Accrued interest in CPF

[Okenba]

can you pls share more on how does this really works?
lets say if combined total is over 60k.
but SA and MA is very little. OA alone over 60k liao.
how does the interest works? first 20k of OA, and all of SA and MA will earn extra 1% now?
example 10k SA 10k MA .
so if top up MA or transfer OA to SA. (e.g 20K OA , 40K SA , 10k MA) will earn extra 1%? rest of the balanced OA earn the usual 2.5%?

and assuming if no need to pay income tax due to kids, topping up of SA better(xfer from OA) ? compared to MA( using cash )?

https://www.cpf.gov.sg/members/FAQ/...=&group=Others&ajfaqid=2192040&folderid=13726

Q) How much extra interest can I earn on my CPF balances?
A) To enhance the retirement savings of Singaporeans, the Government pays extra interest on the first $60,000 of your combined balances (capped at $20,000 for Ordinary Account (OA)). The amount of extra interest paid to you would depend on your CPF balances and age.

The sequence for the account balances used to make up the combined balances is as follows:

1st: Retirement Account (RA), including any CPF LIFE premium balance
2nd : OA, with a cap of $20,000
3rd : Special Account (SA)
4th: MediSave Account (MA)

Hmm. Looks like OA will always get the extra 1% up to 20k.
Didn't know that. Shrug.

 

[hwmook]

extra 1% is up to 60k.
if SA is less than 60k, the extra 1% will overflow to OA.
Up to maximum of 20k in OA can enjoy the additional 1%.

Edit: Based on CPF FAQ quoted below, First 20k in OA will always get the extra 1%.
After which SA, then MA will be considered.

The 1% will always go into SA no matter OA/SA/MA is used to make up the 60k.

 

[Okenba]

The 1% will always go into SA no matter OA/SA/MA is used to make up the 60k.

Ah yes. So there is a distinction between where the 1% comes from and where it goes to.

IE. OA: 30k, SA+MA: 30k
You get extra 1% for 50k. Extra $500 goes into SA.

 

[dork32]

Ah yes. So there is a distinction between where the 1% comes from and where it goes to.

IE. OA: 30k, SA+MA: 30k
You get extra 1% for 50k. Extra $500 goes into SA.

back to the main story. oa will grow at 2.5%

 

[IcYFl4mEz]

Hmm. Looks like OA will always get the extra 1% up to 20k.
Didn't know that. Shrug.

The 1% will always go into SA no matter OA/SA/MA is used to make up the 60k.

Ah yes. So there is a distinction between where the 1% comes from and where it goes to.

IE. OA: 30k, SA+MA: 30k
You get extra 1% for 50k. Extra $500 goes into SA.

So for example , if OA 100k , SA+MA 30k.
same theory applies in this scenario? or total only 20k of OA get extra 1% ( as OA already max over 60k , based on the sequence ).

 

[YouHeypiCanLiao]

Go SA good wut

Ah yes. So there is a distinction between where the 1% comes from and where it goes to.

IE. OA: 30k, SA+MA: 30k
You get extra 1% for 50k. Extra $500 goes into SA.

Posted with Nokia 8310 HardwareZone Forums app

 

[BBCWatcher]

So for example , if OA 100k , SA+MA 30k.
same theory applies in this scenario? or total only 20k of OA get extra 1% ( as OA already max over 60k , based on the sequence ).

OK, to restate your example:

SA+MA = $30K
RA = $0
OA = $100K

This person would receive bonus interest on only $50K. That's because only up to $20K of OA is counted toward bonus interest. If this individual were to transfer $10K of OA into SA, then maximum bonus interest would be paid: $40K from SA+MA, $20K from OA.

To obtain maximum bonus interest all you need is this recipe:

SA+MA+RA+OA is $60K or more
*AND*
SA+MA+RA is $40K or more

If you're under age 55 then you have no Retirement Account, so your RA is zero.

 

[IcYFl4mEz]

OK, to restate your example:

SA+MA = $30K
RA = $0
OA = $100K

This person would receive bonus interest on only $50K. That's because only up to $20K of OA is counted toward bonus interest. If this individual were to transfer $10K of OA into SA, then maximum bonus interest would be paid: $40K from SA+MA, $20K from OA.

