PRS is like unit trust but the money is locked until your retirement. It's invested according to its mandate. Despite the market risk, the potential gain is normally higher than FD in a long term.

However, whether it is worth to invest in it depends on the individual.

For youth below 30, it's good to invest at least RM 1k in order to get another RM 1k (Intial Roi = 100%).

For tax relief, it depends on your monthly salary. If you don't earn much, you won't be taxed much. So, you don't save much. For example, if your taxable income is taxed at 5% max, you'll only get RM 150 for investing RM 3000 for that year. Normally, when we don't earn much, a huge portion is used to pay the monthly expenses (food, rent, loyer, etc). So, there is not much money left to save. People tend to keep the reminder money in FD or unit trust which they can use in a short-mid term horizon.

For those who are earning very well, it will be interesting to place the 3k in PRS, in order to recover a higher amount of tax. At the same, they have higher disposable income. So, they don't mind locking a small portion of their money until retirement.

So, yeah. The catch is that the money is locked until your retirement. The choice depends on your monthly salary and your level of comfort.

You can withdraw money from account B of PRS but you will get taxed.

If not mistaken, only death and permanent departure to overseas can get full withdrawal - account A & B.

You can contribute anytime you want regardless the amount. It's an optional contribution.

This post has been edited by Gabriel03: Dec 16 2018, 01:35 PM

You can sign up at
1/ PPA Website
2/ Fundsupermart
3/ eunittrust
4/ Banks

Some PRS fund impose sales charge but I know that Fundsupermart don't charge. Have to check the details at those website for more info. I personally use Fundsupermart as I have already an account with them and their interface enables easy tracking.

The fees (annual fee, trustee fee, sales charge, etc) varies according the fund. Depending on your risk tolerance, you can check out the previous posts for other members' arguments on which fund is the best.

This post has been edited by Gabriel03: Dec 16 2018, 05:26 PM

Youth <30- min 1k

In your case, calculate how much you will get from tax and decide. There is no recommended threshold. People use PRS for the Youth incentive and tax relief.

For investment, they can opt for regular unit trust where they can withdraw whenever they want.

I think that you're confused between tax relief and tax rebate.

Let's just use your example of paying RM 600 of tax in a year.

Tax rebate - very few possibilities. Most famous one is zakat. If u pay RM 300 in, then you need to pay only RM 300 in tax. In short, tax rebate subtracts from the total tax that you need to pay.

Tax relief reduces your taxable income. The taxable income is calculated by subtracting the tax relief from your total annual income. For example, if you earn RM 48k in gross annual income and you get RM 3k for PRS, your taxable income decreases to RM 45k. There are other tax reliefs to be added like EPF, SOCSO, etc.

Fyi, the taxable income is taxed from 0% to 28%. So, if you earn 1 million a year, your highest tax range is 28%. For 3k in PRS, you save RM 840.

So, if you are paying RM 600 for this year, your maximum taxable income is at 3% for 2018. So, by putting RM3k into PRS, you get a tax refund of RM 90.

This post has been edited by Gabriel03: Dec 17 2018, 12:02 AM

That's why there is pros and cons depending on your salary. Bear in mind that the money is yours but it's locked until retirement. You can partially withdraw but you will get tax penalty.

It depends on your confort zone as you might need that 3k in a few years to come??? Idk... You have to determine it yourself.

You're welcome.

Also, do remember that if you're less than 30 years old, it's best to invest 1k by end of this year. This is because the government gives 1k into ur prs account if you contribute at least 1k (one time deal until end of 2018). For this case, I agree that you should place 1k regardless of your salary because your Roi is 100% thanks to Msia gov.

This post has been edited by Gabriel03: Dec 17 2018, 12:14 AM

The RM 8 is linked to PPA charges. Nevertheless, your PRS provider will send you an annual statement in early next year. At there, you will see that it is stated RM 3000 despite the RM 8 charge.

Don't forget that you have been receiving profit every year in terms of tax relief. Depending on your annual salary, the profit can be from 1% to 26%.

In my point of view, I invest in PRS solely for tax relief benefits. I have other long term investments where it is easier to tweak since there is less restrictions compared to PRS. Furthermore, the PRS fund are mostly focus on Malaysia or Asia Pacific Market, thus limits the choice of investment.

I'm planning to withdraw the 1.5k to invest the money elsewhere. So, i sell the investment low but I get to invest somewhere else at a lower price.

However, I will only go through with it if LHDN don't declare that the tax for PRS is the net flow (deposit - withdraw) like in Sspn.

Please check of there is a sales charge for PRS at PPA.
At FSM, there is no sales charge.