CPF SA Shielding hack - RIP (Obsolete)

[idwish]

Understand now....thanks
THis is for those who are not withdrawing at 55.

 

[reddevil0728]

You want a fixed deposit of 4% SA which you can withdraw anytime While earning 4%.

Or you want OA of 2.5% which you can withdraw anytime.

Of course if you want to withdraw immediately, why bother doing shielding.

Why fixed deposit?

more like normal account no?

 

[a4973]

You are right. It is for those who wish to retain as much SA as possible to earn 4% and slowly draw down SA when needed, not one shot withdraw everything.

Important to meet FRS or BRS with property pledge first.

Hopefully your OA will grow by the time you are 55 so that more OA and less SA will be used to form RA.

If you prefer to have more liquidity and have more in SA compared to higher payout from CPF life after 65, can consider pledging your property then RA can be formed with BRS.

I believe one cannot choose to form RA with BRS but rather form RA up to FRS then pledge property to drawdown to BRS but this drawdown will be in cash and not able to be redeposited back to SA.

 

[BBCWatcher]

Yes, you can also "shield" all but $20,000 of OA if you wish. One reason you might do this is so that you open up more room to top up your new Retirement Account, up as high as the Enhanced Retirement Sum (ERS) if you wish. So then you end up with a fatter RA, lots of SA dollars, and lots of OA dollars. And in a future environment when it's hard to find a fixed deposit paying even 1% p.a. interest that big RA+big SA+big OA (+big MA) arrangement can be very, very nice.

For example.

 

[henrylbh]

Don’t think allowed to apply more than what’s available and the entire application might just render invalid

tbh if it’s for purpose of shielding, some may forgot “known” loss of interest vs using bond fund method where can kena capital loss

The Agent Bank doesn't check the applicant's Available Balance. It's up to you ask them or CPFB for the Available Balance. Even if insufficient fund, you can be sure that the Agent Bank won't reject the application I have experienced such situations when dealing in CPF shares in 3 instances ... (a) buying shares above my 35% stock limit (b) selling more shares than I own in CPFIA, and (c) cancelling outright the purchase of CPF shares. I only paid $5 for cancellation of shares I bought. All my three actions were deliberately executed with knowledge of the rules

 

[reddevil0728]

The Agent Bank doesn't check whether the applicant's Available Balance. It's up to you ask them or CPFB for the Available Balance. Even if insufficient fund, you can be sure that the Agent Bank won't reject the application I have experienced such situations when buying CPF shares in 3 instances ... (a) buying shares above my 35% stock limit (b) selling more shares than I own (c) cancelling outright the purchase of CPF shares. I only paid $5 for cancellation of shares I bought. All my three actions were deliberately executed with knowledge of the rules

what happens if insufficient funds to cover what's executed? so it just goes unfilled entirely? or they still fill partial

 

[henrylbh]

what happens if insufficient funds to cover what's executed? so it just goes unfilled entirely? or they still fill partial

Suggest you call and ask your Agent Bank for answers and then we compare answers ok?

 

[reddevil0728]

Suggest you call and ask your Agent Bank for answers and then we compare answers ok?

nono. just curious. like i wonder what will happen.

not doubting what you say

 

[henrylbh]

nono. just curious. like i wonder what will happen.

not doubting what you say

Each Agent Bank may have their own rules. Straight answer would be to tell you to ensure you have Available Bank before applying or the successful application will be rejected and you pay penalty Press them for more answers and they will put you on hold and they check further.

 

[reddevil0728]

Don't know why some people like to test the system. Just follow the rules lah.

Tbills using CPF quite a new thing. My experience is ask them everything don't know. DBS say check with CPF. CPF say check with DBS. Even if CSO say something I don't know whether can believe or not.

actually isn't that why need to test the system? cause nobody knows for sure

 

[vsvs24]

actually isn't that why need to test the system? cause nobody knows for sure

Ok to test but not beyond the limits.

 

[henrylbh]

Ok to test but not beyond the limits.

