Friday, February 5, 2010

CPF Interest Rates Are High

It seems to me that CPF interest rates for the SMRA is very high. Currently, it stands at potentially up to 5% because of the additional 1% interest that the CPF Board is giving.

Checking my CPF statement lately, I realised that I received closed to $900 in interest for my Medisave Account alone!

That got me thinking into whether I should voluntarily top up my CPF account as this would give me a guaranteed 5% returns (at least till end of this year I hope).

The downside is that I would not be able to draw out the money should I top it up.

What do you think?


  1. Well, if it is money you do not need till you reach retirement age, why not?

    Personally, in the first few years of my working life, I transferred all my funds in the OA to the SA to earn additional 1.5% p.a. I feel, till today, that it was one of the best moves in personal finance I have ever made. Every year, when I look at how much my SA has grown, I smile. The power of compounding. At 4% p.a., it's a 50% growth every 10 years without me lifting a finger.

  2. No. Govt will adjust the SMRA interest rate and peg it to 10-year Government Bond from FY 2011 onwards. Read the news on this. So it is NOT a guaranteed 5% in perpetuity. Don't lock in your cash unnecessarily.

  3. I only know money in that account does not seem to be my money...

  4. Never count those money in your SA; it is as good as "Gone" case. The latest CPF Life has made the money in your SA become the "Personally Untouchable" and more like contributing to the community pool. More new policies relating to SA sure coming one.

    Think thrice!

  5. No, you will never know when you will need the money.

  6. But CPF money is rightfully yours.. even when you pass away, the money goes to your estate.

    Which is worse? Your CPF account or a whole life policy that you buy from an insurance company?

  7. You need to go read up more on CPF SA and CPF Life. Over the years CPF rules have been changing and more of my money are getting struck there in the whatever schemes they have and CPF think I am a dummy investor and they have better brain to manage my money.


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