Sunday, December 15, 2013

It is confirmed. OCBC Titanium Mastercard changed cash-back rebate terms

This has been talked about since 1-2 months ago about the Malaysian OCBC Titanium MasterCard implementing a new cash-back rebate terms and conditions effective 29 November 2013.

Well, good things would not last long, and it is now confirmed that cardholders of Malaysian OCBC Titanium MasterCard will get a less attractive cash-back rebate now.

Before the change, these are the benefits of Malaysian OCBC Titanium MasterCard which had been offered for years:

  • 5% cash rebates on petrol, utility bills, groceries and restaurants.
  • 1% cash rebates on other retail transactions.
  • The above is capped at maximum RM50 cash rebate per billing cycle.
  • Waiver of RM50 annual government service tax if spending is more than RM10,000 in the year.
  • Zero annual fee if the card is swiped more than 12 times in the year.
  • Free access to KLIA Plaza Premium Lounge if you swiped more than RM3,000 for air ticket and travelling packages.
This credit card had a unique round cutting at its right side.

Now, the benefits of Malaysian OCBC Titanium MasterCard has become:
  • 1% cash rebates on all retail transactions.
  • There is no cap on the cash rebates.
  • No more waiver of RM50 annual government service tax.
  • Zero annual fee with no condition.
  • No more free access to Plaza Premium Lounge.
This credit card now comes with blue or pink colour, and fall back to normal card's rectangular shape.

Previously, you can easily get RM50 cash rebate per month (or RM600 cash rebate per year) by spending as low as RM1,000 per month on the card. Now, you need to swipe RM5,000 per month to get the same amount of cash rebate. On top of that, you also need to swipe another RM5,000 to offset the RM50 annual government service tax.

As a result, we can anticipate that OCBC will lost a lot of its Titanium cardholders. The OCBC Titanium MasterCard was once among the best cash-rebate credit card in the market, and now that has become a gone history.



Monday, December 9, 2013

Does it worth to put saving in Skim Simpanan Pendidikan Nasional (SSPN-i)?

Now has entered the last month for our income tax planning for year 2013, and no doubt SSPN-i which can bring up to RM6,000 tax relief is one of the major consideration, especially for tax payers who fall in the highest income tax bracket.

The National Education Savings Scheme (Skim Simpanan Pendidikan Nasional, SSPN-i) is setup by the National Higher Education Fund Corporation (Perbadanan Tabung Pendidikan Tinggi Nasional, PTPTN) for the purpose of higher education.

PTPTN is an education financing scheme established for the purpose of providing education financing (government study loan) to Malaysian students pursuing studies in local public or private institutions of higher education.

Over the years, PTPTN has been facing difficulty in getting back the loan repayment from graduated students, and there are RM2.3 billions of unsettled loan as reported in September 2013.

As such, there is little doubt to view SSPN-i to be setup to maintain the cash flow of PTPTN, or new students might not be able to obtain loan from PTPTN as their cash flow dried up.

Back to our question. Does it worth to put saving in Skim Simpanan Pendidikan Nasional (SSPN-i)?

From the income tax saving perspective, if you are in the highest income tax bracket of 26%, and you deposit RM6,000 into the SSPN-i account for your children, you will enjoy a tax relief of up to RM6,000 x 26% = RM1,560.

On top of that, SSPN-i will give tax exempted dividend of about 4% every year. If you only deposit the money in December, you won't get much dividend for this year, and you will need to wait for another year to get your first full-year dividend.

As long as the SSPN-i account has savings of RM1,000 and above, there will be free Group Takaful insurance as below:

  1. Coverage of RM to RM (dollar to dollar) of up to RM50,000 (general insurance)
  2. Death benefit / compensation for the depositor (RM2,000) and the beneficiary (RM500)
The depositor must be 18-65 years, and the beneficiary must be 1 day to 28 years.

There is also a matching grant of up to RM10,000 if your family income is below RM2,000 by the time your child is accepted into and registered with a higher education institute recognised by the government.

If you want to enjoy the tax relief again next year, you need to top up your SSPN-i account with additional savings.

Note that once the money is put inside SSPN-i, it is very difficult to withdraw it. You can only withdraw once per year, up to RM500 or 10% of the savings (whichever is lower). You can only close the account with 100% withdrawal when:
  • Your child is offered a place in any higher learning institution
  • Your child has voluntarily withdrawn from the education system
  • Your child has been expelled for a specific reason
  • Suffering from an illness certified by a doctor as being incurable
  • Experience total permanent disability as certified by a doctor;
  • Death of the child
  • Death of the depositor
Assuming that you keep your RM6,000 in SSPN-i account for 20 years, your total return, including the income tax savings of 26% relief, is about RM8,200.


In order to see whether it worth or not to put the savings in SSPN-i, I have expanded the table above to show the accumulated gain every year, and the annualized return in percentage.
 

As you can see from the table above, it is a good choice to put saving in SSPN-i if your child is above 15 years old and going for tertiary education in 5 years time. You will get the annualized return of approximately 8.6% and above based on 4% dividend rate.

After that, your annualized return will drop due to the low dividend rate, but still comparable to the return rate of Employees' Provident Fund (EPF) which estimated to be around 6% annually.

However, take note that the SSPN-i dividend between 2009-2011 are below 4%:
  • 2009: 2.5%
  • 2010: 3.25%
  • 2011: 3.75%
  • 2012: 4.25%
So it is not guaranteed you will get 4% dividend every year.

What if the dividend rate is estimated at around 3% per year? The table will be as below:


It is still a good choice to put your money in SSPN-i with an estimated dividend rate of 3% per year, for a period of below 5 years. More than that, there are a lot of investment instruments for your consideration which can give better return.

What if the estimated dividend rate dropped to 2%? The table will be as below:


Well, I think you won't consider it at that kind of dividend rate if your child is less than 10 years old now.

You might probably be interested to also read about:

Sunday, December 1, 2013

Astro offers free On-The-Go (OTG) service to all subscribers until 15 Feb 2014

Parallel to the recent Astro price hike to sport pack and family pack in September 2013 which affects most of their subscribers, Astro has made an offer to all its subscribers to have FREE access to Astro On-The-Go (OTG) until 15 February 2014 to watch/listen some of their TV and radio channels over the Internet using either web browser from computer, or Android smart mobile devices (phone/tablet), or Apple smart mobile devices (iPhone/iPad).

Note that not all the channels in your Astro subscription are available in OTG, only some of them are made available. One of the good OTG features is Catch-up TV, which enables you to watch your favourite TV programme and/or drama that you have missed out when they are on show in Astro live TV.

In order to access Astro OTG, you need to register for an Astro ID that link to your Astro subscription account.

To access to Astro OTG using web browser, go to https://onthego.astro.com.my/ and login your Astro ID.


To access Astro OTG with your Android smartphone or tablet, install the Astro On-The-Go app from Google Play Store here: https://play.google.com/store/apps/details?id=com.astro.astro



To access Astro OTG with your iPhone or iPad, install the Astro On-The-Go app from iTune App Store here: https://itunes.apple.com/my/app/astro-on-the-go/id521993797

After 15 February 2014, this Astro OTG will still be free to Superpack, Multiroom and Sports Pack subscribers.

Hint: Click on the "Older Posts" link to continue reading, or click here for a listing of all my past 3 months articles.