In this modern era, family financial management is not only about saving but also about how to make smart financial decisions. One important aspect of financial management is carefully managing income tax assessment. This is where savings in Simpan SSPN play an important role for parents in Malaysia.
As parents, surely you want the best for your children's future. One smart step is by opening a savings account for them. Did you know, by saving in Simpan SSPN for your child's education, you can also enjoy income tax assessment relief?
Let's find out more in this article.
What is Simpan SSPN?
The National Education Savings Scheme (SSPN), now known as Simpan SSPN, is an initiative by the Malaysian Government to assist parents in saving for their children's education from as early as one (1) day old. Simpan SSPN is open to all Malaysian citizens and offers two (2) savings product options, which are: Simpan SSPN Prime and Simpan SSPN Plus.
Simpan SSPN Prime
Savings products to cultivate the habit of saving among parents for the purpose of higher education for their children while they are still young.
This product has no monthly commitment where depositors are free to make savings at any time and only require a minimum of RM20 for account opening.
Simpan SSPN Plus
The improved savings product with takaful protection offers six (6) package options according to the choice of the takaful operator company selected, such as:
- Hong Leong MSIG Takaful Berhad (HLMT),
- Great Eastern Takaful Berhad (GETB)
- Takaful IKHLAS Family Berhad (TIFB)
This affordable Simpan SSPN Plus product has become the top choice for Malaysians, featuring savings options. as low as RM30 monthly.
Benefits of Simpan SSPN
Simpan SSPN offers a variety of attractive benefits, including the following:
- Income tax assessment relief up to RM8,000*
- Benefits of Simpan SSPN Plus takaful protection up to RM1.2 million*
- Benefits of critical illness takaful protection
- Hospital admission allowance
- Matching grant up to RM10,000 for eligible families through Simpan SSPN Prime
- Competitive dividends
- Shariah compliant savings and free from questionable elements
- Government guaranteed savings
- Death benefits (spouse & children)
- Eligible to apply for PTPTN loans
- Draws & campaigns
*Terms & conditions applied
Nomination Benefit
Allows PTPTN to release the Simpan SSPN savings to the account of a deceased depositor to the nominated person for administration (for Muslims) or receipt (for non-Muslims) immediately without the need to submit a Probate Grant/Administration Order/Distribution Order.
How does Simpan SSPN help in managing income tax assessment?
Simpan SSPN provides income tax relief benefits to depositors who have beneficiaries (children). Savings made into a Simpan SSPN account can receive income tax relief with a maximum limit of RM8,000.
This means that the amount saved through Simpan SSPN can reduce the taxable income amount, thus lowering an individual's annual tax liability. This benefit is not only advantageous but also encourages depositors to make long-term savings for their children's education.
Learn more and get a free e-book about the benefits of tax relief with Simpan SSPN here.
Strategies to maximize the benefits of Simpan SSPN
The best strategy to enjoy the benefits of Simpan SSPN is to start saving early. Parents are highly encouraged to open savings accounts for their children as early as one (1) day old and make regular savings through salary deductions or direct debits.
You should also set long-term savings goals, and following a consistent savings plan can help maximize the financial benefits and income tax relief obtained.
Common Mistakes
One of the common mistakes often made is delaying the opening of a savings account for the child..
Ideally, parents should open an account as early as when the child is 1 day old. The earlier you start saving, the more benefits you will gain.
The consequences of delaying savings from an early age of a child
If parents often delay starting to save, they will miss out on the benefits received by depositors who save from an early age. For example, consider the comparison schedule below. Mr. Ali starts saving RM2,400.00 every year from the first year to the 10th year and then stops saving. As a result, Mr. Ali's total savings at the end of the 20th year is RM44,358.84 with a total deposit amount of RM24,000.00.
In contrast, Mr. Amirul does not save during the first ten years and only starts saving RM2,400.00 each year from the 11th to the 20th year. Even though the total deposit made by Mr. Amirul is also RM24,000.00, his accumulated savings at the end of the 20th year is RM29,967.24 yang lower than Mr. Ali's..