I used to like to test the limits including speeding But not in Sg. Long ago, I was going about 150/160kph on a Malaysian Hwy. On my rear mirror, I saw an alfa speeding behind me. So I picked up speed as the alfa was closing in. I floored the accelerator to 170kph and the alfa zoomed passed me effortlessly and soon disappeared from sight. No matter what I did with the pedal and the car, it couldn't go above 170 as the honda car manual say so So I said to myself that my next car must go up to 200kph. In 1992 I stumbled upon a batch of new citroen meant for Australia but go stuck in Sg and sold at special price. It had a speed limit of 215kph. I grabbed it. Now my turn. From Melaka, I passed a bmw 520 at 180 and he not happy. Seeing my relatively unknown car he tried overtaking me above 180kph. I let him passed but he was not going any faster as he seem satisfied to be in front of me. So I overtook him again and not happy he tried overtaking me at 190. Then I went to above 190 and stayed in front of him. A few times he tried to go above 190kph and we took turns overtaking each other. Then I had enough and went above 200 up and at times to limit of 215. He tried chasing but could not catch up and then he decided to follow me at the distance I allowed till we reached the toll exit point in JB. From Ayer Keroh we were enjoying the speed all the way to exit toll point. It was a memorable journey speeding all the way as we accompanied each other. At the exit toll, he kept looking and wondering what kind of car I was driving that he could not overtake. We completed 180km journey in less than 1.5 hours.

 

[BernardWYF]

1. You can just apply for the t-bill that gets issued before your birthday and matures after your birthday. and there are many options
2. technically it is safer to put a comp bid of as low as 0.01% because that means you get (almost) 100% chance of 100% allocation vs non comp where it is subject to quota.
3. see above

https://financialhorse.com/how-to-buy-singapore-treasury-bill-t-bill-using-cpf-srs-cash/
sorry, may I know if its the other way round? non-competitive bid will allocated first up to 40% of the total issuance

 

[BernardWYF]

But what happens if not enough? Will it render the entire application invalid?

You put in 135k SA in non-comp when eligible amount is 90k? Have you find out what would happen if you get full allocation and and the cut-off amount is more than 90k and how much can you stomach if the COY is lower than SA rate?

sorry, my bad, what I meant is I am trying to shield 90k in SA with FRS amount intact from OA and SA. Even if bid 135k and full allocation, SA still have $$$ to buy the T-bills. The remaining amount left at 55yo will then be less than FRS, which is also ok since RA and SA are having 4% interest

 

[reddevil0728]

https://financialhorse.com/how-to-buy-singapore-treasury-bill-t-bill-using-cpf-srs-cash/
sorry, may I know if its the other way round? non-competitive bid will allocated first up to 40% of the total issuance

but if oversub for NC, all who apply NC will be pro-rated.

whereas if you apply comp bid and bid super lower. the chances of COY being what you bid for is very unlikely hence you will almost definitely get 100% allocation

 

[Value.Matrix]

Why fixed deposit?

more like normal account no?

Aiya. Must write until got a catch. People nowadays do not believe anything at all, so write until so accurate also no use.

But thanks for correcting it.

 

[BernardWYF]

but if oversub for NC, all who apply NC will be pro-rated.

whereas if you apply comp bid and bid super lower. the chances of COY being what you bid for is very unlikely hence you will almost definitely get 100% allocation

oh, so by bidding 0.1% to get full allocation, the final benefit is enjoy the COY interest that is established and park the SA shielding amount safely ... now I understand, thanks.

base on the last COY 3.9%, this shielding method will lose 0.1% for 6 months and 4% for 2 months ... correct?

 

[reddevil0728]

oh, so by bidding 0.1% to get full allocation, the final benefit is enjoy the COY interest that is established and park the SA shielding amount safely ... now I understand, thanks.

base on the last COY 3.9%, this shielding method will lose 0.1% for 6 months and 4% for 2 months ... correct?

huh why so complicated.

u just need to know that your breakeven COY for those issues that loses 7 months of CPF interest is

CPF Interest * 7 / 6

 

[BernardWYF]

Enhanced method of shielding .... maybe better than T-bills shielding?

 

[reddevil0728]

Enhanced method of shielding .... maybe better than T-bills shielding?

can summarise?