Managerial
Finance
Real Cases
Presentation
Annuities
Commodity
(Malaysia)
Rachel Goh Yik Teng
MA0N0236
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
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“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)
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“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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