There are lots of EPF features that have been introduced over the years & this is by far one of the best features by EPF for individuals that do not know what to invest in but want to earn higher interest than a fixed deposit. In Malaysia, we have been introduced to many types of modern investing platforms such as Robo-advisors with the aim to make investing as simple as possible. The problem is that some people are afraid to invest in those platforms despite them being approved by the Securities Commission of Malaysia. The reason is, they are afraid to invest since they are not aware of the product details & they are also worried about the risk since they are not familiar with it.
That has resulted in many people taking their money & deposit it in fixed deposits since it is familiar and secure plus they are willing to settle for a lower interest. As of my writing, fixed deposit rates in Malaysia are currently between 2.4%-3.1%. This means that, if you invest RM60,000 in fixed deposits for a period of 12 months, you will earn between RM1,440-RM1,860 depending on the bank you are investing in. If we are looking at other investment platforms such as StashAway Simple, they are projected to pay you around 3.3% per annum. Aside from that, Touch’nGo Goinvest is projecting to pay you around 3.7% per annum. The good thing about both platforms is, there is no lock-in period & the minimum amount is as low as RM10. What I like about Touch’nGo Goinvest is, they are paying you daily interest.
Aside from that, with the introduction of EPF Self Contribution, I find that this should be invested in & explored by Malaysians as EPF is truly a good platform that provides a steady investment return consistently over a long period of time. It is open to all Malaysians & permanent residents registered as EPF members whether they are employed or self-employed. If we look at EPF return over the past few years, their average return is between 5%-6% while fixed deposit rates were never that high over the past few years period. But for Malaysians that are looking for secure investment & higher interest, this is definitely a good choice for you.
Since EPF is under the Malaysian government, it is safe to say that your investment is in safe hands. You can make your contribution by using the i-Akaun mobile app or website. The minimum contribution amount is RM10 while the maximum contribution amount is RM60,000 per annum. Imagine if you are contributing the full amount of RM60,000, you are projected to earn between 5%-6% which is between RM3,000-RM3,600. That is way more than what you can earn by putting your money in fixed deposits. What makes it even better is, you can contribute anytime with a minimum of RM10. So if you plan to maximize the total contribution of RM60,000 & plan to split it into monthly contributions, you can pay RM5,000 each month. I know RM5,000 can be too much for some people but it is just my simple calculation guide to show how can you hit the maximum contribution of RM60,000. You can just contribute the amount based on your monthly budget. It can be as low as RM10 or even RM500 a month.
Since it is under EPF & it is meant for our retirement, you can only withdraw your money when you are 55 years old & above. That means you can withdraw the money for any emergency usage unless it complies with EPF withdrawals policy. So if you are planning to allocate some money to contribute to your EPF account, make sure you have another emergency fund as well just in case you need them for emergencies. My recommendation is, you can treat EPF’s voluntary contribution as a long-term & safe investment for your retirement if you are not looking to explore other investment apps or platforms that are not familiar to you. You can also use other apps such as Touch’nGo GOinvest which offers higher & daily interest for a better option compared to fixed deposits to have a balance of emergency cash & retirement savings.
OSS!
You can also check out my latest YouTube video on Why Do You Need Financial Planning?
