CPF Easy Info Thread. :)

[item2sell]

Bro, can share more info ?

1. From the time you sign the documents at OCBC, how long did it take for the transfer to be effected at OCBC CPFIS ?

2. How is the $81 charge arrived at ? Is it based on number of securities or value ?

3. Kaypo a bit. What made you want to change ?

2-3 weeks to take effect.

$81 is due to quantity of shares

OCBC seems better for tbills. Base on happy experience. Intend to tbill ladder with cpf oa

 

[vsvs24]

2-3 weeks to take effect.

$81 is due to quantity of shares

OCBC seems better for tbills. Base on happy experience. Intend to tbill ladder with cpf oa

So only need to go to OCBC and they take care of everything ? You no need to inform DBS directly ?

$81 is charged by DBS. Did OCBC charge anything ?

https://www.ocbc.com/assets/pdf/investment/cpfia_schedule_of_charges_201112.pdf
I see a interbank transfer which I wonder whether applicable. No. 6 on the list

 

[Happyhappydays]

@Happyhappydays previously confirmed application with OCBC, only the discounted face value got deducted and it was deducted on 8 Aug ahead of issue date of 10 aug for BS22115F.

@Happyhappydays did you try apply a second time?

Yup
I was charged S$2.68, but which the relationship manager didn’t inform when I applied (think the RM isnt aware also, as she wasn’t so familiar with the process) Not aware of any other charges, but maybe there will be when the tbill matures, will have to see.

Wow I missed the 3.32% auction. May use cpf OA to apply again. But hv to spend time to visit bank branch in person…

(I also hope cpf improves their system so that it allows cpf funds to earn interest once it’s back into OA ie start earning interest by the next day.

Now, when any investment eg tbill matures and Cpf funds go back to OA, the monies only earn start earning interest in the following month. In a way, we are “losing” out on one month of interest… unless we can find a product that matures towards the end of the month.)

 

[sohguanh]

Now, when any investment eg tbill matures and Cpf funds go back to OA, the monies only earn start earning interest in the following month. In a way, we are “losing” out on one month of interest… unless we can find a product that matures towards the end of the month.)

That is why for me using CPF for fund investment I never redeem to let it go back. I always switch sell and buy into another fund to keep earning more in a bull market

For T-bill due to the short tenure that is indeed the price to pay but since readers already work out if T-bill cutoff yield is a lot more than 2.5% it is worthwhile factoring in this month of lost interest

 

[BBCWatcher]

Let's do the math for a 6 month T-bill yielding 3.32%...

Scenario 1: Leave Dollars in OA

$983.45 * 2.5% * 6/12 = $12.29 interest

Scenario 2: Buy the 3.32% 6 Month T-Bill

Interest = $16.55
Lost Interest (A) = $1,000 * 2.5% * 1/12 (September, 2022) = $2.08
Lost Interest (B) = $983.45 * 2.5% * 1/12 (March, 2023) = $2.05
Net Interest = $16.55 - $2.08 - $2.05 = $12.42

Difference (in favor of Scenario 2): $0.13

....But there are some footnotes. The bank (DBS/POSB, OCBC, or UOB) charges fees for the CPF Investment Account. So this math doesn't work at small dollar values of T-bills such as this ~$1,000 example because the fees will swamp the 13 cents of additional interest. Also, I've implicitly assumed that there are no other inflows into OA. However, if there are well-timed inflows then you might not lose as much CPF OA interest. Also, if you're able to roll T-bills over to the next auction, within the same calendar month, then that'll effectively reduce the interest loss. And finally a 12 month T-bill or other longer tenor SGS can work better.

 

[CaptainWu]

(I also hope cpf improves their system so that it allows cpf funds to earn interest once it’s back into OA ie start earning interest by the next day.

I believe CPF intended to do this as they probably not encourging/expecting people to move in/out funds often in particular the older days. As CPF investment is now much more popular after all the KOLs in the media shares different tips hence this is now becoming an issue brothering investors.

 

[reddevil0728]

I believe CPF intended to do this as they probably not encourging/expecting people to move in/out funds often in particular the older days. As CPF investment is now much more popular after all the KOLs in the media shares different tips hence this is now becoming an issue brothering investors.

What’s KOLs?

 

[CaptainWu]

What’s KOLs?

I mean the Key Opinion Leaders as we have lots of youtubers now talking about CPF tips.

 

[reddevil0728]

I mean the Key Opinion Leaders as we have lots of youtubers now talking about CPF tips.

They are KOLs meh

 

[NTTDoCoMo]

I mean the Key Opinion Leaders as we have lots of youtubers now talking about CPF tips.

They need to educate people that CPF compute interest on the lowest balance of the month.

 

[a4973]

They need to educate people that CPF compute interest on the lowest balance of the month.

What if there is an outflow followed by an inflow on the same date? Would it straight away take the amount post outflow? Or the end of day amount which will include the inflow? In this scenario inflow > outflow.

I'm guessing that if there is an inflow followed by outflow and inflow > outflow, that's pretty straight forward. Thanks.

 

[NTTDoCoMo]

What if there is an outflow followed by an inflow on the same date? Would it straight away take the amount post outflow? Or the end of day amount which will include the inflow? In this scenario inflow > outflow.

I'm guessing that if there is an inflow followed by outflow and inflow > outflow, that's pretty straight forward. Thanks.

