4 Places to Get PRS in Malaysia with ZERO Sales Charge

Looking to invest in PRS in Malaysia, so you can have a better retirement? You deserve to know the cheapest options out there, and nothing is cheaper than 0% sales charge.

In fact, nothing more is acceptable. This is money for your retirement we’re talking about. The alternative – paying 0.5%-3% in sales charges – means losing out on thousands of ringgit over the long term. And you need all you can for your retirement – that shit’s expensive.

In this article, I’ll share:

• Part 1: What is PRS – Introduction to Private Retirement Scheme in Malaysia
• Part 2: Where to buy PRS in Malaysia without the sales charge
• Part 3: FAQs – Which PRS in Malaysia is the Best? Which PRS Fund to pick?

Part 1: What is PRS – Introduction to Private Retirement Scheme in Malaysia

(skip this part if you’re already familiar with PRS. Beginners please read)

PRS or Private Retirement Scheme is another place to park and grow your retirement savings. That’s the money you need when you hit 55/60 years old, depending on when you retire.

How does PRS work

Think of it like optional EPF. If you are a working adult, you know that 11% or 12% of your salary is deducted for EPF right? The money goes into a ‘tabung’ managed by EPF, who will invest it on your behalf.

Similarly, the money you contribute to PRS goes into a ‘tabung’ managed by a provider of your choice, who will invest it on your behalf.

Must I do PRS? Isn’t EPF enough for retirement?

Maybe EPF is enough for retirement, *if* you have around RM800k MINIMUM to a few million (recommended) in your EPF account. That’s not even a huge amount – it allows you to enjoy a modest retirement, not an extravagant one.

Note: The figures are based on retirement calculators and advice given by financial advisors.

However, over half of EPF contributors aged 54 have savings of LESS THAN RM50,000 for retirement. Therefore, unless they have alternative arrangements, including relying on their children/family members, they probably won’t be retiring and will continue to work in old age, even if battling health conditions.

That’s why retirement planning is a significant part of good personal financial planning, and why they keep telling you to save for retirement early, as soon as you start working.

Why open PRS online account

Some of you might ask – why not just keep retirement savings in EPF? Why need to open PRS?

The easy answer is you don’t have to, but the tax relief from contributing to PRS funds is worth getting.

How much is PRS tax relief

PRS tax relief will be given up to RM3000 in contribution within one calendar year. According to PRS Tax Relief Calculator from FSMOne’s PRS Guide, if your annual chargable income is RM40,000 (approx RM3k+ salary per month), then maxing out the annual contribution will give you tax savings of RM240.

Is it worth doing Private Retirement Scheme for the Tax relief?

Some people say that it’s not worth doing PRS in Malaysia just for the tax relief alone but Idk man. RM240 in tax savings on RM3000 contribution that goes towards my own retirement sounds pretty good to me. It’s equivalent to an immediate 8% profit.

Differences between EPF account and PRS online account

There are many differences between EPF and PRS, but some that you should know are:

1. EPF is basically one giant tabung – you deposit money, the good folks at EPF manage and invest it on your behalf.
2. However, there are many PRS funds, from many PRS providers (asset management companies). For better or for worse, you can choose which ones to invest in – yes, plural, because you can choose more than one PRS funds
3. EPF funds are guaranteed to provide at least 2.5% returns per annum. There is no such guarantee for PRS funds. You *could* lose money, but generally speaking, many funds should do okay, given the long time horizon
4. PRS is NOT the same thing as EPF i-Invest. To invest in PRS funds, you need fresh funds, aka a new source of money. To invest in selected unit trust via EPF i-Invest, you are allowed to take some money out of your EPF Account 2. For more info, read: All You Need to Know About Buying Unit Trust Through EPF i-Invest

PRS fees and charges

As for fees, PRS funds impose these charges:

• Sales charge – to pay for marketing and servicing services – up to 3% per annum) (this is the one you want to drastically reduce)
• Annual management fee – to pay for investment management services – Up to 1.8% per annum
• Transaction fees i.e. switching fee, transfer fee and redemption charge – to pay for administration of your transaction

Note: Check here and here for the latest update on fees and charges. For more information about PRS, please browse the Private Pension Administration page.

Alright, now that we covered the similarities and differences between two retirement schemes in Malaysia, let’s go on to how to open PRS online account in the most cost-effective way – here are 4 places to get 0% sales charge.

Part 2: Where to buy PRS in Malaysia without the sales charge

#1 – Via PRS Online Enrollment (for 30 years old and under only)

Web link: https://prsenrolment.ppa.my/

The first option is unfortunately only available for people aged 30 years old and younger. As per the landing page,

For applicants age 30 and below who perform self-enrolment through PPA’s PRS Online Enrolment service, the PRS Providers’ sales charge will be at 0%.

Note: I don’t have an account with PPA’s PRS Online Enrolment service, so I don’t know how good the platform is. If anyone have experience, appreciate you sharing in the comments section.

