Monday, January 04, 2010

Withdraw EPF Account 2 Monthly

Even though you can find the details here, I would like to share my experience on withdrawing EPF funds from account 2 to my savings account. Why do I do that? To be frank, with the current amount of credit card debts I have, it will take me a whole lifetime to pay them back with the current salary I am getting. So I thought, instead of getting old paying off credit card debts, I might as well use my old days savings (simpanan hari tua) to pay them now!

There are 2 methods to get the EPF funds out the account 2.

  • Pengeluaran Mengurang/Menyelesaikan Baki Pinjaman Perumahan
  • Pengeluaran Ansuran Bulanan Pinjaman Perumahan
Method number 1 will deposit my funds from EPF account 2 directly to the Home Loan account, which means I will not get any liquid money. The benefit will be, my principal home loan amount will be deducted where I will save in interest and most likely to finish off paying my home loan before the contracted tenure.

Method number 2 - EPF will deposit my account 2 funds into my savings/current account. This is to assist me in doing the monthly loan payment to the home load account. For example if my monthly installment is RM1000 and I withdraw RM200 every month from my account 2, then I just need to find the balance RM800 to pay my monthly home loan installment.

Documents needed for this withdrawal:
  1. Borang KWSP 9P (AHL)
  2. Copy of IC
  3. Copy of saving passbook, or copy of bank account statement
  4. Surat Pengesahan Baki Pinjaman Rumah
  5. Copy of Sales & Purchase Agreement - if this is the 1st EPF withdrawal
On item #4, I had to call up the bank which I have my home loan account with and ask for them to provide the document. I've heard from others that the bank may need up to 2 weeks to prepare the document and in my case they prepared the document for me in 2 days. Be informed that the document is only valid for 3 months. If application to EPF is not made within that period of time, then too bad a new document has to be obtained.

Lastly how does the system works. Let say if I have RM2000 in my account 2. My monthly home loan installment is RM1000. If I want to withdraw the whole lot from my account 2, EPF will withdraw disburse RM1000 to my savings/current account for 2 months. Then if in the 3rd month I still have some money in my account 2 (from monthly EPF contribution), I will have to submit the application form again for withdrawal.

I did my submission on the 17th December 2009 and I am very pleased that I got the money in my savings account on the 27th December 2009. 10 days... not bad. I wish LHDN have the same level of service!

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