EPF Accounts Explained: How Your Retirement Savings Are Split

Every ringgit you and your employer contribute to EPF does not sit in one pool. Since May 2024, your savings are split across three separate accounts, each with different rules on when and why you can touch the money. Understanding this split is the foundation of any serious retirement plan in Malaysia.

The three-account structure at a glance

The Employees Provident Fund (EPF, also known as KWSP) restructured its savings framework on 11 May 2024, adding a third account to the previous two-account system. Members below age 55 now hold savings across:

• Akaun Persaraan (formerly Account 1): long-term retirement core
• Akaun Sejahtera (formerly Account 2): pre-retirement life-cycle needs
• Akaun Fleksibel (new, formerly no equivalent): short-term, freely withdrawable

Every new contribution since 11 May 2024 flows into these three buckets at a fixed ratio. Balances that existed before the restructuring were migrated automatically.

How contributions are split

The 75/15/10 allocation applies to every ringgit of fresh contributions, whether from your salary deductions, your employer’s share, or voluntary top-ups.

Account	Allocation	Purpose	Locked until
Akaun Persaraan	75%	Retirement corpus	Age 55 (or specific conditions)
Akaun Sejahtera	15%	Pre-retirement needs	Specific approved purposes
Akaun Fleksibel	10%	Flexible spending	Any time, any reason

Before May 2024, the split was 70% to Account 1 and 30% to Account 2. The new structure deliberately increases the retirement-protected share (from 70% to 75%) while carving out a smaller, fully liquid slice.

Who contributes and how much

The total EPF contribution rate for Malaysian employees earning RM5,000 or below is 11% (employee) + 13% (employer), giving a combined 24%. For salaries above RM5,000, the employer rate drops to 12%, making the combined rate 23%.

From October 2025, non-Malaysian workers are also subject to mandatory EPF contributions at a rate of 2% from both employee and employer, a significant policy shift for companies with foreign staff.

Akaun Persaraan: your retirement core

Three-quarters of every contribution lands here. This is the most protected account. The EPF’s design intent is straightforward: money in Akaun Persaraan should compound for decades so you retire with an adequate income.

Withdrawal is restricted to:

• Full withdrawal at age 55 (or age 60 for deferred withdrawal with higher limits).
• Incapacitation, terminal illness, or leaving Malaysia permanently.
• Death (disbursed to nominees or estate).

There is no ad hoc “I need cash” withdrawal from this account. That protection is deliberate. EPF research via its Belanjawanku 2024/2025 framework shows that the majority of Malaysians exhaust their savings within three years of retirement, underscoring why this account stays locked.

Akaun Sejahtera: for life’s milestones

Fifteen percent of contributions go here. This account bridges the gap between pure retirement savings and everyday needs, covering approved mid-life financial events:

• Housing: purchase of a first home, reducing an outstanding home loan, or renovating a property.
• Education: tuition fees at approved institutions, or repaying an education loan (amount capped at outstanding fees or full Akaun Sejahtera balance, whichever is lower).
• Health: medical expenses for serious illness for yourself or immediate family.
• Insurance/Takaful: premiums for approved protection plans.
• Hajj: pilgrimage expenses via Tabung Haji.
• Age 50 withdrawal: a partial withdrawal option available once you turn 50.

All withdrawals from Akaun Sejahtera for these purposes are tax-free under Malaysian tax law.

Akaun Fleksibel: your liquid safety valve

Ten percent of each contribution goes into this account. The rules are intentionally simple: you can withdraw any amount above RM50, at any time, for any reason, with no justification required.

Key Akaun Fleksibel rules (2025):

Item	Detail
Minimum balance to withdraw	RM50 in Akaun Fleksibel
Minimum withdrawal	RM50
Maximum withdrawal	Full Akaun Fleksibel balance
Age requirement	Below 55
Processing time	7 working days
Application channels	i-Akaun app, i-Akaun web portal, or EPF office

For withdrawals up to RM3,000, you can process everything digitally with no branch visit needed (provided you have a prior thumbprint verification record on file). For amounts between RM3,001 and RM30,000, a first-time visit to an EPF branch or Self-Service Terminal (SST) is required.

