How To Maximise Your EPF Return

Before we explore the secret of turning your EPF saving into a powerful cash generating machine, let's understand tour EPF in more details.

As you are aware, EPF contributions made by employee and his/her employer are paid into the employee's EPF account. Each account comprises of two sub-accounts:

• Account 1 - Savings for retirement at age 55. 70% of contributions are credited into this account.

• Account 2 - Savings that can be withdrawn for the purchase of a house, mortgage repayment relating to a housing loan, education, medical expenses and/or pre-retirement withdrawal at age 50. 30% of contributions are credited to this account.

Since 1996, under certain conditions, an EPF member is entitled to make transfer from his/her Account 1 balance to an approved Unit Trust Scheme(UTS). The latest revision of the withdrawal policy has been enforced on 1st Feb 2008.

The EPF will process a request to transfer certain amount from member's Account 1 to an approved UTS if:

• The Account 1 is not less than the predefined basic saving according to age group (Table 1)

• The member is less than 55 years old.

• An account in the approved UTS has been opened which the transfer can be process.

• No transfer has been made in the previous 3 months from the EPF Member's Investment Scheme.

• The amount eligible to transfer is not less that RM1,000.

• The amount to be transfered is not more than 20% of the Account 1 balance remaining after deducting the predefined basic saving (subject to a minimum of RM1,000)

Table 1. Account 1 Total Basic Saving



















After fullfilling all the above minimum requirement, you can start turning your EPF saving into a powerful money-making machine for your retirement. Let's look at the simulation below.

You are 28 years old, being paid for RM3,500 monthly of your job currently and has an accumulative EPF account 1 saving of RM30,000. Assuming that you start investing your EPF saving every 3 months and every year, into a UTS which offered a moderate annual return of 10% for the next 27 years, you will see the result simulation below.












You will have an extra of RM527,120 in your account when you retire at age of 55!
Thanks to the wonder of compounding interest, all this will be achieved passiveley by just investing 20% of your Account 1 balance into a UTS every 3 months.

The learning is simple. By investing your EPF saving into unit trust, you are going to expect an above average return in long run. If you start investing early, the possible return will be very much higher as the effect of compounding interest taken place. Of course, you will need to invest in good Unit Trust Scheme which managed by Professional Fund Managers.

So, what are you waiting for? Let's kickstart and move towards your ultimate dream of financial freedom.

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