By Durratul Ain Ahmad Fuad
KUALA LUMPUR, March 28 (Bernama) -- The recent announcement of Lembaga Tabung Haji’s (TH) 2024 profit distribution has brought joy to depositors, especially with Hari Raya Aidilfitri approaching.
Many may already be considering withdrawing their TH savings bonus for festive expenses. However, financial prudence is key to avoiding future regret. Using the profit distribution wisely while continuing to save offers long-term benefits.
Consistently saving with TH is not just about growing funds—it is a strategic approach to easing financial preparations for the Hajj pilgrimage.
THE POWER OF CONSISTENT SAVINGS
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted the compounding benefits of consistent savings in TH without frequent withdrawals.
“For instance, saving RM200 a month in TH for 10 years, assuming a dividend rate of three per cent, would yield RM28,339 in the tenth year,” he told Bernama.
He noted that the 3.25 per cent rate surpasses the long-term average inflation rate of 2.50 per cent and the average 12-month fixed deposit rate of 2.70 per cent.
“This makes it a competitive return, aligning with TH’s low-risk investment strategy,” he said.
Meanwhile, Associate Professor Dr Muhammad Irwan Ariffin of the Department of Economics, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia (IIUM), said regular savings in TH allow depositors to accumulate the minimum RM1,300 needed for early Hajj registration.
The queue for Hajj operates on a ‘first come, first served’ basis.
“Stable savings enable depositors to benefit from TH’s annual dividends without relying entirely on their principal savings,” he said.
SHARIAH-COMPLIANT INVESTMENTS, GOVERNMENT GUARANTEE, AND ZAKAT BENEFITS
Muhammad Irwan emphasised that TH’s shariah-compliant, government-backed, tax-free system, with zakat already deducted, ensures depositors’ earnings are both secure and clean.
“Unlike other financial institutions, TH offers a unique advantage—zakat payments on behalf of depositors.
“According to a Fatwa issued on May 3, 1979, savings in TH fall under a wakalah contract, meaning TH pays zakat on all deposits and profits. As a result, the profit distribution depositors receive is ‘clean’ or net of zakat, unlike savings accounts elsewhere, where zakat deductions reduce net returns,” he explained.
He added that TH invests in halal, high-impact sectors, including fixed income instruments, equities, real estate, and money market instruments that contribute to the national economy.
“Saving with TH is not just about preparing for Hajj—it also supports Islamic economic empowerment, benefiting individuals and society,” he said.
PROFIT DISTRIBUTION BOOSTS HAJJ SAVINGS AND FINANCIAL AWARENESS
TH’s announcement of a 3.25 per cent profit distribution for the financial year ending Dec 31, 2024—the highest since 2018—demonstrates its commitment to offering competitive and sustainable returns.
Ishak Abd Rahman, senior lecturer at the Faculty of Economics and Management, Universiti Kebangsaan Malaysia, noted that despite global and domestic economic uncertainties, this profit rate reflects TH’s prudent investment strategies and sound governance.
He said the distribution not only benefits depositors but also raises awareness of the importance of consistent savings for Hajj.
“Stable returns encourage more Muslims to start saving earlier, fostering greater financial awareness and long-term Hajj planning,” he said.
He also pointed to the rising number of TH depositors, which reached 9.54 million in 2024, compared to 9.15 million in 2023 and 8.77 million in 2022.
“This growth enables TH to channel more funds into investments with the potential to generate higher returns,” he said.
As an Islamic financial institution, TH provides a secure and shariah-compliant savings platform while also promoting financial literacy among Muslims through a structured savings system.
TH’s role aligns with the vision of its founder, the late Royal Prof Dr Ungku Abdul Aziz Ungku Abdul Hamid, who sought to create a dedicated Hajj savings fund while fostering a savings culture among Malay Muslims.
“This competitive profit rate incentivises depositors to continue saving, ensuring they can perform Hajj within a reasonable timeframe while securing their financial future,” Ishak added.
-- BERNAMA
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