How to Do EPF Akaun 3 Withdrawal (& 7 Uses for the Money, from Best to Meh)

Table of Contents

Support a content creator, share this article :)

I guess EPF Akaun 3 withdrawal is due to the government getting tired of the people urging for further EPF withdrawals? Or perhaps its due to low salary plus high cost of living causing lack of savings/emergency funds/high debt?

Regardless, say hello to EPF Akaun 3 (Akaun Flexibel). Unlike Akaun 1 (Akaun Persaraan) and Akaun 2 (Akaun Sejahtera), funds in Akaun 3 has unconditional withdrawal and are not ‘locked’ until retirement or other specific use case.

Note: This is not an article whether you should or should not do EPF Akaun 3 withdrawal. This is an article about:

How to withdraw from EPF Akaun 2 to EPF Akaun 3, and
the best uses for the EPF Akaun 3 withdrawal money, *if* you do it

Let’s get into it;

How to do EPF Akaun 3 Withdrawal: Transfer from EPF Akaun 2 to EPF Akaun 3

You have the option to transfer money from Akaun Sejahtera (Akaun 2) to Akaun Fleksibel (Akaun 3) ONLY between 11 May-31 August 2024. If you missed the window, you missed the window.

Note: The process is NOT mandatory nor automatic, and you can also choose to leave the funds in Akaun 2 without withdrawing it, no problem. Based on my informal poll, seems like quite a lot of you don’t plan to take out the money.

Informal poll time: Do you plan to take out money from EPF Akaun Sejahtera (Akaun 2) to put in EPF Akaun Fleksibel (Akaun 3)?

Pls RT for wider reach and sample size!
— Suraya: bestselling Bergaji & Pokai book (@surayaror) April 27, 2024

But if you do plan to take out the money, the easiest way to do EPF Akaun 3 withdrawal is to use the the KWSP i-Akaun app to transfer from EPF Akaun 2 to EPF Akaun 3. Step-by-step:

Log into KSWP i-Akaun app
Select ‘Learn More’
Select ‘Next’
Select ‘Transfer Now’
Read the Important Reminder
Select ‘Proceed’
Select ‘Accept’
Select ‘Yes’ to proceed (or ‘No’ to cancel)
Done!

The steps are nicely visualised by the EPF team below.

How Much You Can Transfer from EPF Akaun 2 to EPF Akaun 3

How much you can transfer from EPF Akaun 2 to EPF Akaun 3 depends on your balance in Akaun 2.

Balances under RM1k in Akaun 2 (Akaun Sejahtera): All can be transferred to Akaun 3 (Akaun Fleksibel)

Balances between RM1k-3k in Akaun 2 (Akaun Sejahtera): You can transfer a maximum of RM1k to Akaun 3 (Akaun Fleksibel)

Balances above RM3k in Akaun 2 (Akaun Sejahtera): 33.33% or a third can be transferred to Akaun Fleksibel. At the same time, 16.67% or one sixth will be transferred to Akaun 1 (Akaun Persaraan)

Here are the 7 best uses for your EPF Akaun 3 money, ranked from best to meh (according to me). Go through them one by one – some will apply to you, some won’t. If it doesn’t apply to you, do the next best thing.

#1 – Get out of dangerous or abusive situations

If your partner, parents or guardians have been giving you physical, mental or financial abuse, then use the EPF Akaun 3 withdrawal money to save yourself.

This also applies to abusive employers. This is your opportunity to find other jobs and get the hell out of there.

I paling kesian dengan orang gaji rendah dengan bos abusive. Bila stress of course akan selalu rasa nak self-reward as coping mechanism. Jadinya tak dapat nak saving sangat

Tak simpan duit, tak boleh nak berhenti kerja, maka stuck la kat situ selamanya 🙁
— Suraya: bestselling Bergaji & Pokai book (@surayaror) January 13, 2022

#2 – Pay off credit card/ personal loan

If you have credit card debt, especially balance carried over from previous months, it’s not a bad idea to use EPF Akaun 3 withdrawal money to pay off the debt.

