Kuala lumpur: The Employees Provident Fund (EPF) Shariah-compliant savings option not only can purify earnings but also provides contributors with competitive dividend yields that will not be detrimental to them, an economist said.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that through the Simpanan Shariah account, Muslim members have an opportunity to purify their earnings and retirement savings. In terms of investment, Simpanan Shariah also offers optimal returns.

He emphasized that efforts by the EPF to seek investment opportunities need to be intensified and should not be confined to the domestic market but also extended to the global market. Simpanan Shariah returns last year reflect a competitive dividend, justifying the switch to Shariah-compliant savings from a commercial standpoint without disadvantaging members.

Dr Mohd Afzanizam was commenting on the Selangor Islamic Religious Council’s (MAIS) move to establish a strategic partnership with the EPF to strengthen the understanding of Shariah-compliant wealth and financial management among Muslims in the state. This collaboration will promote the Simpanan Shariah account and encourage Muslims to purify their earnings by contributing to a Shariah-compliant account.

It was reported that MAIS recorded a collection of RM2.7 million in non-Shariah-compliant funds last year, indicating that many individuals in Selangor were still involved with financial sources that are not Shariah-compliant.

Meanwhile, Dr Mohamad Idham Md Razak, the coordinator at Universiti Teknologi MARA’s Malaysian Academy of SME and Entrepreneurship Development (MASMED), said that EPF’s Simpanan Shariah offers a major advantage in terms of peace of mind and moral conviction. He explained that Shariah-compliant investments, unlike conventional investments, adhere to Shariah guidelines without involving elements of riba, gharar, or maisir.

According to Mohamad Idham, Shariah-compliant investments are generally more prudent and ethical, focusing on real assets and businesses based on true values, making them more sustainable in the long term although the returns may be slightly different from conventional investments.