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Potential good dividend year 2020 for EPF savings?

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I think most of my friends are EPF contributors. So they have EPF savings. Yeah, majority are still working hard every month to pay their bills. I also do think they hope that the dividends for their EPF savings would be way higher than their Fixed Deposit (FD) rates which is now a paltry 2% if not lower. These days, when Bank A offers a 2.2%, many would move their money from Bank B which is giving less than 2% to Bank A instead. These are the days when both banks are equally low but an extra 0.2% is very good if the saved amount is huge.

There may be good news. EPF’s dividend for year 2020 will most likely be much higher than what I have written above. All we could do is to hope that the news is going to come true soon. The reason is because EPF’s results for first 9 months of 2020 showed that a dividend of 4% is possible. If we assume the same returns for last quarter, then hey it could be 4% if not higher. Just need to wait for that announcement. Meanwhile, this was what was reported in the Star.

epf savings
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Article in thestar.com.my. “EVERYTHING points to the Employees Provident Fund (EPF) declaring a commendable dividend for 2020. The fund with RM950bil under its belt is expected to declare a dividend rate that is almost the same as Amanah Saham Bumiputera (ASB) or more.”

“EPF’s final quarter results are not out yet. Should it record another RM13bil in net investment income — similar to the results of the second quarter — the fund’s total net investment income would be about RM50bil.

Assuming there are no major impairments, the EPF should be able to announce a return of close to 5%, which if achieved, would be a feather in the cap for the fund.” Read the full report here: Article in thestar.com.my.

In the mean time, do note that every ringgit saved from buying unnecessary stuffs do amount to a huge dividend return too. Calculation example? If one has RM50,000 in the EPF savings and EPF declares a 5% dividend, this is RM2500! Yes, per year. Divided into months, it’s around RM200. My friend’s cigerette bill is higher than RM200 per month. If he buys the branded ones, the bill would be even higher.

If one were to go to a cafe and buys a latte and a cheesecake slice every 3 days, that’s already (RM15 + RM 15) x 10 times = RM300. One had spent more on coffee and cheesecake within one month versus waiting one whole year for a RM200 dividend. Think about the power of money. It could add to our wealth or it could reduce it tremendously simply because we did not see where the money was spent on. Happy waiting for the good news.

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