Once GST is implemented in 2015, many are expecting the inflation rate for Malaysia to increase. With that in mind, many Malaysians are searching for passive investment that could generate returns that are equal or higher then the inflation rate in order preserve the value of their savings.

One of the popular "near" guaranteed passive investment available in Malaysia is Amanah Saham Bumiputera. Amanah Saham Bumiputera or ASB in short is one of the most seek after passive investment by Malaysian Bumiputera due to its consistent dividend and bonus. See historical dividend and bonus for ASB below:

Due to ASB's popularity, most financial/investing/personal finance blog including this one would have written extensively about ASB. In some of my older articles about ASB, I wrote with the perception that dividend and bonus from ASB can be summed into a single value in order to calculate the annual return.

Historical Dividend courtesy of 1-Million-Dollar-Blog |

**A BIG MISTAKE Indeed!**

(Rest assured I've made the necessary amendments to my older articles)

Now if we look at dividend and bonus from a logical point of view, the fact that ASB declares dividend and bonus separately should have raised some doubts. If both are the same, why not just declare everything as dividend only!

This severe lack of understanding on the difference between dividend and bonus has lead many ASB investors to have the following misperceptions:

- Annual return is calculated based on the summation of dividend + bonus
- Dividend and bonus are calculated based on the balance in ASB account as of 31st Dec for each year

If the above are incorrect, then how exactly does ASB calculate their dividend and bonus for investors? Let's take a look...

**Understanding & Calculating ASB**

**Dividend and Bonus**

**ASB Dividend**

**Key Points About ASB Dividend:**

- ASB Dividend and ASB Bonus are calculated differently and separately from one another.
- Dividend is calculated on a monthly basis over the duration of the year dividend is declared. We term the monthly dividend calculation as
**Monthly Dividend Amount.** **Total Dividend Paid**for the year is the Sum of calculated**Monthly Dividend Amount**from Jan till Dec.- To calculate the
**Monthly Dividend Amount**for each month, the**Lowest Account Balance**for each month is used. **Lowest Account Balance**for a month is defined as the lowest value of your ASB account for that particular month. Let's see Example 1 to 3 below:

**Lowest Account Balance (Example 1):**

- On 1st Jan 2013, your account balance in ASB is RM5000
- You withdraw RM1000 on the 3rd of Jan 2013
- You then Redeposit RM2000 into your ASB on the 10th of Jan 2013.
- What is your Lowest Account Balance for Jan 2013?
- Answer is RM4000.00

**Lowest Account Balance (Example 2):**

- On 1st Jan 2013, your account balance in ASB is RM5000
- You deposit RM1000 on the 3rd of Jan 2013
- You then withdraw RM2000 from your ASB on the 10th of Jan 2013.
- What is your Lowest Account Balance for Jan 2013?
- Answer is RM4000.00

**Lowest Account Balance (Example 3):**

- On 1st Jan 2013, your account balance in ASB is RM5000
- You deposit RM1000 on the 3rd of Jan 2013
- You then withdraw RM500 from your ASB on the 10th of Jan 2013.
- What is your Lowest Account Balance for Jan 2013?
- Answer is RM5000.00

**Formula for ASB Dividend Calculation:**

Monthly Dividend Amount

**calculation:**

**Monthly Dividend Amount**from Jan till Dec,

Total Dividend Paid is then calculated using this formula:

**ASB Bonus**

**Key Points About ASB Bonus**

- Bonus is also calculated on a monthly basis which we term it as
**Monthly Bonus Amount.** - The
**significant difference**between Bonus and Dividend is that**Total Bonus Paid**by ASB is the Sum of**Monthly Bonus Amount**calculated from the number of months you've stayed invested in ASB. However this is subjected to a maximum of 120 months or 10 years from bonus declaration year. - In other words, ASB Bonus is calculated based on all the months over a period of 10 years starting from the year bonus is declared.
- To calculate the
**Monthly Bonus Amount**for each month, ASB also uses the**Lowest Account Balance**as part of the calculation. - Let's take a look at examples below:

**No. of Months eligible for Total Bonus Calculation (Sample 1)**

- You have invested into ASB since 1st Jan 2010
- ASB Bonus of 2% is declared for 2013
- How many months will be taken into consideration for Monthly Bonus Amount calculation?
- Answer : 48 months (Jan 2010 till Dec 2013)

