All parents should take advantage of Skim Simpanan Pendidikan Nasional (SSPN) which is The National Education Savings Scheme that provides a smart way for Malaysians to save money for their children’s education and lower their annual income tax payments at the same time.
It was designed by the National Higher Education Fund Corporation (also known as PTPTN or Perbadanan Tabung Pendidikan Tinggi Nasional) to help parents and guardians save money for their child’s higher education.
Apart from tax benefits, SSPN offers competitive dividend rates and a number of other benefits such as:
- Tax relief for current year’s net savings of up to RM3,000 per annum
- Free insurance coverage for depositors with savings of RM1,000 and above *
- Matching grants of up to RM10,000 for eligible families **
- Savings as low as RM20 at any time and guaranteed by the government
- Competitive dividend rate and exemption from income tax
- Saving facilities at more than 1,500 PTPTN agents
- Savings convenience through salary deduction
* Insurance coverage in the form of benefits and / or death benefit is offered to depositors aged 18 to 65 years, while beneficiaries aged 1 day to 28 years are entitled to death benefit only in the event of death. Nevertheless, it is subject to the conditions and regulations.
** Families with a monthly income (basic salary) not exceeding RM2,000 per month are eligible to be considered for matching grants when the child is accepted into and registered with a higher education institute recognised by the government.
This scheme is particularly helpful for low income families who might be entitled to a matching grant of up to RM10,000. The amount of grant provided is determined by the savings amount and period so it is advisable to start a SSPN account for your kids as soon as possible and save as much as you can.
Opening a SSPN-i Account
It’s easy to open a SSPN-i account as the minimum deposit is only RM20. Just go to the PTPTN service counter at One-Stop Centre, KL Sentral or any branch of the PTPTN agent banks with the required documents:
- Copy of MyKad / military card / police card of the applicant
- Copy of child’s birth certificate / MyKid / MyKad
- Testimonial / Certificate of Adoption (for parents intending to open an account for the adopted child under their legal custody)
As an account holder, you will receive a SSPN-i card.
SSPN Account Types for Different Age Groups
There are 3 age categories for opening SSPN accounts:
- Account opened by the parents / guardian or other Malaysian citizen for any Malaysian citizen aged 18 years and below and may be maintained up to the age of 28
- Malaysians aged 18 and above have an option of opening their own accounts or have it opened by their parents / guardian
- Malaysians aged 29 and above have to open their own accounts
How to Deposit Money into a SSPN Account
There are lots of ways to deposit savings into a SSPN account:
- Increase in deposits can be made through myBayar SSPN-i . For more information please visit www.malaysia.gov.my.;
- SSPN-i account statement and the statement of tax relief can be reviewed or printed via the website at www.ptptn.gov.my;
- PTPTN service counter at the One Stop Center, KL Sentral / One Stop Center, Putrajaya / Info Center Sabah /Sarawak Info Center;
- Saving facilities through salary deduction is allowed; and
- Saving facilities at 6 agent (bank), which has more than 1,500 branches throughout Malaysia
The easiest way is probably to choose one of the facilities from PTPTN or the agent banks that is most convenient for you:
- Over the Counter
- Online Banking
- Via the PTPTN website (e-SSPN)
- Direct Debit
- Standing Order
- Phone Banking
If you’re a Maybank customer, depositing should be straight forward as they offer all the options apart from direct debit.
SSPN Agent Banks
These are the 6 agent banks where you can open a SSPN-i account and deposit money:
- Agro Bank
- Bank Kerjasama Rakyat (BKR)
- Bank Simpanan Nasional (BSN)
- Bank Islam Malaysia Berhad (BIMB)
- CIMB Bank Berhad
- Maybank Berhad (MBB)
SSPN Account Deposit Rates
As an Islamic banking product, SSPN-i accounts provide dividends/profits instead of interest rates. In the last 2 years, the rate of dividends/profits were 3.25% (2010) and 3.75% (2011).
When compared to regular Education Savings Accounts, these rates may appear to be better but they are quite average in comparison to Fixed Deposit accounts.
However, to calculate the real rate of return from a SSPN account, the tax relief benefits should be included. Once this is accounted for, the rate is a lot higher.
How Much Do I Need to Save
The amount and frequency of deposits to your SSPN account depends on how much you can afford or how much you would like to accumulate for your child.
As a reference, there is a Savings Estimate on the PTPTN site that shows how much you will save if you deposit different monthly amounts ranging from RM20 to RM100 and assuming that there is a 4% per year dividend for the entire period of the savings from 1 to 17 years.
On the high end, if you put RM100 into the account every month, after 17 years, your child will have about RM29,000. This means that you can accumulate almost RM100,000 by the time your newborn is ready for higher education by saving around RM300 each month.