EPF i-Sinar allows members to access to RM10,000 (or more!) from EPF Account 1 as relief from losing jobs or income. Gain insights on how to apply for i-Sinar, when will i-Sinar withdrawal be paid or banked in, and whether to apply for i-Sinar for investing.
Updated: Feb 18, 2021 with simplified i-Sinar approval withdrawal and most conditions removed.
Contents
EPF i-Sinar Withdrawal
- i-Sinar purpose: EPF to help members who have lost their jobs, on no-pay leave or have no other sources of income
- EPF members who will benefit: 8 million (initially 2 million)
- Total estimated value of funds: more than RM56b (to be confirmed latest value)
Funds treated as “advance”
- Funds accessed is treated as an “advance”.
- Funds taken must be returned fully to EPF Account 1 where 100% future EPF contributions will go into EPF Account 1.
- After contributions go back to amount advanced, EPF contributions revert back 70% to Account 1 and 30% to Account 2.
- No timeline for members to replenish accounts.
Who is not qualified for EPF i-Sinar
- Non-EPF members
- Member aged 55 years and above
- Account Balance 1 less than RM150
“This facility is not a withdrawal but rather an advance with members needing to replenish the amount withdrawn,” ~EPF CEO, Tunku Alizakri Alias
EPF i-Sinar Funds Access Process
“The removal of conditions will allow EPF members under the age of 55 to withdraw from their Account 1 funds, subject to their existing balance. For members who have already applied for i-Sinar under the current criteria, their applications will be automatically approved in due course” ~Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz
How to apply for i-Sinar
Apply online or check application status: i-Sinar (kwsp.gov.my)
- Previous Category 1 Application: open Dec 21, 2020
- Previous Category 2 Application: open Jan 11, 2021
- New simplified withdrawal process: open Mar 8, 2021
| EPF Ac 1 Balance | Max Withdrawal (RM) | First Withdrawal Example (RM) | Remainder Withdrawal Example (RM) |
|---|---|---|---|
| RM100,000 below | 10000 | 5000 | 1000 x 5 mths |
| Above RM100,000 | 60000 | 10000 | 10000 x 5 mths |
How much will be received for for i-Sinar withdrawal
- Funds will be credited staggered over 6 months starting from 1st crediting month
- Total advance capped at 10% or 60,000 (whichever lower):
- EPF Ac 1 Balance <=RM100,000 : up to RM10,000
- EPF Ac 1 Balance >RM100,000: up to RM60,000
- First advance will be higher amount:
- EPF Ac 1 Balance <=RM100,000: up to RM5,000 + remainder over next 5 months
- EPF Ac 1 Balance >RM100,000: up to RM10,000 x 6months
EPF i-Sinar FAQ
Q: Will EPF be forced to dispose some holdings to pay out for i-Sinai?
A: Yes. EPF was already increasing cash holdings by end 2020 from the usual 5% to 7%. The Star estimates total withdrawals of RM56b.
RM56b of RM925b (total AUM) = 6% i-Sinar withdrawals. Assuming 5% is the normal withdrawal rate, EPF would need to dispose ~4% of assets.
Q: Should you apply for i-Sinar if your income is affected?
A: Yes if you are affected and to ensure sustainability during this pandemic.
Q: Should you apply for i-Sinar if your income is not affected?
A: No if you are spending on wants instead of needs! If you are withdrawing to invest, it depends on where you are investing and the risks involved. Be aware of costs as well for investing.
- Potential higher returns if you can confidently generate long term returns higher than historical EPF long-term returns of 5.5% (5.0% for Simpanan Syariah) or are concerned about EPF future returns rates dipping.
- Structure your asset allocation closer towards your ideal investment asset allocation (instead of EPF which is fixed income heavy).
- Freedom to withdraw and invest into any investments you want with no restrictions.
- Must top up future EPF contributions back to Account 1 instead of going to EPF Account 2 (which has more withdrawal options).
- Lost of guaranteed min 2.5% returns (EPF conventional only).
- You can already withdraw from EPF Account 1 (at 0% – 1.5% costs) using existing EPF MIS investment withdrawal (without using i-Sinar).
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