**No. of Months eligible for Total Bonus Calculation (Sample 2)**

- You have invested into ASB since 1 Jan 1990
- ASB Bonus of 2% is declared for 2013
- How many months will be taken into consideration for Monthly Bonus Amount calculation?
- Answer : 120 months (Jan 2004 till Dec 2013)*

**Bonus calculation will not include the months from Jan 1990 till Dec 2003 as the bonus is set to a maximum of 120 months or 10 years from the year bonus is declared.*

**Formula for ASB Bonus Calculation:**

**Monthly Bonus Amount**calculation:

By obtaining the Monthly Bonus Amount over a period of 120 months from the year bonus is declared,

**Total Bonus Paid**is then calculated using this formula:

**Sample Calculations**

**Case Study 1 :**

**Invest Lump Sum of RM50,000 starting Jan 2012**

**ASB declared the following for 2012:**

**Dividend 2012 = 7.75%**

**Bonus 2012 = 1.15%**

**What is the Total Dividend Paid, Total Bonus Paid and Actual Annual Rate of Return for 2012?**

Calculation:

Observation:

As you can see, the Lowest Account Balance for Jan 2012 is RM0.00 because this investment started in Jan 2012. If you've started in Dec 2011, then the Lowest Account Balance for Jan 2012 should be RM50,000.

Despite Dividend declared is 7.75% and Bonus at 1.15%, which many tend to sum up as 8.90%, we see that the Actual ASB Annual Rate of Return for 2012 is only 7.21%.

**Case Study 2 :**

**Invest Lump Sum of RM50,000 starting Jan 2011**

**ASB declared the following for 2011:**

**Dividend 2011 = 7.65%**

**Bonus 2011 = 1.15%**

**ASB declared the following for 2012:**

**Dividend 2012 = 7.75%**

**Bonus 2012 = 1.15%**

**What is the Total Dividend Paid, Total Bonus Paid and Actual Annual Rate of Return for 2011?**

**What is the Total Dividend Paid, Total Bonus Paid and Actual Annual Rate of Return for 2012?**

**Calculation for 2011:**

Calculation for 2012:

**Case Study 3 :**

**Invest RM500 monthly starting Jan 2012**

**ASB declared the following for 2012:**

**Dividend 2012 = 7.75%**

**Bonus 2012 = 1.15%**

**What is the Total Dividend Paid, Total Bonus Paid and Actual Annual Rate of Return for 2012?**

**Calculation:**

**Summary**

Finding out how ASB calculates Dividend and Bonus has been a real eye opener for me. This changes my perception on ASB and hopefully assist others to make better decisions when it comes to investing into ASB. A clear cut example for ASB investors is maximized the Dividend and Bonus for ASB through Lump Sum investing instead of monthly. In addition, knowing how the calculation works helps you to chart your financial goals more accurately.

With that I bid all of you Cheers and Happy Investing!

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**shanesee03@gmail.com**on how to start your own long term passive investment.
I have to say, this is really impressive, but y took so long? haha d thing is ive been searching and reading thru out many blogs for advise before i went and took 200k frm maybnk last jan. anyhow lets see how it'll turn out come jan 2nd. Nonetheless thumbs up!

ReplyDeleteBased on findings, could we say that it is good to take ASB loan at the max as we can to maximize the return.

ReplyDeletePlease advise.

From the context of maximizing the return of ASB, I believe lump sum investing would be a wise choice.

ReplyDeleteHowever if you intend to take a loan, please do consider the implication on your credit limit, monthly cash flow as well as the possible risk of not being able to pay up the loan installment.

i took 50k ASB Loan from Maybank, Planning to add on few thousand using OD to invest in ASB..any advice plz..

DeleteI think it is unwise to borrow and invest especially if the loan rate charged by the bank is higher than the current BLR 6.6%. The return of investment is marginally low around 1% and the real inflation rate is over 6%. This exclude the forth coming 6% GST in 2015.

ReplyDeleteRHB Bank offered rates up to BLR -1.70% p.a for ASB loan. Please take note that this is an effective rate. If you convert into falt rates, it is about 2.95% only for 25 years tenure.

