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Should You Invest Your EPF Account I Savings?

Should You Invest Your EPF Account I Savings?
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Ever since 2007, your EPF account has been divided into two separate accounts. In the past, there was only one EPF account with one set of regulations; now there are two. Account I consists of 70% of your retirement savings. Account II consists of 30% of your savings. You can only withdraw money from Account II before you are 55 years old. You can withdraw money from Account II for expenses that bolster the economy and help move people closer to a middle-class life. Those are expenses such as purchasing a first house, investing in a business, or having your first child. You can also begin to withdraw Account II funds at age 50. Account I, which holds the majority of your money, is great for investment purposes.

Account I Investments

Because you cannot withdraw money from Account I until you are 55, that is a large pile of money sitting unused. Also, after you retire, you will likely only have Account I as your source of income. Those who are on a fixed income such as EPF are often subject to significant kinds of stress. Since your income is static, you can’t alter it to respond to different expenses. Sudden expenses can be costs such as storm damage to your house, car troubles, or a whole host of other things. With a fixed income, you might not have enough money to stretch because you don’t know how long it might last. That’s why so many people need to learn about EPF Account 1 investment opportunities.

Typically, to invest your Account I funds, you must be 54 years or younger. Banks often want investors under 55 because that creates a stability to the investment. Since you cannot withdraw funds from your Account I until you are 55, investing it before that age means that you won’t back out of the investment.

Bank Security

The bank that offers you investment opportunities will need some security in its contribution to your investment. Investments, loans, and other bank activities are priced depending on their risk and reward. Investments in stable companies or stable currencies are much less risky so they tend to have lower reward in the short term but much better return in the long run. That makes them perfect for investing your Account I funds. You can invest money that you otherwise cannot use anyway into stable companies.

Since you will not be withdrawing from the investments until at least age 55, the bank knows how to balance its books much better. This creates stability with their considerations; as with all businesses, banks greatly prefer stability. If you are beginning to think about your future, you should definitely consider investing EPF funds. These are typically long-term investments with solid returns after several years. While that’s not the most exciting type of investment, it’s great for preparing for retirement. You should get in touch with a quality bank to discuss your options. You have several different options for investing your money; you should do so wisely after consulting experts.

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