Lower EPF Dividends Expected For This Year, Between 4.8% To 5.1%

Alex Cheong Pui Yin

3rd March 2023 - 2 min read

Employees Provident Fund (EPF) is expected to distribute significantly reduced returns to its contributors this year, with the dividend for conventional and shariah savings projected to range between 4.8% to 5.1%, and 4% to 4.5%, respectively.

Revealed by a source familiar with the matter, EPF’s dividend rate for the previous year stood at 6.1% for conventional savings and 5.65% for shariah savings, by comparison. “However, the rates are definitely much better than commercial bank interests for fixed deposits. Under the circumstances, they should be acceptable, especially those with high savings in their accounts,” the source further commented.

The source also explained that despite the significant dip, these rates are the best outcome that could have been achieved by the provident fund, given the decline seen in global financial markets over the past few years.

Several economists, too, have previously forecasted that the EPF’s dividend will be lower for this year, although they also believe that it will still be at an acceptable rate. Professor Geoffrey Williams from the Malaysia University of Science and Technology (MUST), for instance, noted that the EPF has been managed well thus far with the appropriate investment strategy, and as such, is still “one of the best risk-adjusted long-term investors”.

Meanwhile, Professor Yeah Kim Leng from Sunway University said that most international funds, including the EPF, are expected to report poorer performance for 2022 due to rising interest rates that have negatively impacted capital markets.

In the past decade, EPF’s dividend for conventional savings has ranged between a high of 6.9% (2017) to a low of 5.2% (2020). As for shariah savings – which was introduced not too long ago in 2017 – the highest dividend that was recorded stood at 6.4% (2017), while the lowest was 4.9% (2020).

(Source: Free Malaysia Today)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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