#2 – Via eunittrust.com.my

Web link: https://www.eunittrust.com.my/Home/Banner1

The second option is through enittrust, an online platform where you can purchase unit trusts from multiple providers. They have PRS funds as well (note the difference of sales charges from offline vs online in the image below)

Note: I don’t have an account with PPA’s PRS Online Enrolment service, so I don’t know how good the platform is. If anyone have experience, appreciate you sharing in the comments section.

#3 – Via FSMOne

Web link: https://www.fsmone.com.my/funds/tools/fund-selector > More Filter > Check PRS Providers Only

The third option, from a platform that I personally use, is FSMOne, which is formerly called Fundsupermart. Like #2, FSMOne is also a platform to purchase unit trust online, and they also recently allowed stocks and ETFs purchase.

This is not a sponsored post – I quite like FSMOne. They send good newsletters, organise financial webinars, and even gave me RM40 in Touch ‘n Go eWallet credit just for topping up my PRS fund (so I get tax relief AND ewallet credit).

If you end up using this option, would appreciate you opening an account via my referral link. You get a token to enjoy unit trust purchase at a lower sales charge of 1% – way less than what unit trust agents charge (5%).

#4 – Via Versa Asia

As of October 2023, you can also invest in PRS funds from Versa Asia with 0% sales charge!

Go to Homepage > Retirement and select any of the 6 funds offered.

Ps- Aside from PRS funds, you can use Versa Invest to invest in unit trust, REITs and gold. They also offer Versa Save, a good place to park your savings. Register via my Versa Asia link (or enter code SURAYA) and get RM10 with minimum deposit of RM100.

Part 3: Frequently Asked Question – Which PRS in Malaysia is the Best? Which PRS Fund to pick?

Disclaimer: NOT AN EXPERT. Just sharing the process that I used to select which PRS fund is the best for me. Get other people’s advice too.

Hint: you’ll never know which one is the ‘best’ one because you can’t predict the future.

Method #1 to pick PRS in Malaysia: Pick based on providers

Do you have a preference for any of the providers? Some people base their decisions on that. They trust Company A so they pick what Company A offers.

List of PRS providers, as of writing time:

• AHAM Capital AM
• AIA
• AmInvest
• Hong Leong Asset Management Bhd
• Kenanga Investors
• Manulife Investment Management
• Principal Asset Management
• Public Mutual
• RHB AM

Some companies win investment awards, which is an indicative (not guarantee) of good future performance.

Method #2 to pick PRS in Malaysia: Pick based on recommendation from financial planners or financial media

Some people get recommendations from their financial planners.

You may get fund recommendations online too, whether from financial newsletters or media or other sources.

Method #3 to pick PRS in Malaysia: Pick based on process of elimination

Personally, I didn’t use any of the methods above. What worked for me is the process of elimination – use the information available to reduce fund options and pick from the remaining. How it works:

• First, I eliminated all funds that have sales charge. This was easy – I went through FSMOne. Last I checked, 61 PRS funds were available
• Because I am still young (under 45 years old), I decided to focus on Growth funds. Therefore, I eliminated Conservative and Moderate funds
• I also eliminate non-Syariah funds. The Muslim guilt is real
• I also eliminated funds that invested heavily on Malaysian equity and prioritise other geographical locations – I figured I have enough of those in my other investments

This drastically reduces my PRS fund options. You might go through some more process of elimination. Some people might not want to invest in funds in industries they think are dying, or in certain geographies, or whatever.

That’s it. You can read up the factsheets and longer reports, or cross-reference with other recommendations to make your final pick. Make an educated choice based on the information you have.

Remember: if you can’t pick just one PRS fund, nothing’s stopping you from getting a few. You can split the RM3000 into two PRS funds (RM1.5k each) or 3 funds (RM1k each), etc.

Is it worth saving for retirement?

If I’m honest, I no longer believe in the traditional concept of retirement, where you get to stop work/earning income completely and live on savings. Not any more. And many others feel the same way I do. The amount you need is too much.

Personal opinion: Retirement is no longer an achievable goal for most of us. We are the generation that will work forever, or until we can't. It's less 'just tahan until retire' and more 'prioritise well-being, don't burnout'

I'm not even sad about it. I've accepted it.

— Suraya: bestselling Bergaji & Pokai book (@surayaror) April 22, 2021

HOWEVER. It doesn’t mean I’m not even going to try. What’s the worst that could happen? That I have access to more money at 55/60? That’s not a bad problem. Plus I can’t assume I’ll be healthy enough to work at that age. Dahla makan banyak exercise tidak

So, if I have to do it for the sake of Future Me, then might as well optimise it by reducing fees. You don’t want to waste up to 3% in sales charge, you want to let every single cent compound over decades.

I wish you the best in your journey to save and earn money for retirement, whether by choice or by force. All the best opening your PRS online accounts and building your retirement accounts.

Truthfully, by the way things are, with low wages and everything, not everyone can make it in the end. Hope the odds will be in our favour.