your EPF money for unit trust investment? Refer to below's table:-
Example: Assuming if you are 25 years old and assuming the minimum investment into unit trust is RM1000. Therefore you need to have at least RM20,000 in your EPF account (1 and 3) in order to qualify for withdrawing your EPF money for unit trust investment.
The calculation method is shown as below:-
P/S: I am so surpise so many people still doesn't know how much is the distribution of their EPF money in the different accounts. Below are copied from KWSP website.
Effective 1 January 2007, the Account is divided into two parts, namely Account I and Account II. Contributions received on your behalf from your employer will be credited into the two accounts according to the following percentages:
Account I - 70% of monthly contribution
Account II - 30% of monthly contribution
These accounts are created for different purposes, and different types of withdrawals are applicable on each accounts:
Account I Savings in this account is meant to be used for your retirement, and it cannot be fully withdrawn before you reach the age of 55, become incapacitated, leave the country or deceased (payment will be made out to your nominee / heir).
You are allowed to invest part of this savings to allow you to add the value of your savings.
Account II Savings in this Account is meant to help you to make early preparations for a comfortable retirement. Withdrawals are allowed for the purposes of:
Account II Savings in this Account is meant to help you to make early preparations for a comfortable retirement. Withdrawals are allowed for the purposes of:
Attaining the age of 50 years;
Owning a house - the downpayment for your first house;
Settling the balance of your housing loan - first house;
Financing education for you and that of your children's;
Medical expenses for you and that of your children's
Owning a house - the downpayment for your first house;
Settling the balance of your housing loan - first house;
Financing education for you and that of your children's;
Medical expenses for you and that of your children's
The EPF will not consider application for withdrawal from any account for purposes other than those stated in the current law as cited in the EPF Act 1991; EPF Rules and Regulations 1991; and EPF Circular and Procedure.
