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Malaysian Government granted the approval in November 1996 allowing EPF contributors to invest a portion of their contributions with approved Fund Managers and in selected unit trust funds. This is a
move to encourage EPF contributors to manage their own investment - an empowering process to make members Knowledge Investors.
However, empowering
individuals without appropriate knowledge on investment, skills to
protect own capital, wrong system that incurs larger loss on long term
investment and erroneous mindset and beliefs, and relying on agents or
fund managers whose sole interest is to protect their own industry,
management fee and commission, result in many investors losing their
hard earned saving in the EPF.
There are some rules to regulate such investment scheme.
How Can Members Participate In The EPF Investment Scheme?
To be eligible:
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Your balance in Account 1 with EPF is at least RM 50,000.
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You can invest 20% of the amount in excess of this RM 50,000.
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You are below the age of 55
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Your investment of EPF monies is made with an approved Unit Trust/Fund Management Company.
Example :
- Todate your total EPF fund is RM 100,000
- Account 1 of EPF is 60% i.e. RM 60,000
- Deducting RM 50,000 from above (2.0) i.e. RM (60,000-50,000) -> Balance RM 10,000
- 20% of RM 10,000 = RM 2000. That is the maximum amount you can invest in unit trust.
- For the next round of investment, you have to wait for 3 months to start the same process again.
When you decide to sell the unit trust later, which you can do so anytime, hopefully the unit price appreciates (i.e. with a good profit, IF YOU ARE KNOWLEDGE INVESTOR) the sale proceed
will go back to your own EPF fund, not cash to you. The whole idea here is to increase our fund for our own retirement through
knowledge investing, with the view of much much higher rate of return compared with
what is offered by the EPF.
Again, words of caution, you cold
end up losing more money than that offered by the EPF interest, if you
do not have the knowledge, skills, systems and mindset take care of your
investment. In such situation, it is better you leave your money with
EPF.
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