- All employers and employees in Malaysia’s private sector must have an EPF account.
- As stipulated in Section 41(1) of the EPF Act 1991, employers must register with the EPF within 7 days of hiring their first employee.
- You can open an EPF account via the KWSP i-Akaun mobile application, a KWSP Self-Service Terminal, or the nearest EPF counter.
- The EPF offers financial security for retirement, allowing members to grow their savings consistently and enjoy tax relief.
- EPF also provides financial protection for unforeseen circumstances, such as death and incapacitation benefits.
Embarking on the journey of financial security in Malaysia begins with a key step: learning how to open an EPF account.
For many, the Employees’ Provident Fund (EPF) serves as a cornerstone of retirement planning, offering both stability and growth.
Whether you’re a fresh graduate stepping into the workforce, an entrepreneur or a self-employed professional, this article is your guide.
We will walk you through every step, from understanding the basics of the EPF system to the intricacies involved in how to open an EPF account.
What are the Types of EPF Accounts in Malaysia
1. Employer Account
It’s mandatory for all private-sector employers and employees in Malaysia to have an EPF account. Under Section 41(1) of the EPF Act 1991, employers are required to register with the EPF within seven days of hiring their first employee.
This registration process is exclusively conducted at EPF counters, ensuring a standardised and secure procedure for all businesses.
While certain sectors might necessitate additional documents, the fundamental requirements include the submission of Form KWSP 1 and a copy of identification (MyKad).
Upon successful registration, employers will receive:
- Employer’s Reference Number
- Notice of Employer Registration
- Employer’s Registration Certificate, which they are obliged to display prominently at their business premises.
2. Opening Accounts for Employees
Employers must register their employees with the EPF, especially if they haven’t been registered before.
Registered employers with an active i-Akaun can register their employees online. This facility is available to Malaysian citizens and permanent residents who own identification cards with only 7 and 12 digits.
Upon verification by the National Registration Department, an EPF membership number is assigned to the employee.
3. Personal EPF Account
Individuals aged between 14 and 74 years can open an EPF account.
Malaysia’s EPF system extends its benefits beyond traditional employment frameworks. If you’re self-employed, a freelancer, or a business owner, you can voluntarily contribute to your EPF account.
Opening an EPF account allows you to register for a secure and consistent savings process.
Contributions can be made automatically, alleviating the burden of manual savings and ensuring the steady growth of your retirement fund.
This automatic nature of savings simplifies the process and encourages a disciplined approach to financial planning.
As an EPF member, the EPF account offers financial security for your retirement years, providing a cushion that can support you when you’re no longer working.
How to Open an EPF Account in Malaysia
1. Registering Online through KWSP i-Akaun
Opening an EPF account in Malaysia is more convenient than ever, thanks to the KWSP i-Akaun online platform.
This platform is a one-stop solution for EPF members to track their contributions, apply for withdrawals, access their EPF saving statements, and perform various essential tasks.
Here’s how you can get started:
A. Download the KWSP i-Akaun Mobile Application
The first step is to download the KWSP i-Akaun app, which is available on Google Play Store, Apple Store, or Huawei App Gallery.
This application puts the control of your retirement savings right in your hands.
B. Prepare Your Identification
Ensure you have your MyKad or MyPR ready. It’s important to be in a safe and well-lit area to facilitate smooth processing.
C. Registering for an EPF Account
- Launch the KWSP i-Akaun application.
- Select the ‘Don’t have EPF account’ option.
- Follow the on-screen instructions carefully to complete your registration.
D. Activating Your i-Akaun
- Once your EPF account is successfully opened, you need to activate your i-Akaun by:
- Entering your user ID and password.
- Choosing a secret phrase and a secure image.
- Select ‘Agree’ to the terms and conditions.
For those who do not hold a MyKad or MyPR, you must visit the nearest EPF branch to register in person at the counter.
2. Utilising the KWSP Self-Service Terminal (SST)
The KWSP Self-Service Terminal (SST) is an efficient way for Malaysian citizens and permanent residents to open an EPF account and activate their i-Akaun.
For foreign applicants, the process requires a visit to the counter with specific documents, including Borang KWSP 3 (Daftar), KWSP 16(B), and proof of identification.
Here’s how to open an EPF account via the nearest SST:
- Begin by inserting your MyKad/MyPR at the SST and verify your identity with your thumbprint.
- You will be prompted to fill in your personal mobile number and email address.
- Review and confirm your personal details as they appear on the screen.
- Upon successful registration, your EPF member number will be displayed, and a confirmation email will be sent to you.
Activating your KWSP i-Akaun is a crucial step post-registration. Follow these steps at the SST:
- Choose the i-Akaun registration option on the SST menu.
- Review and verify your personal information for accuracy.
- Set up i-Akaun credentials such as User ID, Password, Secret Phrase, and select a Secure Image.
