Malaysians using i-Sinar for investment

Gold is a popular investment choice among i-Sinar recipients


A LARGE number of people, who withdrew savings from their Employees’ Provident Fund (EPF) Account 1 under the government i-Sinar programme, are using the money for investment, according to economists.

The scheme is meant to help the rakyat cope with Covid-19-related economic hardships by allowing them to withdraw from their retirement funds.

But Malaysians are using their substantial withdrawals to invest in everything from stocks to cryptocurrencies.

Capspring Temasik Financial Group Sdn Bhd wealth planner Ku Muhammad Afif Ku Ibrahim Najib said investing i-Sinar is a good choice, but only after settling debts and credit card bills.

He said gold, which is currently priced at around RM228 per gramme, is a popular investment choice among i-Sinar recipients.

“They will keep the gold for a while and sell when the price is high to make a profit. Some also buy gold as savings for future use, like education for their children.

“Yes, it is a good move, but achieving peace of mind is important too,” he told The Malaysian Reserve.

He said i-Sinar money can also be used as a booking or deposit fee for property purchase and renovation, while others use the money to invest in private retirement schemes or unit trusts.

People who lost their jobs during the pandemic are also using their withdrawals to start small businesses, he said. Nadiah, a senior executive, said she used half her i-Sinar money for investment while keeping the rest as emergency cash.

She said so far, she has used her withdrawal to invest in unit trust and bitcoin.

“We need capital to start investing and i-Sinar really helps, especially during these uncertain times where many companies are not stable and we could lose our job anytime.

“So, we need to have backup, be it in investment or small businesses, but first, we need money to do that,” she said.

According to the EPF, those with RM100,000 and below in Account 1 have access to any withdrawal amount of up to RM10,000, of which the payments will be staggered for six months with the first payment of up to RM5,000.

Those who have above RM100,000 in Account 1 would have access to up to 10% of their savings, but the maximum total withdrawal amount allowed is RM60,000, and the payments will also be staggered over six months with the first payment of up to RM10,000.

Meanwhile, senior operations support agent at a multinational delivery services company, Nik Anis Amalina Alwai, 29, spent the first payment of RM5,000 to pay for her part-time Master’s degree fee.

Nik Anis, who waited a year to further her studies in Masters of Corporate Communication, planned to use the subsequent monthly RM1,000 for her expenses and also to pay off her credit card.

“I have experienced withdrawing my savings from Account 2 to help finance my Bachelor’s degree course for the last few years. It was not easy because many documents were needed including the offer letter and exam results.

“So, considering the stringent rules by EPF before this, i-Sinar is very convenient and hassle-free.”

An electrician, who only wanted to be known as Kamal, 33, used his money to pay for his wedding expenses which have been postponed many times.

“When the wedding keeps on getting postponed, my calculation and budget are affected, too. i-Sinar is really timely for me.

“I also plan to use the subsequent amount to top up for my house renovations.”

Read our previous report here

EPF contributors turn to bitcoin