It has been reported that the Employees Provident Fund's (EPF) much-anticipated Account 3 will soon be launched for members and is expected to comprise 10% of future monthly contributions.
Unlike Account 1 and Account 2, where withdrawals are restricted only to retirement or special purposes, Account 3 allows members to withdraw at any time like a savings account and will replace the implementation of EPF-targeted withdrawals such as the ones initiated by the government during the height of the Covid-19 pandemic.
According to the New Straits Times, only contributions from May onwards will be used for Account 3, while existing funds in Accounts 1 and 2 will be untouched. This means Account 3 will start with a zero balance.
Image Credit: NST
At the moment, 70% of members' monthly contributions are channelled into Account 1 while the other 30% goes into Account 2. The new system will split monthly contributions three ways:
- 75% into Account 1,
- 15% into Account 2, and,
- 10% into Account 3.
Although contributors can withdraw funds from Account 3 at any time, the EPF is understood to allow members who want to maximise capital gains to transfer the funds from Account 3 into Accounts 1 and 2.
However, it is worth noting that the NST was made to understand that members who do not withdraw from their Account 3 might get a "token" payout much lower than the dividend for Accounts 1 and 2.
Stay tuned for more updates coming in the future!
Featured Image Credit: Malay Mail