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Annuities Commodity (Malaysia)
Rachel Goh Yik TengMA0N0236
Managerial Finance
Real Cases Presentation
What is Annuities “An annuities is a stream of equal
periodic cash flows, over a specific time period
These cash flow usually annually but can occur at other intervals (monthly)
Inflows – returns earns on investments Outflows – funds invested to earn future
returns
Types of Annuities Ordinary Annuity – the cash flow occurs
at the end of each period Annuity Due – the cash flow occurs at
the beginning of each period
Annuity Commodity in Malaysia
Bank Accounts Insurances Mortgage Hire purchase (Car) Taxes – income tax EPF
Bank Accounts Saving accounts – “maintained by retail
financial institutions that pay interest” (0.25%/annum)
Fixed Deposit account – “provides investors with a higher rate of interest than a regular savings account, until the given maturity date” (3.0% - 3.2%)
Insurances “the equitable transfer of the risk of a loss,
from one entity to another, in exchange for payment”
In Malaysia, Insurance agency provide customized package based on individual needs
Combination: medical, accident, life, saving, investment & etc. into 1 policy
Insurance for cars & houses Payment term: monthly, quarterly, bi-yearly,
or yearly
Mortgage “a loan secured by real property” Based on BLR (Basic Lending Rate) –
6.60% Fix mortgage – the interests rate is fixed
for the whole tenure Flexible mortgage – interest rate is
fluctuated by the BLR, interests rates are varies from different banks
Tenure: up to 40 years
Hire Purchase (Car) “pay for goods in parts or a percentage
at a time”, the rest pay with interests monthly
10% deposit Buyer need to prove income status or
else guarantor needed Tenure: 3, 5, 7, 9 years Interest: varies (depends on the car
company and bank)
Taxes – Income Tax Tax levied on the income of individuals or
businesses Taxable rate (for individual) – up to 26% Minimum taxable income – RM2,500/mth Taxable rate (for businesses) – 25% Filing: yearly (own submission) or monthly
(employer will deduct from the salary) Tax deduction: insurance, books, medical
fee for parents, sport equipment & etc
EPF (Employees Provident Fund) “compulsory savings plan and retirement
planning for legally employed workers” save a fraction of employee’s salary Both employee and employer have to
contribute to this fund monthly Employee – 11%, employer – 12% (min) Dividends – EPF only obliged to provide 2.5%.
As to-date, EPF provides 6% Withdrawal is allowed for certain
circumstances
~~ THANK YOU ~~