Should You Sign Up for EPF’s i-Sinar?

The government just announced that all EPF members can withdraw their savings from Account 1 under the i-Sinar scheme. Previously, you had to meet certain requirements, like if you lost your job or got a pay cut, to get approval for withdrawing under i-Sinar. 

But from 8 March 2021, all applications for i-Sinar will be approved as long as you meet these 3 criteria:

  1. EPF member
  2. Under 55 years old
  3. Have a savings balance of at least RM150 in your EPF Account 1.

How much can you withdraw under EPF i-Sinar?

There are two withdrawal limits under i-Sinar: 

Account 1 balanceRM100,000 or less More than RM100,000
How much can you withdraw?Up to RM10,000, but you’ll have to leave at least RM100 in your accountUp to 10% of your savings or RM60,000, whichever is lower
How will you get the money?Transferred to your account in installments over six monthsUp to RM5,000 for first instalmentTransferred to your account in installments over six monthsUp to RM10,000 for first instalment

Should you withdraw your EPF savings under i-Sinar?

Many people have lost their income during the pandemic and had to start digging into their savings to pay for living expenses like rent, utilities and groceries. If this has happened to you, being able to take out your EPF savings can be helpful, especially if your emergency savings are running dry. 

But, if you haven’t lost your job or had to take a pay cut, and can still afford your living expenses or can manage by cutting out some expenses, taking out your EPF savings might not be a good idea. Your EPF savings is meant to be used for you to live on when you retire. 

Withdrawing from EPF before your retirement will reduce the amount of money you have for your retirement, so you should keep saving as much as you can, for as long as you can, to help make sure you can retire comfortably. 

Should you make EPF withdrawals to invest?

Some of us may also be thinking about taking out our EPF savings to make other investments for the chance of making higher returns. EPF recently declared a dividend of 5.2% for 2020. It also guarantees a minimum dividend of 2.5% a year and from 2011-2020, EPF paid an average dividend of 6.1%. 

Most other safe investments, such as fixed deposits and ASB, paid returns ranging from 1.8%-4.25%. Other investments like stocks could give you higher returns, but remember, investing in stocks is risky so there’s a higher chance you could lose some money. So, you’ll have to think hard about whether you want to take the chance of losing your money when you can get a good return from a safe investment like EPF. 

Withdrawing your EPF savings under i-Sinar can be a blessing if you need extra cash to make ends meet, but if it’s not used carefully, it can cause more harm than good. 

Always remember that your EPF savings are actually for your retirement, so if you can afford it, don’t touch your EPF savings until you retire. And if you need to make EPF withdrawals, make sure you only take out what you need and use it responsibly!

For more information on i-Sinar, visit https://isinar.kwsp.gov.my/

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