Skim Simpanan Pendidikan Nasional (SSPN)

What is SSPN?

SSPN scheme is a savings scheme created and managed by Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) with the intention to encourage Malaysian to save for their children's education needs. This scheme offers various benefits including personal income tax deduction for the savings. 

This SSPN savings scheme is perfect for new parents who wish to save for their children’s future tertiary education, be it in colleges or universities. What makes SSPN a good option as a future savings scheme is that it provides some pretty attractive incentives aside from mere savings : SSPN also comes with insurance coverage, matching grants for low income families, annual dividends, and the most attractive benefit, tax relief on your net savings in a particular year.

SSPN-i : A new and improved SSPN, with “i” standing for Islamic. (you don’t need to be a Muslim to apply though)

Who HAS to Open a SSPN-i Account

Those who wish to apply for a PTPTN loan must have an SSPN-i account with a minimum balance of RM20. However, do check with PTPTN before opening an account because they tend to change this particular rule every now and then.

Who CAN Open a SSPN-i Account

Any Malaysian is eligible to have a SSPN-i account. The best candidate for SSPN-i accounts are people with children or dependents, we will explain this in more detail below.

SSPN-i : Opening an Account

We’ll give you the step by step guide on how to open an SSPN-i account!

Step 1 : Determining Your Age Category and Eligibility
Age Group : 1 to 18 years

Account must be opened by parents / legal guardian. Account can be maintained until the child turns 28. After the age of 28, He or she has to open his or her own account.
Age Category: 18 to 28 years

Malaysians aged 18 to 28 have an option of opening their own accounts or have it opened by their parents / guardian.
Age Group : 29 and above

Malaysians aged 29 and above have to open their own accounts.

Step 2 : Where To Open Your SSPN-i Account

You can either open an account at the PTPTN service counter at One Stop Center in KL Sentral or at these following banks :

• Bank Simpanan Nasional (BSN)
• CIMB Bank
• Maybank
• Bank Islam
• Bank Rakyat
• Agro Bank

Step 3 : Documents needed

The documents that you need in order to open an account are as follows :
Three copies of the account application form (Borang Permohonan Pembukaan Akaun) which can be obtainedonline OR can be obtained FREE at One Stop Center or Banks listed above.

• A copy of the depositor’s MyKad, military ID or Police ID
• A copy of the beneficiary’s birth certificate or MyKid or MyKad
• A copy of certificate of adoption / legal documents (for adopted beneficiaries)
• A minimum of RM20.00 is required to open an account (but typically more to qualify for SSPN benefits)

SSPN : Features & Benefits

What makes SSPN different from regular banks are the benefits that they offer, which we will list down for you!

1. Income Tax Relief 

Parents or legal guardians who open an SSPN account for their children / child as the beneficiary are eligible for income tax relief up to RM6,000 per year. 

Working parents with separate tax submissions and separate SSPN accounts dedicated to the same beneficiary (the same child) are given a separate tax relief to the maximum of RM 3,000 to each parent per year.

Parents with a joint taxation but own a separate SSPN account each, but for one child (the same child) will get up to the maximum of RM6,000 per year combined.

By depositing into your SSPN-i account every year, you can reduce your chargeable income even further up to a limit of RM6,000. 

But what if I have no beneficiary (SSPN-i is My Own Account)

Most will probably wonder, can I still get this income tax relief benefit if I don’t have a beneficiary ie. you open an account for yourself? Unfortunately not. Opening your own account will not make you eligible for the income tax relief, plus you will be subject to the strict withdrawal restrictions.

2. Insurance Coverage

SSPN offers depositors free death insurance coverage, but only if the saving is RM 1,000 and above in the SSPN account. The terms for this coverage are as follows:

• Depositors aged 18 years – 65 years : Entitled to insurance coverage & death benefits
• Beneficiaries aged 1 day – 28 years : Entitled to death benefits
• Insurance coverage is split into two : General Insurance (For individuals) and Trust Insurance (Insurance Amanah-opened by head/management representative of orphanage)
• Insurance coverage is paid RM to RM for general insurance (up to RM 50,000)
• Insurance coverage is RM 100,000 for Insurance Amanah or Trust Insurance
• Death Benefit is RM 2,000 for depositors and RM 500 for beneficiaries

3. Yearly Dividend (Interest on Savings)

Another perk of SSPN is its yearly dividend rate or profit. Its certainly not high or market leading, so with the withdrawal restrictions (explained below) in place, one would probably not chase this account for its high ‘dividend’. 

On a seperate note, this dividend income is exempted from income tax (its effectively interest, so treated the same as normal bank interest). In the past, the dividend rates were as follows :

• 2004 = 3%
• 2005 = 4%
• 2006 = 4%
• 2007 = 4%
• 2008 = 4%
• 2009 = 2.5%
• 2010 =  3.25%
• 2011 = 3.75%

4. Matching Grant for Low Income Families

The Matching Grant (Geran Sepadan) is another benefit of opening an SSPN-i account. Basically, a matching grant is a financial incentive that aims to help parents with an income of RM2,000 per month or less by giving them financial endowment of up to a maximum of RM10,000. 

The sole purpose of this incentive (other than to help ease the financial burden of lower income parents) is to encourage low income depositors to deposit more money and increase their SSPN account savings.

Eligibility:
Depositors with children and have a combined household income of RM 2,000 or less at time of account opening. The matching grant will become eligible as soon as a child is accepted into a diploma or degree in a higher learning institution approved by the government.

Combined household income = Income from father + mother < RM 2,000

If you fit the eligibility terms above and thinking of applying for a matching grant, the amount depends on your savings and savings period. Naturally, the higher and longer your savings, the more you will get (but maximum is RM 10,000).

New Rules

PTPTN is notorious for its ever changing terms and conditions, but here are the new rules for applying a matching grant:

Depositors who Open an SSPN-i Account From 15 January 2010 - Eligibility for the matching grant is based on the depositor’s family income during savings withdrawal or account closing. 

A copy of the latest salary slip / income statement certified by an authorised person and a copy of MyKad / military card / police card of the spouse is needed for depositors with a monthly family income (basic salary) not exceeding RM2,000 for consideration of the matching grants during savings withdrawal or closing of the account.

Existing Depositors with an SSPN-i Account Before 15 January 2010 - However, for existing depositors who opened an account before 15 January 2010, determination of eligibility for the matching grant remains the same, that is, based on family income of the depositor during account opening. A copy of the salary slip / income statement produced during the opening of the account must be certified by an authorised person and copy of MyKad/military card / police card of the spouse is needed for depositors with a monthly family income (basic salary) not exceeding RM2,000 for consideration of the matching grants.

Beware

Withdrawing money from your SSPN account is not easy. SSPN has very strict rules when it comes to withdrawing your money.

Depositors can only withdraw their money once a year, and the maximum amount that is allowed to be taken out is RM 500 or 10% of your total savings.

A 100% withdrawal is possible but will require the beneficiary’s offer letter to local university or colleges, a vague statement on the beneficiary ‘no longer wishing to participate in the educational process’, or in the event of the beneficiaruy’s / depositor’s death or incapacitation.

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