Wednesday April 12, 2006
EPFs new withdrawal scheme welcomed
PETALING JAYA: The annual withdrawal of funds from Account II of the Employees Provident Fund (EPF) to reduce housing loans means savings for consumers and a boost to the economy, say financial and property experts.
It makes sense for contributors to take out their money because they only earn 4% to 5% interest from EPF when the loan interest rate is 7% to 8%.
This means net savings for consumers, said Singular Asset Management chief investment officer Teoh Kok Lin Teoh.
He said contributors now have a choice of withdrawing their savings annually or every three years.
On Monday, EPF announced that contributors could now withdraw savings from their Account II yearly to reduce or settle housing loans.
Real Estate and Housing Developers Association Malaysia (Rehda) president Datuk Jeffrey Ng agreed it would boost the property market. He said contributors would be able to pay off their loans faster.
National House Buyers Association secretary general Chang Kim Loong agreed it would reduce house buyers debts.