Finally, it’s here. 

Our EPF has been restructured to having 3 accounts: 

1. Akaun Persaraan 
2. Akaun Sejahtera
3. Akaun Fleksibel 

From now onwards, our EPF contributions will be split based on this ratio: 

1. Akaun Persaraan (75%) 
2. Akaun Sejahtera (15%)
3. Akaun Fleksibel (10%)

As the EPF had offered a detailed explanation on how it works very clearly, I will not dwell on its mechanism. Rather, I like to touch on the option to perform the one-off “Initial Amount Transfer” into Akaun Fleksibel. Here, I’ll share both pros and cons so that we can decide for ourselves on this option. 

If I Opt For Initial Amount Transfer

Assuming that I have RM 100k in the following EPF accounts: 

1. Akaun Persaraan: RM 70,000 
2. Akaun Sejahtera: RM 30,000
3. Akaun Fleksibel: RM 0

By opting for the transfer, my amount in Akaun Sejahtera (RM 30,000) would be transferred in the following manner: 

1. 1/6 of this amount (RM 5k) will be credited into Akaun Persaraan. 
2. 1/2 of this amount (RM 15k) will be retained in Akaun Sejahtera. 
3. 1/3 of this amount (RM 10k) will be credited into Akaun Fleksibel. 

As such, my RM 100k in EPF would now be split into: 

1. Akaun Persaraan: RM 75,000 
2. Akaun Sejahtera: RM 15,000
3. Akaun Fleksibel: RM 10,000

What If I Choose Not to Exercise This Option?

Then, I’ll retain the original EPF allocation as follows: 

1. Akaun Persaraan: RM 70,000 
2. Akaun Sejahtera: RM 30,000
3. Akaun Fleksibel: RM 0

So, the question is: “Which of the two EPF allocations is more suitable for me?”. Should I start with RM 0 or some money in Akaun Fleksibel? Here, I’ll pen down several factors to consider before making that decision. 

Factor 1 – Dividends

The burning question is: “Would there be a difference in dividend rates for each of these Akauns?”. The answer is no. This means dividend rates for all 3 Akauns, at this point in time, are the same. Based on EPF’s track record, we are enjoying 5%-6% per annum in dividend yields for the long-term. 

Factor 2 – Should I Withdraw Akaun Fleksibel to Repay Debts?

This depends on your present financial situation.

1. If you’re drowning in credit card debts, where you are paying 18% per annum in interest costs, by all means, you should take out as much as you can to settle, pay off and eliminate this debt. It is a no brainer to sacrifice the 5%-6% yields to extinguish debts with high interest costs. 

2. If you’re planning to pay off your PTPTN loan that carries 1% in interest cost a year, that’s unwise. So, please don’t sacrifice your 5%-6% yields to pay off debts with low interest costs. 

3. If you have 1 mortgage that carries 4% interest cost a year, it’s not ideal to be sacrificing EPF to service your mortgage. But, what if your mortgage installment is relatively high, like >50% of your income, and you need a relief in cash flow? I believe in this case, you should have more EPF money in Akaun Sejahtera. Thus, it’s wiser to not opt for the initial amount transfer in the first place. Probably, as I write, there is one exception to this. You’re broke and are scrambling for funds to pay for your next month’s mortgage. Then yes, please transfer to your Akaun Fleksibel and use the money for that purpose. 

Factor 3 – Should I Withdraw Akaun Fleksibel to Invest?

This depends not just on your financial situation but also your level of expertise and experiences as an investor. Personally, as an investor and financial educator for numerous years, I find that many lack the education & expertise in this area. Hence, for most people, it’s best to keep the money in the EPF. Here, I’ll share a list of possible asset classes that we could invest in: 

1. Some may keep money in FDs as having cash in their bank accounts would be “safer” than EPF. It has nothing to do with logic but all to do with emotions. If it helps with your mental health, by all means. After all, how can we quantify that in our balance sheets? But, if you are looking at math, it’s better to retain funds in EPF, be it Akaun Sejahtera or Akaun Fleksibel, for as long as possible. 

2. You are planning to buy your first or second house and are a little short when it comes to funds. In this case, it’s best to retain more EPF in Akaun Sejahtera as you could withdraw funds from that account. But, if you are buying property #3 or #4 and beyond, you can make that transfer into Akaun Fleksibel and use that funds to build your real estate empire. 

3. You want to invest in stocks. Here, let’s assume you own a stock portfolio and you like to expand upon your successes. I believe you can transfer your funds to Akaun Fleksibel and use that as a warchest to grow your portfolio. I also think it makes sense to withdraw if you’re looking to diversify your personal wealth in a portfolio of global stocks which are denominated in USD, SGD … etc. But, at the same time, if your idea is to speculate or trade stocks, chasing short-term gains, having no clue whatsoever on stock investing, please keep your money in EPF. 

4.  The same applies for other investments: unit trust, ETFs, cryptos, metals and so on and so forth. If you are not good in any of these investments, your default mode should be to refrain from using EPF money to invest in them. 

Factor 4 – What If I Have No Idea What To Do Yet?

Should I opt for the initial amount transfer or not? 

Here is my take on this. 

I would say yes. This is even if I have no idea on what to do with this money yet. Think about it. Akaun Sejahtera and Akaun Flexibel are EPF accounts that would yield us the same dividend rates. But, Akaun Fleksibel offers more liquidity than Akaun Sejahtera. This would come in handy as an emergency fund. Hence, it’s a benefit to gain without extra cost. 


Up till 31 August 2024, we can choose to exercise the initial amount transfer for our EPF money. Here, I’ll list down who is more suitable to not transfer, transfer but not withdraw and finally, transfer and withdraw: 

1. Not Transfer If You:

a. Buy your first or second home. 
b. Need cash flow to service your mortgages. 

2. Transfer but Not Withdraw if You: 

a. Boost liquidity by having an emergency fund. 

3. Transfer and Withdraw if You: 

a. Pay Off Debts with high interest rates. 
b. Invest in Stocks to Diversify Your Wealth in Other Currencies. 
c. Invest in Real Estate (Property 3, 4, and beyond). 
d. Fund Your Businesses and Project Undertakings of High Margins. 

EPF Account 3

Ian Tai
Ian Tai

Financial Content Machine. Dividend Investor. Produced 500+ Financial Articles featured in in Malaysia and the Fifth Person, Value Invest Asia, and Small Cap Asia in Singapore. Regular Host and Presenter of a Weekly Financial Webinar with Co-Founded, an online membership site that empowers retail investors to build a stock portfolio that pays rising dividends year after year in Malaysia and Singapore.

    2 replies to "EPF Account 3: Should I Opt For Its Initial Amount Transfer?"

    • KJ

      Will i be losing the 1 month interest for the transfer?
      If the mechanism is like “withdraw from acc2 and deposit into acc3”, interest of the transferred amount may be affected as EPF is calculated by month to my understanding.

      • KCLau

        I think you will not lose any interest in the process. The reason is that the funds remain within the EPF system throughout the transfer. Even though the mechanism involves withdrawing from Account 2 and depositing into Account 3, the interest calculation is continuous as long as the funds are still held within the EPF.

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