Don’t skip your credit card payments any longer. Not only you’re paying a lot in credit card fees, you’re also going to eff up your credit score. Later when you want to buy house or whatever, you might get worse rates, if at all.

Getting bad rates for house loan aka mortgage is a bigger deal than you think. Because the amount you need to borrow is huge (at least six figures), a difference of even 0.1% can effectively mean you’ll be paying thousands extra, for nothing!

Paying of high-interest debt is also Step 2 in the journey to be financially free.

#3 – Use as emergency fund

Yes, you can use EPF Akaun 3 as emergency fund – just do the EPF Akaun 3 withdrawal and leave it there. This way, you can access it during emergencies AND the money will still collect dividend! Amazing!

In addition to the one-off withdrawal, you’ll also get some ‘extra’ money every month going forward, coming from your own EPF contributions. All EPF contributions from May 2024 will be divided following the 75-15-10 ratio, which means:

75% going into EPF Akaun 1 (Akaun Persaraan),
15% going into nEPF Akaun 2 (Akauh Sejahtera), and
10% going into EPF Akaun 3 (Akaun Fleksibel) respectively

Assuming you earn RM2000 a month – you’re contributing RM480 in monthly EPF contributions (self plus employer) and only RM48 a month or RM576 a year to EPF Akaun 3.

What if you want to take the money out of EPF Akaun 3? Can also. Here are the Best Savings Accounts in Malaysia to Put Your Emergency Funds

#4 – Get your health concerns sorted out

Awesome, you are not in any immediate danger and have no high-interest debt left. You also have less financial anxiety, now that you have some emergency fund. Next let’s focus on your health:

Get your recurring headache or weird lumps and bumps checked out
Buy your supply of prescription pills in advance
Get a comprehensive health checkup (keep the receipt, can deduct tax relief)
Speak to someone about your mental health

Health is wealth is cliché, but true. Speaking of health..

#5 – Fix those things that are already causing you pain/may cause you pain in the short term

You suffer from back pain? Get a better mattress and/or a comfortable work chair.

Your car tyres are getting worn out and you drive around a lot for work/travel? Get new car tyres.

Walking hurts? Get a new pair of quality shoes.

The general rule is, if it keeps you from off the ground, it’s worth the money.

#6 – Decide how much you want to allocate as ‘fun’ money

Okay, so by this point, you’re feeling good about yourself. You went through #1-5 and done all the ‘responsible’ things. It’s time to reward yourself with the amount left over!

But you also know the importance of saving up for rainy day and don’t want to spend all your EPF Akaun 3 withdrawal money. Who knows when you’ll get a ‘windfall’ again right?

Now is a good time to have that internal discussion with yourself on the maximum amount you’ll give yourself for ‘fun’ spending. You know, for clothes, gadgets, food, socialising, whatever.

If its RM100 per month, it’s RM100 per month. If it’s RM500, it’s RM500. Up to you, you know yourself best. Why not stretch out the money and have fun for months to come rather than finish off all the money right after you get it.

(Side note: It’s better to give yourself a small allocation rather than NO allocation. You’re human, it’s natural to desire stuff and experiences. Plus it’s better to allow yourself to be happy while appreciating small pleasures rather than blaming yourself for failing to keep to a strict budget)

#7 – Find opportunities to make money

Some of you may have skipped #1-6 altogether. You’re like, no Suraya! The money is not for anything frivolous! All I care about is GROWING it!

Alright okay okay I gotcha. I don’t understand why you need to use EPF Akaun 3 withdrawal money for this but fine.

Generally speaking, there are 3 main ways to make money:

Earning more through your day job,
Earning through side hustles, and
Investing

If you’re leaning towards (1), then read this: 3 Ways to Get A High Salary in Malaysia

If you’re leaning towards (2), then read articles under the Earning Money category. You can rent out your car, monetise your hobby, organise a workshop and more.

If you’re leaning towards (3), then read articles under the Investing category.

Generally speaking, using the gains/profits from your work (1+2) to funnel into investing (for the long term) is the best strategy.

That should be it. I won’t insult your intelligence by telling you not to get this or that, you big already. I wish you all the best in growing your income so you can replenish your retirement savings as soon as you can.