CPF balances used for interest computation are affected by the transactions in your account. For instance, contributions (including refunds) received this month start earning interest next month. Withdrawals/deductions in this month will not earn interest from this month onwards.

https://www.cpf.gov.sg/member/faq/g...terest-computed-and-credited-into-my-accounts

 

[reddevil0728]

What if there is an outflow followed by an inflow on the same date? Would it straight away take the amount post outflow? Or the end of day amount which will include the inflow? In this scenario inflow > outflow.

I'm guessing that if there is an inflow followed by outflow and inflow > outflow, that's pretty straight forward. Thanks.

Just take it that any outflow or inflow will not earn any interest on that amount.

if there is already an outflow, the “new low” for the month has been set, regardless of whether there is inflow.

if there is inflow followed by outflow and assuming the outflow is less than the inflow the balance prior to the inflow is the lowest of the month.

 

[a4973]

Just take it that any outflow or inflow will not earn any interest on that amount.

if there is already an outflow, the “new low” for the month has been set, regardless of whether there is inflow.

if there is inflow followed by outflow and assuming the outflow is less than the inflow the balance prior to the inflow is the lowest of the month.

Very clear explanation. Thanks

 

[iMac]

Any news CPF interest rate increase soon?

 

[reddevil0728]

Any news CPF interest rate increase soon?

we will only know when it is announced.

in the meantime

https://www.straitstimes.com/singapore/politics/no-changes-to-cpf-interest-rates-tan-see-leng

 

[dork32]

Let's do the math for a 6 month T-bill yielding 3.32%...

Scenario 1: Leave Dollars in OA

$983.45 * 2.5% * 6/12 = $12.29 interest

Scenario 2: Buy the 3.32% 6 Month T-Bill

Interest = $16.55
Lost Interest (A) = $1,000 * 2.5% * 1/12 (September, 2022) = $2.08
Lost Interest (B) = $983.45 * 2.5% * 1/12 (March, 2023) = $2.05
Net Interest = $16.55 - $2.08 - $2.05 = $12.42

Difference (in favor of Scenario 2): $0.13

....But there are some footnotes. The bank (DBS/POSB, OCBC, or UOB) charges fees for the CPF Investment Account. So this math doesn't work at small dollar values of T-bills such as this ~$1,000 example because the fees will swamp the 13 cents of additional interest. Also, I've implicitly assumed that there are no other inflows into OA. However, if there are well-timed inflows then you might not lose as much CPF OA interest. Also, if you're able to roll T-bills over to the next auction, within the same calendar month, then that'll effectively reduce the interest loss. And finally a 12 month T-bill or other longer tenor SGS can work better.

good. put up numbers for people to see and compare.

but i think got some problem in your calculation. you double counted. this is why the returns seems so low.

it is good that you set a basis period. for this case it would be from sep 22 to mar 23

as in your senario 1
it would be 1000 *2.5% * 1/12 = xxx (1000 would be withdrawn when you bid in sep)
983.45 * 2.5% *6/12= yyy (offsetting the refund and for the months of oct 22 to mar 23)

scenario 2 is just $16.55

 

[henrylbh]

Let's do the math for a 6 month T-bill yielding 3.32%...

Scenario 1: Leave Dollars in OA

$983.45 * 2.5% * 6/12 = $12.29 interest

Scenario 2: Buy the 3.32% 6 Month T-Bill

Interest = $16.55
Lost Interest (A) = $1,000 * 2.5% * 1/12 (September, 2022) = $2.08
Lost Interest (B) = $983.45 * 2.5% * 1/12 (March, 2023) = $2.05
Net Interest = $16.55 - $2.08 - $2.05 = $12.42

Difference (in favor of Scenario 2): $0.13

....But there are some footnotes. The bank (DBS/POSB, OCBC, or UOB) charges fees for the CPF Investment Account. So this math doesn't work at small dollar values of T-bills such as this ~$1,000 example because the fees will swamp the 13 cents of additional interest. Also, I've implicitly assumed that there are no other inflows into OA. However, if there are well-timed inflows then you might not lose as much CPF OA interest. Also, if you're able to roll T-bills over to the next auction, within the same calendar month, then that'll effectively reduce the interest loss. And finally a 12 month T-bill or other longer tenor SGS can work better.

Tbill is still not investible even with $1,000x10. Need at least $1,000x50 and even then the net gain is pittance (less than $6 for the trouble and loss of opportunity to invest in other financial products if OA is still within investible limit. Hopefully cpf members do not jump in just because Tbill pays 3.32% or 32.8% more than OA or get the impression that it's dumb to leave OA idle.

 

[henrylbh]

good. put up numbers for people to see and compare.

but i think got some problem in your calculation. you double counted. this is why the returns seems so low.

it is good that you set a basis period. for this case it would be from sep 22 to mar 23

as in your senario 1
it would be 1000 *2.5% * 1/12 = xxx (1000 would be withdrawn when you bid in sep)
983.45 * 2.5% *6/12= yyy (offsetting the refund and for the months of oct 22 to mar 23)

scenario 2 is just $16.55

Not just $16.55. There is forbearance cost.

 

[henrylbh]

CPF balances used for interest computation are affected by the transactions in your account. For instance, contributions (including refunds) received this month start earning interest next month. Withdrawals/deductions in this month will not earn interest from this month onwards.

https://www.cpf.gov.sg/member/faq/g...terest-computed-and-credited-into-my-accounts

https://www.cpf.gov.sg/member/faq/g...terest-computed-and-credited-into-my-accounts
So it's not entirely correct to say that interest is computed based on the lowest balance in the month