One important constraint: dividends earned on your Akaun Fleksibel balance remain subject to the EPF Act. Under current law, EPF cannot credit dividends directly to Akaun Fleksibel in a way that bypasses the statutory allocation formula.

How EPF dividends work

EPF invests your savings across equities, fixed income, real estate, and alternative assets. The annual dividend is declared in the first quarter of the following year and credited proportionally to all three accounts based on your balance in each.

Recent dividend history (Simpanan Konvensional):

Dividend Year	Rate	Total Payout
2025	6.15%	RM79.6 billion
2024	6.30%	RM73.24 billion
2023	5.50%	(previously declared)

The 2025 rate of 6.15% (declared in early 2026) was a slight dip from 2024’s seven-year high of 6.30%, attributed to a softer domestic equity market. Simpanan Shariah also matched conventional at 6.15% in 2025.

The minimum dividend guaranteed by law is 2.50% per year for Simpanan Konvensional. In practice, EPF has consistently exceeded this floor for decades.

The compounding effect

At 6% annual dividend on RM100,000 in savings, you earn RM6,000 in a single year. That dividend stays in your accounts and earns dividends the following year. Over a 20-year career, this compounding is a significant wealth builder, which is exactly why the Akaun Persaraan lock-in exists.

When you can withdraw everything

Full withdrawal of all three accounts is permitted at age 55. At this point, you can choose to withdraw the full balance in a lump sum, or leave some or all in the EPF to continue earning dividends (there is no forced withdrawal rule). A second full withdrawal window opens at age 60, often at more favourable terms.

Members who die before age 55 have their savings disbursed to nominees registered with EPF, or via the estate if no nomination is in place. Registering a nominee via i-Akaun takes under five minutes and removes significant administrative burden for your family.

Voluntary contributions and i-Saraan

Self-employed workers and freelancers are not mandated to contribute to EPF, but they can do so voluntarily via the i-Saraan programme. Voluntary contributions receive the same dividend rate and follow the same 75/15/10 account split. The government also provides a co-contribution incentive for eligible lower-income self-employed workers under i-Saraan, making it a meaningful retirement tool for those outside formal employment.

Key takeaways

• Your EPF contributions since May 2024 are split 75% (Akaun Persaraan), 15% (Akaun Sejahtera), 10% (Akaun Fleksibel).
• Akaun Fleksibel is freely withdrawable at any time for any reason, minimum RM50.
• Akaun Sejahtera can be accessed for housing, education, health, insurance, Hajj, and age 50 withdrawals. All are tax-free.
• Akaun Persaraan is locked until age 55, with narrow exceptions for permanent departure, incapacitation, or death.
• EPF paid 6.15% dividend for 2025 (Simpanan Konvensional and Shariah), the second-highest in a decade.
• The statutory minimum dividend is 2.50%; EPF has never fallen below this floor.
• Register an EPF nominee via i-Akaun to protect your family’s access.

Frequently asked questions

Q: What happens to my old Account 1 and Account 2 balances? They were automatically migrated into Akaun Persaraan and Akaun Sejahtera respectively when EPF restructured in May 2024. Your historical balances are intact. Only contributions from 11 May 2024 onwards flow using the new 75/15/10 split.

Q: Can I withdraw from Akaun Persaraan before age 55 for any reason? Only in very limited circumstances: permanent departure from Malaysia (for non-citizens or Malaysians emigrating), total incapacitation, or terminal illness. There is no general-purpose pre-55 withdrawal from Akaun Persaraan.

Q: How do I check my EPF balance across all three accounts? Log in to the i-Akaun app or the i-Akaun web portal at i-akaun.kwsp.gov.my. Your balance for each account is shown separately on the dashboard.

Q: Does EPF dividend count as taxable income? No. EPF dividends are exempt from income tax under the Malaysian Income Tax Act. Withdrawals from EPF for approved purposes are also tax-free.

Q: If I contribute voluntarily as a freelancer, do I get the same dividend rate as employees? Yes. Voluntary contributors via i-Saraan receive the same annual dividend rate as mandatory contributors. The savings sit in the same pooled investment portfolio.

---

For a broader look at how to grow your money beyond EPF, see our guide on investing basics in Malaysia. If you are managing salary budgeting alongside EPF deductions, the Malaysian salary budgeting guide walks through practical allocation frameworks.