EPF Dividend 2020

The Employees’ Provident Fund (EPF) has declared its dividend for 2020 and the rate is 5.20% for conventional savings and 4.90% for Simpanan Shariah. I think this represents a commendable result.

Dividend history

As my own account is the conventional savings, I am going to list its dividend rate of the past five years.

2015: 6.40%

2016: 5.70%

2017: 6.90%

2018: 6.15%

2019: 5.45%

We can see that its dividend rate has been declining. However, I think 5.20% in 2020 is good, given the economic situation that we were in. Furthermore, this dividend rate is higher than Amanah Saham Bumiputera (ASB), the flagship product of Amanah Saham Nasional Berhad (ASNB). All the fixed price funds of ASNB (including the funds that I have i.e. ASM and ASM2) has a sub 5% return.

Conclusion

Based on this result, should we put our extra money into EPF? I would not recommend this move unless you are one of the people whom I mentioned in this article. The reasons being the disadvantages mentioned in the said article. However, I would not take out my EPF money to invest elsewhere either as it is intended to be my retirement nest egg. I would rather use my disposable income to invest and accumulate wealth. Nonetheless, this is my personal choice and you might have another view. I would say both choices are sound as long as we know what we are doing.

Let’s hope that EPF would be able to maintain its dividend rate above 5% in the future.