- Wait for a notification confirming successful i-Akaun activation.
- Scan the displayed QR Code to download the KWSP i-Akaun mobile application.
3. Registering at the EPF Counter
For those preferring or needing to visit an EPF counter, here’s how to open an EPF account:
- Prepare and bring any form of identification, such as MyKad, MyKAS, or a passport.
- Verify your identity at the counter with your thumbprint.
- After successful registration, you’ll receive your EPF member number.
- Use this number to activate your i-Akaun through the mobile application, following the steps mentioned above.
What are the Benefits of Opening an EPF Account in Malaysia
When it comes to securing your financial future, an EPF account in Malaysia offers a range of benefits.
1. Competitive Annual Dividend Return
Opening an EPF account ensures that your savings grow steadily.
With annual minimum dividend earnings of 2.5% and a typical profit range of 3% to 4%, your savings are not only protected from inflation but also build healthily over the long term.
This makes it an attractive choice for those looking to accumulate savings with a steady growth rate.
2. Risk-Free Investment
The EPF scheme is backed by the Malaysian government, making it a low-risk investment option.
Unlike other volatile investment avenues, your savings in the EPF are guaranteed by the government. This assurance provides peace of mind, knowing that your investment is secure.
3. Tax Exemptions
Contributing to your EPF account can lead to significant tax savings.
Your compulsory EPF contributions are tax deductible up to RM4,000 per year. Also, tax relief for life insurance premiums or voluntary contributions to their EPF fund covers up to RM3,000.
As such, individuals who contribute to EPF both mandatorily and voluntarily can enjoy tax relief up to a maximum of RM7,000.
Moreover, dividend earnings from your EPF investments are free from tax, offering an additional financial incentive.
4. Hajj Registration
For Muslim EPF members meeting specific criteria, the EPF offers a unique benefit in the form of Hajj registration.
The eligibility criteria include:
- Malaysian or Permanent Resident
- Of Muslim faith
- Have a minimum of RM1,300 in Account 1
- Below 55 years of age
You may also transfer your initial Hajj registration with Lembaga Tabung Haji (LTH) to the current EPF Hajj Registration facility without impacting the previously assigned Hajj rotation date.
5. Financial Safety Net
The EPF account also serves as a financial safety net in various situations:
- Death Benefit
In the event of a member’s death, the next of kin or dependent may receive a death benefit of RM2,500. The benefit is subject to EPF’s consideration and other conditions, including:
- Member is Malaysian (including Permanent Resident) and Non-Malaysian (Registered before 1 Aug 1998)
- Members passed away before age of 60
- Member’s dependent (widow/widower/children/parents) (Subject to member’s marital status)
- Application for Death Withdrawal received within six (6) months from the date of member’s death
- Member still has savings with the EPF
- Incapacitation Benefit
Members who are unable to work due to incapacitation can apply for a benefit of RM5,000, ensuring support during challenging times. This is also subject to the consideration and conditions of the EPF, including:
- Below 60 years of age
- Has applied for Incapacitation withdrawal (within 12 months of termination).
- Must have served for a minimum of 6 months in the last period of service.
- Reason of termination must be incapability to work and not disciplinary action or voluntary resignation.
How Bluebricks Can Help You
Opening an EPF account in Malaysia is more than just a savings plan; it’s a comprehensive financial security tool.
Whether you’re looking at steady savings growth, tax benefits, or financial protection for unforeseen circumstances, an EPF account is a solid option.
As a reputable bank loan and debt consolidation agency in Malaysia, Bluebricks offers individuals and entrepreneurs advice on managing their finances.
We offer comprehensive financial solutions to meet your needs, including:
- Personal loan services
- SME loan services
- Mortgage loan services (for buying a new home, refinancing and cashback purposes)
- Collateral loan services
Trusted Loan Consultancy Services
We adopt a personalised strategy to assist you in comprehending your financial position and suggest appropriate loan choices that align with your needs and future planning.
Our loan specialists take into account various critical factors, including:
- The specific loan amount you require.
- The urgency with which the loan amount is needed.
- Whether you or your parents own a property that has been held for over ten years.
- Your income level.
- Your CTOS score (such as your credit score and credit history).
Open EPF Account – FAQs
Opening your EPF account and activating your i-Akaun is straightforward, whether you choose the self-service terminal or visit the EPF counter.
But we’ve compiled some common questions to ensure you have all the documents and information to set up your account successfully.
Yes, MyKad or MyPR holders can conveniently open an EPF account through the KWSP i-Akaun mobile application.
The main purpose of EPF is to help individuals save up for their retirement. However, EPF members can withdraw from their Account 2 for specific purposes, including:
- PTPTN loan repayment
- Home purchase/construction
- Hajj pilgrimage
- Medical expenses
You can check your EPF balance through your i-Akaun or download the KWSP i-Akaun mobile application on your mobile devices.