The EPF Account 3, also called “Akaun Fleksibel” or “Flexible Account” was announced on 25 April 2024 and implemented on 11 May 2024 as an alternative option for members to meet their immediate short-term financial needs, making it a great tool for financial planning and investment. In this guide, we’ll go over how to make the most out of your EPF Account 3 and how you can use it to diversify your investment portfolio. Without further ado, let’s look at how EPF Account 3 can help you in your financial journey!
What is EPF Account 3?
EPF Account 3 is a new addition to the existing EPF (Employees’ Provident Funds) investment scheme. This flexible account allows members to withdraw their funds at any time, unlike Accounts 1 and 2 which have stricter withdrawal conditions. Let’s go over the different accounts and the purposes for which you can withdraw from each of them.
Account 1: Akaun Persaraan
This is the main retirement savings account, and usually cannot be withdrawn from unless members reach retirement age, become permanently disabled, or emigrate and leave the country. Before the implementation of Account 3, 70% of each member’s total contributions each month went into Account 1, but with the new account, the split is now 75%.
Account 2: Akaun Sejahtera
This is a secondary account which can be withdrawn from for long-term financial needs, such as housing loans, Hajj pilgrimages, education and medical expenses. The procedures and limits for how much you can withdraw are different based on the purpose. Before the implementation of Account 3, the percentage of contribution in Account 2 was 30%, but with the new account, the split is now 15%.
Account 3: Akaun Fleksibel
This account provides flexible withdrawals for short-term financial needs, with a 10% split of members’ monthly contributions going to this account. Members can withdraw from Account 3 for any purpose but are encouraged to do so only for emergencies and immediate needs.
How Much Can I Withdraw from EPF Account 3?
You can withdraw funds from EPF Account 3 online through the KSWP i-Akaun App, and the amount will be transferred directly to your bank account within seven working days. Withdrawals can be made once per day, with a minimum amount of RM50. For withdrawals over RM250, identity verification is required. This can be done online for amounts up to RM10,000, or at an EPF office with thumbprint verification for amounts over RM10,000.
Until 31 August 2024, members below 55 years old can choose to transfer one-third of their savings from Account 2 to Account 3. If you don’t opt for this transfer, your Account 3 balance will start at RM0.
Investment Opportunities with EPF Account 3
With the flexibility of Account 3, you can use your funds for investing. EPF dividends and returns are generally stable and dependable. However, you can diversify your investment portfolio by investing in reliable products like Funding Societies’ Guaranteed Investment Notes.
To learn more about our Guaranteed Investment Notes, and how to register for an investor profile, check out our article Guaranteed Investment Notes: Explore Financial Opportunities with Funding Societies.
Benefits Of Investing With Funding Societies
Why should you choose to invest with Funding Societies?
- Low entry barrier: We make the concept of SME Debt Investment easy for you to understand, and investment starts from a minimum of RM100.
- Protected interests: A trustee agency manages investors’ money, ensuring peace of mind.
- Seamless investor experience: E-sign your contract with no printing and no mailing.
- Convenient mobile app: Invest and review your portfolio anytime, anywhere.
- Auto-invest: Set your preferences and let the system auto-allocate investments for your convenience.
Being Financially Responsible
With the introduction of Account 3 as a withdrawal option, there is now more flexibility in managing EPF funds. However, maintaining financial responsibility is crucial to ensure long-term security. Even though Account 3 only holds 10% of your total EPF funds, withdrawing too much and too frequently from this account can reduce your retirement savings. To avoid this, consider making extra contributions to your EPF when you have extra funds.
Additionally, be sure to understand the risks of investing like market changes, inflation, and interest rates. Diversifying your investment portfolio by including a mix of stocks, bonds, real estate, and mutual funds can help manage these risks. Investing in different regions and sectors, and balancing higher-risk investments with safer options like the EPF investment scheme, are common best practices. This approach aims to secure a financial future while maximising retirement savings.
EPF Account 3 offers flexibility for immediate financial needs and investment opportunities. By using this account wisely, you can balance your immediate needs with a long-term financial plan, strive towards your financial goals and prepare for the future.
Ready to make the most of EPF Account 3? Explore the investment opportunities with Funding Societies Malaysia. Whether aiming for returns, diversifying your investment portfolio, or supporting local businesses, Funding Societies can help. Sign up for an investor account today!