Costs of Delaying Savings
| Mr. Ali | ||
| Year | Annual Deposit (RM) | Accumulated Savings* (RM) |
| 1 | 2,400.00 | 2,496.00 |
| 2 | 2,400.00 | 5,091.84 |
| 3 | 2,400.00 | 7,791.51 |
| 4 | 2,400.00 | 10,599.17 |
| 5 | 2,400.00 | 13,519.14 |
| 6 | 2,400.00 | 16,555.91 |
| 7 | 2,400.00 | 19,714.14 |
| 8 | 2,400.00 | 22,998.71 |
| 9 | 2,400.00 | 26,414.66 |
| 10 | 2,400.00 | 29,967.24 |
| 11 | - | 31,165.93 |
| 12 | - | 32,412.57 |
| 13 | - | 33,709.07 |
| 14 | - | 25,057.44 |
| 15 | - | 36,459.73 |
| 16 | - | 37,918.12 |
| 17 | - | 39,434.85 |
| 18 | - | 41,012.24 |
| 19 | - | 42,652.73 |
| 20 | - | 44,358.84 |
| TOTAL | 24,000.00 | 44,358.84 |
| Mr. Amirul | ||
| Year | Annual Deposit (RM) | Accumulated Savings* (RM) |
| 1 | - | |
| 2 | - | |
| 3 | - | |
| 4 | - | |
| 5 | - | |
| 6 | - | |
| 7 | - | |
| 8 | - | |
| 9 | - | |
| 10 | - | |
| 11 | 2,400.00 | 2,496.00 |
| 12 | 2,400.00 | 5,091.84 |
| 13 | 2,400.00 | 7,791.51 |
| 14 | 2,400.00 | 10,599.17 |
| 15 | 2,400.00 | 13,519.14 |
| 16 | 2,400.00 | 16,555.91 |
| 17 | 2,400.00 | 19,714.14 |
| 18 | 2,400.00 | 22,998.71 |
| 19 | 2,400.00 | 26,414.66 |
| 20 | 2,400.00 | 29,967.24 |
| TOTAL | 24,000.00 | 29,967.24 |
Loss: RM14,391.60
Note: The annual dividend assumption for Simpan SSPN is 4.00%.
In summary, saving from as early as your child's 1st year can have a significant positive impact on the growth of savings through dividend benefits, as shown in the comparison table above, where Mr. Ali, who started saving earlier, eventually achieves a much higher accumulated amount compared to Mr. Amirul, even though both have the same annual deposit amount.
4 easy steps to open a Simpan SSPN Account
Opening a Simpan SSPN account is very easy. You just need to download myPTPTN and register your myPTPTN account. Then, you can follow the easy steps below:
Step 1 - Log in to myPTPTN
- Enter your Identification Number and Password
Step 2 - Opening a Savings Account
- Click on "Pembukaan Akaun Simpanan"
- Click on "Simpan SSPN Prime/ Simpan SSPN Plus"
- Click on "BUKA AKAUN"
Step 3 - Complete the information
- Fill in all the information completely
- Check the account opening information and make a self-declaration acknowledgment
- Click on "SETERUSNYA"
Step 4 - Perform the transaction
* Choose the Payment Method
- Click on "SAH & BAYAR"
DONE!
FAQs
Parents and legally appointed guardians who save in Simpan SSPN Prime and/or Simpan SSPN Plus for the benefit of their child (beneficiary) are eligible for income tax assessment relief.
Depositors are eligible for Simpan SSPN income tax assessment relief if PTPTN receives the deposit by December 31st. For depositors making deposits through channels other than PTPTN counters, it is recommended to make the deposit no later than December 25th each year.
You can check your Simpan SSPN account balance through myPTPTN. Download myPTPTN here and register your myPTPTN account.
Start the smart move by opening savings accounts for your children. Not only can you assist them in the future, but you can also enjoy income tax assessment relief and various benefits offered. Don't miss this opportunity! Open a Simpan SSPN account now.
