EPF Account: A Fund Source To Buy A Home

The Malaysian government is trying to encourage every citizen of the country to own a house. The government has been working towards providing the medium- and low-income earners with affordable houses in various parts of the country. Even after all these efforts, the people are unable to make the initial down payment as they cannot afford to put together a large sum at once.

Withdrawing the necessary amount from their EPF account can be one of the ways to deal with this situation. However, not everyone is aware of the procedure and eligibility to withdraw from their EPF account. The article throws some light on the necessary information to increase your knowledge on EPF withdrawals.

What is EPF

Employee Provident Fund (EPF) is an institution formed according to the Employee Provident Fund Act 1991 and abides the laws of Malaysia. The institution mainly operates to provide retirement benefits to private and non-pensionable public sector employees. This is a mandatory savings account that helps you stay financially independent after your retirement.

The contribution made to the EPF will be divided into two different accounts based on the following ratio:

  • Account 1-70%
  • Account 2-30%

When your age reaches 55 years, your account will be split into two, namely Akaun Emas and Akaun 55.

Withdrawal and Its Types

There are a few types of EPF withdrawal depending on the age and purpose of withdrawal:

  • Withdrawal at the age of 50 years.
  • Withdrawal at the age of 55 years.
  • Withdrawal at the age of 60 years.
  • Withdrawal to reduce the housing loan.
  • Withdrawal to purchase/build a house.
  • Withdrawal to pay the monthly instalment of a housing loan.
  • Incapacitation withdrawal.
  • Withdrawal to leave the country.
  • Withdrawal for education purposes.
  • Withdrawal of Savings of more than RM1 million.
  • Pensionable employees withdrawal and optional retirement withdrawal.
  • Members’ Investment Scheme.
  • Death withdrawal.
  • Health withdrawal.
  • Hajj withdrawal.
  • Flexible housing withdrawal.
  • PR1MA housing withdrawal.

Each of these types has their own purpose and withdrawal limit.

Dividends for Simpanan Konvensional and Simpanan Shariah

You have to know that the EPF contributions in your EPF account are invested in money market instruments, loans, bonds, equity and property to generate income. This, in turn, provides you with dividends on your share of investment.

Simpanan Konvensional earns a dividend of 2.5% p.a. whereas Simpanan Shariah does not have a fixed minimum dividend rate. The rate depends on the performance of the investment.

Withdrawal Updates

The recent updates regarding the withdrawal say that:

  • You can nominate Amanah Raya Berhad (ARB) to your account if you do not want to specify any other nominee. On your demise, the savings in your EPF account will be used to take care of the children below the age of 18 years.
  • The people belonging to the age 55 and age 60 withdrawal policies are now eligible to make a withdrawal of any designation without a set minimum. Also, there are no restrictions on the interval between two withdrawals.
  • The age limit to make withdrawals is raised from 75 years to 100 years. The dividend for your EPF amount will be paid from 75 years to 100 years.
  • Under death benefit policy, if you die before the age of 55 years, the nominee would receive RM2,500 from your EPF account. Now, the age is extended from 55 years to 60 years.

Withdrawal Process to Purchase House

You can withdraw your savings from Account 2 to purchase a house in Malaysia. This is allowed to make a person get a home by the retirement.


  • The person can be a Malaysian citizen or a non-Malaysian.
  • At the time of applying for withdrawal, you must not have reached an age of 55 years.
  • The balance in your Account 2 must be a minimum of RM500.
  • The house to be bought must be a residential unit.

Terms & Conditions:

  • You must have got your home loan approved from a recognised financial institution or must be ready with self-financing.
  • The Sale and Purchase Agreement for the property must be signed not more than 3 years ago from the date of an application at EPF.
  • You must not have made any housing withdrawals in the past.
  • Withdrawal is not allowed in the following cases:
    • To buy land or plot.
    • To renovate or redesign an existing house.
    • To purchase the third house.
    • To buy a house in a foreign country.

Required Documents

  • EPF Withdrawal Application Form 9C.
  • A copy of NRIC/MyKad.
  • Your bank account information along with the passbook or bank statement.
  • EPF Form 3.

Amount to Withdraw

  • For individual purchase, you can withdraw an amount that is equivalent to the difference between the construction cost and the home loan amount. In addition, you can withdraw 10% of the purchase price. Or, you can withdraw the entire balance in Account 2.
  • If you are borrowing a home loan in a joint purchase with your spouse or an immediate family member, then you can withdraw an amount equivalent to the difference between the purchase price and the home loan amount. An additional 10% of the purchase price can be withdrawn. Or, you can withdraw the balance in Account 2 of the buyers; subject to a maximum amount that can be withdrawn.
  • In case of loan approval of 100% of the purchase price, you can withdraw 10% of the purchase price or the total balance in Account 2.
  • If you are self-financing, you can withdraw an amount equivalent to the purchase price of the house with an additional 10% of the purchase price. Or, the total balance in your Account 2.

You can fill the application form for withdrawal and submit the form along with the required documents at the nearest EPF office. You can reach EPF Contact Management Centre at 03-89226000 for any queries and questions. Also, you can provide your feedback on the online page of EPF website.

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