Invest Unit Trust With EPF Saving
Employee Provident Fund or EPF saving can be used for investment if you are capable to outperform the dividend declared by EPF. EPF members can withdraw their EPF saving from Account 1 for investment in unit trust fund.
There are few criteria for you to withdraw and invest
- You have achieve the Basic Saving required in Account 1
- Minimum withdrawal is RM1000
- Invest 20% of amount in excess of the required Basic Saving in Account 1
- Invest through appointed unit trust fund company by Ministry of Finance
- You can only make second withdrawal after three months of your first withdrawal
Basic Saving Required In Account 1
|
Age |
Basic Saving |
Age |
Basic Saving |
|
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 |
Above are the Basic Required savings that you must have. You only can invest if you have the excess amount after deducting the require Basic Saving in Account 1. From the excess amount, you can invest not more than 20% of it and not less than RM1000 per withdrawal.
Let say, you are at the age of 35, your Basic Required Saving in Account 1 is RM29,000 and your account have RM40,000. That means you have (40,000-2 9,000) RM11,000 of excess. Out of RM11,000, you can invest 20% maximum or equal to RM2,200. You can make second withdrawal after three months from the amount of excess after deducting Basic Require Saving in Account 1.
In the second time withdrawal with the same age, Basic Required Saving in Account 1 is RM29,000 and your account have RM37,800 (after deducting the first time withdrawal). The excess amount is (37,800-29,000) RM8,800. Out of RM8,800, you can invest 20% maximum or equal to RM1,760.
Investing in unit trust fund will give better return compare to EPF if only you are smart and amateur investor. Bear in mind you might loss the invested money if you do not do survey first and just listen to unit trust agent and buy blindly.
It subject to how intellegent your fund manager is. My observation on unit trust market is that those fund managers are just employees. They need to earn for living. How can we ensure that they will act at our best interest. I really can’t count my retirement fund on them.
[Reply]
Mrcoolku Reply:
January 5th, 2010 at 10:01 pm
It is correct for a smart investor like you. I see that my not so high educated relatives are happy with the annual return rate of 10% or even 8%. They know nothing about investment. So unit trust agent is their angle. They cannot buy stock because no one help them to buy and monitor them. Therefore, I think unit trust is still good for certain people.
[Reply]
I agree with Mrcoolku on this matter. Some ppl just don’t have the time and knowledge to invest in shares.
So giving it to the Fund Managers to handle them will be a good idea for them rather then putting in the FD!
[Reply]
Lai Seng Choy Reply:
January 6th, 2010 at 9:56 am
Well, I believe continual learning is the key. Even for unit trust investment, investor also need to learn on how is unit trust operating rather than simply listen what unit trust agents are saying. Most importantly, they need to know what is true and what is false before putting their hard earned money to someone he/she doesn’t know.
May be you will ask, why am I seems to be so agaisting unit trust. Well, I trust the unit trust system, no doubt. But I do not trust the fund manager. I used to invest in a number of FAMOUS fund houses between 1999 and 2003. Sad to say that most equity funds were just doing at par when market was good then. But those fund manageres were still charging investors on high initial investment charges and annual management and trustee fees. They got everything and we get only what is left over, if any.
That is why we need responsible and intellegent fund manager to made our charges paid worthwhile.
[Reply]