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Published byJerome Tyler Modified over 9 years ago
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Annuities Commodity (Malaysia) Rachel Goh Yik Teng MA0N0236 Managerial Finance Real Cases Presentation
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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
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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
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Annuity Commodity in Malaysia Bank Accounts Insurances Mortgage Hire purchase (Car) Taxes – income tax EPF
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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%)
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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
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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
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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)
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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
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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
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