The Malaysian Employees Provident Fund Board (KWSP) has announced a dividend payout rate of 6.10% for conventional CPF accounts and 5.65% for Islamic CPF accounts.
The Employees Provident Fund Board will remit the dividend payout to members’ accounts on March 6, when CPF members can check their deposits and the interest earned through KWSP i-Akaun.
I believe many of you will try to calculate the interest you can earn, but no matter how you calculate it, you will not get it right.
Here is an example of RM100,000 deposit. Many people just put RM100,000 X 6.10%, which will give you RM6100. In fact, the interest of CPF is not calculated simply like this because the interest of CPF is calculated on a daily basis, not on an annual basis. The CPF Board uses a computer program to calculate it, so if you do the calculation manually, it will be a very laborious and unpleasant task.
CPF Board’s annual interest calculation method.
Calculation method for January.
First account ((total accumulated balance of the first account X number of days in the month) + (quota for the month X 1 day) X interest))/365 days
Second account ((total accumulated balance of the second account X number of days in the month) + (quota for the month X 1 day) X interest))/365 days
Calculation for February.
First account ((total accumulated balance of the first account + total quota of the previous month) X number of days in the month) + (quota of the month X 1 day) X interest)) / 365 days
Second account ((Total accumulated balance of the second account + total quota for the previous month) X number of days in the month) + (quota for the month X 1 day) X interest))/365 days
-This calculation method is used until December to arrive at the total interest for the year.
Example: Interest calculation method for January
The first account ((70,000 X 31 days) + (700 X 1 day) X 6.10%))/365 days
Second account ((30,000 X 31 days) + (300 X 1 day) X 6.10%)) / 365 days
Interest calculation for February
First account ((70,700 X 28 days) + (700 X 1 day) X 6.10%))/365 days
Second account ((30,300 X 28 days) + (300 X 1 day) X 6.10%)) / 365 days
