I believe the Malaysians who have a job know that their boss will help them to deposit 13% of the total salary in the Employee Provident Fund (EPF) every month, and the employee himself will also need to deposit 11% of the salary in Inside the provident fund.
An EPF account is divided into Account 1 and Account 2. Account 1 holds 70% of the deposits and most of the people consider this as their retirement fund because they are not allowed to withdraw from Account 1 if they have not reached the retirement age of 55 years old.
Account 2 holds 30% of deposits. The deposits in Account 2 can be used to buy a house, pay for medical expenses, education, etc. at any time. There are as many as 14 reasons to raise a deposit in a provident fund account! Let's check it out now!
Photo Source: The Online Citizens
1. Pay Off Or Reduce The Mortgage In One Go
EPF members can withdraw the deposits in Account 2 to pay off or reduce the mortgage balance.
2. Medical Expenses Of Yourself Or Your Child
Members can withdraw EPF deposits to pay for medical expenses for themselves or their children.
3. Education Purpose
Members can withdraw the deposit of Account 2 to pay for their own education or children's education expenses.
They can also apply for Account 2 to help pay back PTPTN.
Photo Source: New Straits Times
4. Loss of Working Ability
If the EPF member loses the ability to work, such as suffering from mental problems or disability, then the full deposits in the EPF can be withdrawn to use for their living expenses.
PS. A medical certificate is required.
5. Investment Purpose
Members can withdraw 20% of the deposit in Account 1 for investment, but the investment must come from an institution that is recognized by the Provident Fund Board.
6. Withdrawal Of Savings With An Account Exceeding RM 1 million
EPF members with deposits of more than RM 1 million can withdraw extra money beyond one million because having one million savings is enough for the basic needs of future retirement.
7. Immigration
If members want to immigrate to other countries and give up Malaysian citizenship, they can directly apply to the Provident Fund Board to withdraw all funds from their own provident fund accounts.
Photo Source: Forbes
8. Withdrawal Before Or After Retirement
EPF members can withdraw all or part of their Account 2 deposits when they reach the age of 50 to improve their lives.
9. PRIMA Housing
Only members who are eligible to purchase 1MDB housing under the PR1MA can use the funds from the Account 2 to pay the monthly mortgage.
10. Pay The Down Payment Of Housing
When a provident fund member wants to buy a house, he/ she can apply for a deposit of the provident fund Account 2 to pay for the down payment. (Only limited to no more than 10% of the house price and those who purchase a house for the first time)
11. Death
If a provident fund member passes away, the member’s family can apply to the provident fund bureau to withdraw all the deposits of the deceased, provided that the withdrawal person must be 18 years old or above and have a provident fund deposit.
Photo Source: Independent
12. Withdrawal for House Decoration
When a member needs a sum of money to decorate the house, they can apply to withdraw the provident fund deposit to decorate the house.
13. Pay For Monthly Housing Loan
Members can apply to withdraw their provident fund deposits to pay monthly house installments.
14. Retirement age 55, full withdrawal is available
When a provident fund member has reached the retirement age of 55 years old, they can apply for withdrawing part or all of their provident fund deposits. (Each person has only one opportunity to apply in his life).
Photo Source: Financial Express
*For more details, please click kwsp.gov.my to view*
*If you want to apply for withdrawal of deposits, you can go to the nearby provident fund bureau to inquire about the collection form and apply (remember to bring a copy of your personal IC card, remittance bank book, or bank statement certificate)
Cover Photo: CNA | Malaysia News
