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Account 2 Support Facility (FSA2) is a facility introduced by the Employees Provident Fund (EPF). It is created to allow members below 55 years old to make conditional withdrawals from EPF. Through this service, EPF members can obtain financial assistance through personal financing from banking institutions.
9 Important Things You Need to Know About EPF Account 2 Support Facility (FSA2)
Account 2 Support Facility (FSA2) offers a practical temporary solution for EPF members facing cash shortages. It allows members to access cash flow through personal financing without significantly impacting their retirement savings.
Here are some important things you need to know about Account 2 Support Facility before applying for this facility:
1. What is Account 2 Support Facility?
Account 2 Support Facility (or FSA2) is a facility created to assist EPF members in making early applications for Age 50 or Age 55 Conditional Withdrawals. It enables members to obtain personal financing from participating banking institutions.
2. What is the Maximum Financing Amount?
FSA2 involves a maximum financing amount of RM50,000. However, it is subject to the balance in the EPF Account 2, with a repayment period of up to 10 years.
3. Who is Eligible to Apply for FSA2?
The following are the established eligibility criteria for applying for Account 2 Support Facility:
- The applicant must be a Malaysian citizen;
- The application can only be made once;
- It is open to EPF members aged 40 years and above but below 55 years;
- The minimum savings in the EPF Account 2 must be at least RM3,000;
- The maximum amount for conditional withdrawals does not exceed RM50,000 (subject to the approved personal financing amount by the banking institution);
- The application must meet the terms and conditions set by the banking institution.
4. What are the Effects on Members Making Early Conditional Withdrawal Applications?
Once the early conditional withdrawal application is approved by EPF, the loan amount along with the accumulated EPF dividends will be paid to the banking institution when the member reaches the chosen withdrawal age.
In addition, any other pre-retirement withdrawals are subject to the balance in the Account 2 after deducting the amount of Age 50 or Age 55 Conditional Withdrawals.
5. Which Banks Provide Loans for This Account 2 Support Facility?
As of March 30, 2023, only two banking institutions provide loans for this facility, namely:
- MBSB Bank;
- Bank Simpanan Nasional (BSN).
Both banking institutions offer loans with interest rates ranging from four to five percent, which are lower than the current market rates.
6. When Will Phase 1 Applications Be Opened?
FSA2 will be implemented in two phases – for members aged 40 and above (Phase 1) and for members below 40 (Phase 2). Members aged 40 and above can apply for Phase 1, which will be open from April 7, 2023, to April 6, 2024. The application date for FSA2 Phase 2 will be announced later.
7. How to Apply for Age 50 or Age 55 Conditional Withdrawals?
FSA2 applications can be made online through participating banking institutions. For contributors interested in applying for this Account 2 Support Facility, here are three main steps to be taken by members:
i. Preliminary Checking
Conduct a preliminary check of the eligibility of the EPF Account 2 savings through the portal of the participating banking institution.
Online Checking of Allowed KWSP Loan Amount
Check the FSA2 loan amount online through the website https://secure.kwsp.gov.my.
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- Log in to your EPF member account;
- On the Home page, the balance of the Account 2 savings will be displayed. The member’s balance in Account 2 determines their eligibility to apply;
- If the balance in Account 2 meets the requirements set by EPF (minimum of RM3,000), you are eligible to apply for FSA2.
ii. Submit Application
You can submit your personal financing application through the website of your selected banking institution. However, the process depends on the terms and conditions set by the banking institution.
iii. Submit the Application
You need to submit the early application for Age 50 or Age 55 Conditional Withdrawals to EPF through the banking institution’s website. The approved amount of personal financing depends on the respective banking institution.
8. How Do EPF Contributors Repay the KWSP Loan?
The repayment of the FSA2 loan involves several processes involving the contributor, EPF, and the approved banking institution. Here is the repayment mechanism for the KWSP loan through the EPF Account 2:
- EPF will pay the principal amount and accumulated dividends from Account 2 into the member’s financing account with the bank;
- The amount paid by the contributor will be used to settle the outstanding personal financing balance before returning any excess to the member.
9. What are the Consequences if FSA2 Account Support Facility is Not Repaid?
Failure of members to repay or settle the loan can have consequences. Individuals who fail to repay the loan may risk being blacklisted by the banking institution and have a negative record in the Credit Reporting Agency System (CCRIS). Furthermore, there is a possibility that borrowers may be declared bankrupt or restricted from leaving the country.
Before applying for the Account 2 Support Facility, it is important for you to assess your financial status and position to avoid being burdened with financial risks that can be overwhelming.
EPF Savings: Retirement Savings for Future Protection
Hopefully, this guide on the Account 2 Support Facility (FSA2) has helped you understand its impact on your savings and enable you to better plan your finances.
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