ReplyDeleteIn case study 2 (2011): Based on yr 'actual return' calculation, it's not 7.01%, but 7.12%. Numbers can be various, but to really understand the hidden agenda behind it is another thing. What is your agenda to come out with this calculation model?

ReplyDeleteIsn't it obvious? If it isn't allow me to explicitly tell you what the author is trying to do, he's sharing how ASB really calculates returns! What are you trying to illicit by being anonymous?

DeleteBased on yr calculation model in Case Study 2 (2012): Total return in 2012 (dividend+bonus) is actually RM4261.53 (7.96%). R u in the position of saying that external auditors also wrong in performing their job for ASNB?

ReplyDeleteWhy don't you go do your maths. An investor's actual returns are dependant on the time of their investment. Would it be fair for a person who invests RM10k in early January to earn net 8% returns in ASB compared to a person who invests RM10k on 31 Dec the same year?

Deletethis is very helpful

ReplyDeleteHi, I replicated your excel sheet to simulate the actual returns I received for my ASB. I found that your sheet has one mistake with regards to calculating the returns using the lowest balance for the month.

ReplyDeleteIf an investor invests or adds new investments on the 1st of the month, then the lowest amount for the month (i.e previous month's balance) will not be used. Instead the balance + new investment will be used to calculate the returns.

With regards to the Bonus Calculation, there are a few things that doesn't tally with my actual Bonus returns. I'm still trying to figure it out. Will share once I solve it.

Hi Iqbal, I'm trying to calculate my savings earnings if i decide to put in ASNB. Are you willing to share your spread sheet with me please?

DeleteThank you for the sharing.

ReplyDeleteAny suggestion on early settlement? My asb loan are as follows;

Loan: 200k

Insurance: 4,370k

Term: 20 years

Interest: Blr 6.6 - 1.65 (Apr 2013 -Nov 2014) Installment: 1,345/month

Interest: Blr 6.85 - 1.65 (Dec 2014 - current)

Installment: 1,375/month

On top of 200k loan, i have 90k in my asb account (dividen & bonus from previous cash savings).

So far i've let dividen & bonus for 2013 and 2014 to accumulate and compounded the following year.

When do you reckon is the best time to do early settlement (provided i have the money).

Appreciate your reply

The lowest monthly balance for ASB is only calculated form the 7th of each month (till last day of the month).

ReplyDeleteAwesome! TQ

ReplyDelete7th of each month? Nice

ReplyDeletebesides asb provides for bonus, what other funds also provide bonus?

ReplyDeleteTabung Haji and most funds under PNB

DeleteUsing your calculation, it seems that the bonus should have increment every year. but don't know why the bonus 2015 bonus is lower than last year? I don't understand. There weren't any withdraw happened last year.

ReplyDeleteTabung Haji and most funds under PNB.

ReplyDeleteWhat is the eligibility of receiving the bonus? If you were to withdraw money once every few months, are you still eligible for the bonus payout?

ReplyDeleteUsing my ASB earnings for 2015 as example, I managed to derived at the actual dividend earned by using the formula given above. However I could not get the bonus amount using the formula you gave. Perhaps you could elaborate further on how to compute the bonus amount? Just curious on one thing, the higher the denominator the lower the amount will be. How do get the 120 months as the max denominator for bonus computation?

ReplyDeleteI see that the interest is charged only on 11 months instead of 12 months rolling? Why is that? If by 1st January I have 50k, by 31 January I should have the monthly interest factored in rather than on the following month. Your table may be applicable with assumption that investor starts his/her asb deposit in mid january. it all depends on what deposit cut off date ASB defined. correct me if i am wrong

ReplyDeleteI hope you will post more Updates.

ReplyDeleteThanks for the post. .

consistent investment planThe blog was absolutely fantastic, Lot of information is helpful in some or the other way. Keep updating the blog, looking forward for more content…. Great job, keep it up.

ReplyDeleteconsistent investment plan

1. If terminate asb loan early we will get dividen + surrender value/amortization, right?

ReplyDelete2. If we make early settlement of asb loan we get dividen + loan amount, do we get rebate or anything similar?

Thanks

hi,i intend to purchase an apartment PR1MA for RM385K, i foresee that i will only get 70% loan based on the income i earned, but i have some cash..so let say i get RM270K loan, iam planning to meet the payment via ASB dividend by investing RM250K in ASB, what is yr view?

ReplyDelete