Find out how to withdraw EPF Account 3 and if zakat is obliged upon it. 

The world is becoming more and more challenging, especially lately. The price of goods is increasing while the salary scale is still the same for a majority of Malaysians compared to cost of living. Due to this, many are asking the government to allow withdrawals from the Employee Provident Fund (EPF)  as has been done before with i-Lestari and other previous EPF withdrawals. Thus, to help ease the people’s financial burdens, an initiative to create the EPF Account 3 for those in need has been announced. This account, also known as the Flexible Account, is an additional account to Account 1 and Account 2 for EPF members and is an account where members can withdraw money from it for any personal use. 

What is the EPF Flexible Account?

In general, the EPF was established to save money for the retirement of those who do not get a pension after the end of their employment at retirement age – usually at the age of 55 to 60 years. However, what is the use of retirement money if the savings cannot be withdrawn for emergencies or life needs such as for medical treatment or the purchase of a house? Thus, part of this EPF savings has been put aside in Account 2 where members can withdraw funds before retirement for certain purposes including for medical treatment, home purchase, education fees and others.

Now, the EPF has restructured its members’ accounts where each account is divided into 3 account categories as follows:-

• Account 1: Retirement Account where there are members’ savings for use after retirement
  
  
• Account 2: “Sejahtera” Account, where part of the EPF savings can be withdrawn for the purpose of supplementing each individual’s needs to achieve well-being before retirement. Among the reasons allowed to withdraw savings from this account are for the purpose of buying or renovating a house, furthering tertiary education, health or treatment purposes, insurance/takaful protection, performing Hajj, or withdrawals for those who have reached the age of 50. 
  
  
• Account 3: Flexible Account, where withdrawals are allowed for short-term financial needs. EPF members are allowed to withdraw money from this account for any purpose without the need for any documents or having to show the reason for the withdrawal. Money from this account can be used for anything, but of course it is recommended that it be withdrawn only for emergencies and urgent needs. 

Following the structuring of this account, the latest EPF contribution distribution rate is as follows:

• Account 1 (Retirement Account): 75%
  
  
• Account 2 (“Sejahtera” Account): 15%
  
  
• Account 3 (Flexible Account): 10%
  
  

This means, starting from 11 May 2024, the EPF contribution every month will be divided into these 3 segmentations. 

How to Withdraw EPF Account 3?

There are 2 steps that need to be done to withdraw the maximum amount allowed from this EPF Account 3. First, you need to choose the option to transfer the initial amount from Account 2 to Account 2 before 31 August 2024. For this initial amount, the calculation of the amount allowed to be transferred will be determined based on the amount of your EPF savings and the amount of savings in Account 2. 

To make this initial amount transfer option, you can choose one of the following ways:-

1. Make the initial amount transfer option via EPF i-Account application
   
   
2. Through online portal for EPF members
   
   
3. Do it at the “Self-Service Terminal” (SST) at any EPF branch
   
   

You can check the status of your application for the option to transfer the amount to EPF Account 3 after 3 to 5 days. After the authorised amount has been transferred from Account 2 to Account 3, you can now proceed to Step 2, which is to apply to withdraw savings from Account 3. The withdrawal method of EPF Account 3 is as follows:-

1. Log in to the KWSP i-Akaun application
   
   
2. Select the “Withdrawal” menu and then select “Withdraw your savings”
   
   
3. Select “Flexible Account”
   
   
4. Select “Withdraw Now”
   
   
5. Enter the withdrawal amount and select “Continue”
   
   
6. Select or update the bank account and then select “Continue”
   
   
7. Select “Accept” if you agree with the terms stated
   
   
8. Enter the TAC number
   
   
9. Your application has been successfully sent 
   
   

The application for EPF Account 3 withdrawal to the bank account you have registered will be processed within 7 working days after the application is approved. 

EPF Withdrawal Conditions Account 3

The conditions to withdraw from EPF Account 3 (Flexible Account):-

1. Members have registered for the restructuring of the EPF account into 3 accounts
   
   
2. Account 3 has a minimum deposit of RM50
   
   
3. The member has not reached the age of 55 years
   
   
4. Have savings in Account 3 (through an amount transfer option or monthly contribution)
   

Frequently Asked Questions For EPF Withdrawal Account 3

When can the funds transfer be made from Account 2 to Account 3?

EPF members can choose to transfer the initial amount from 12 May 2024 to 31 August 2024. 

How to transfer money from Account 2 to Account 3?

Members can choose to transfer initial funds from Account 2 to Account 3 through the EPF application on a smartphone, through the EPF website or through a “Self-Service Terminal” (SST) machine at any EPF counter. 

How to transfer money from Account 3 to a personal bank account? 

Make sure first that you have registered your bank account information with EPF. Next, the request to transfer money from Account 3 to your bank account can be done through the EPF application on a smartphone, through the EPF website or at any EPF office. 

When will the money be received into the bank account after being transferred from Account 3?

Transfer of funds from EPF Account 3 to the bank account you registered will be processed within 7 working days after the application has been approved. 

Do I have to pay zakat for withdrawals from Account 3?

Since the money in Account 3 can be withdrawn at any time according to your needs, it has become a perfect possession for the account holder. Therefore, the initial amount of Account 3 should be paid zakat on at 2.5% of the total amount. As for the initial amount, since it is channeled from Account 2 of the account holder, then zakat must be paid immediately without waiting for a year of haul.

However, for future contributions, members can wait a year for the zakat to be paid on them.