Deep, deep dive
- What is EPF?
- Who can invest in EPF?
- So why are EPF savings even important?
- How do you know if you are saving enough for your retirement?
- But why invest in EPF? What have their returns been like?
- What is the difference between the Conventional Savings Option and Shariah Option?
- When can I access my EPF savings?
- What is EPF’s new i-Invest platform?
- Practical tips
But why invest in EPF? What have their returns been like?
Well, when you invest in EPF you’ll always receive a minimum 2.5% annual dividend if you opt for a conventional account.
It’s also important to remember that the returns from EPF have historically been at around 6% (last 10 years), much higher than the minimum 2.5% that they guarantee. Returns like these are much better than if you’d invested in fixed deposits (around 3%) which is the investment most similar in risk profile to EPF. On top of that, EPF is a safe investment and generates good returns especially as you take on a very little risk.
These historical returns are generally comparable to the returns of other investment products after you deduct the fees. Why is this important? If an investment product doesn’t give you better returns than EPF after fees, it means you didn’t get any additional returns for the extra risk you took.
EPF achieves returns of around 6% because it has a full time team working to manage your money for you. Most of us will not be able to put in the time to learn and manage our investments with the same level of success. This is why we strongly recommend putting your savings in EPF. If you want to learn what EPF invests in, you can check out their annual reports.