To obtain maximum bonus interest all you need is this recipe:

SA+MA+RA+OA is $60K or more
*AND*
SA+MA+RA is $40K or more

If you're under age 55 then you have no Retirement Account, so your RA is zero.

recently ST show news that more people top up CPF, and shown a picture of most people pump into medisave instead.
whats the pros vs con of pumping into medisave vs SA? Altho maybe Medisave can be "use" to pay medical/health premium. is that the most logical reason?

 

[Thoreldan]

recently ST show news that more people top up CPF, and shown a picture of most people pump into medisave instead.
whats the pros vs con of pumping into medisave vs SA? Altho maybe Medisave can be "use" to pay medical/health premium. is that the most logical reason?

why not into both?

 

[henrylbh]

OK, to restate your example:

SA+MA = $30K
RA = $0
OA = $100K

This person would receive bonus interest on only $50K. That's because only up to $20K of OA is counted toward bonus interest. If this individual were to transfer $10K of OA into SA, then maximum bonus interest would be paid: $40K from SA+MA, $20K from OA.

But if this person has RA (though $0), can he still transfer OA to SA?

Some could have exhausted RA and still kicking around with OA/SA/MA

 

[firsttimebuyer]

There are two cases where it may make sense to pay back your accrued interest and the amount that you have withdrawn for your property.

1. You intend to upgrade your property with the spare cash, so whatever you put in now will then go towards paying for the new property.

2. You don't need the money until age 55, so you just want some place to park the money paying you 2.5% interest until that age. For this however, there are better options out there. First, if your CPF MA is not yet at the BHS, you should top up your MA first which will provide you with tax relief. Secondly, if your CPF SA is not yet at FRS and you haven't already made your annual CPF SA topup of $7000 that qualifies for tax relief, then you should do that first. Third, if you are self-employed, you have the option of making voluntary contribution to CPF that qualifies for tax relief. If you can no longer do the 3 above, then paying back your accrued interest becomes a viable option, optionally transferring from OA to SA after that.

Actually I do want to ask, if I sell a HDB property with the very clear intention of buying over 50% of another HDB property, I can use the sales proceeds to buy that share right?

But whatever is left over, I do have to return to CPF with the accrued interest as well?

 

[havetheveryfun]

Actually I do want to ask, if I sell a HDB property with the very clear intention of buying over 50% of another HDB property, I can use the sales proceeds to buy that share right?

But whatever is left over, I do have to return to CPF with the accrued interest as well?

after u sell u have to return whatever u owe to cpf + accrued interest.. any extra then u can keep as cash. from there only then u can use the money in the cpf to buy another property again.

this is to discourage people from flipping hdb properties

 

[fatboy9174]

Hi, If I intend to top up some cash into my cpf acct this year so that I can enjoy tax rebate next year, is it the same as paying back some of the accrued interest?

 

[dork32]

Hi, If I intend to top up some cash into my cpf acct this year so that I can enjoy tax rebate next year, is it the same as paying back some of the accrued interest?

pay back accrued interest into oa, no tax rebate

rstu to sa, got tax rebate.

 

[Laneige]

Now looking at accrued too
Checking relative CPF Hitting abt 30k accrued
Should They pay back the whole sum back to CPF?
Else not earning interest

What should I be looking or concern for them with if they want to pour back the money they loaned ?

 

[Laneige]

after u sell u have to return whatever u owe to cpf + accrued interest.. any extra then u can keep as cash. from there only then u can use the money in the cpf to buy another property again.

this is to discourage people from flipping hdb properties

And must make sure one of the CPF account has a x sum of money inside
Esp if hit 55 yrs old, don’t end up sell and money all stuck in CPF
Really must check with hdb

 

[Laneige]

Something like oneself own ownself hahaha

It’s different because if ts has the cash then paying it make sense if ts want to buy another property few yrs down the road n want to have more money

Instead of deducting against own home profit, there will be a 2.5% accumulated interest for ts should he one day decide to sell home n buy another
Then all extra is taken out Not even put back to CPF anymore

 

[havetheveryfun]

And must make sure one of the CPF account has a x sum of money inside
Esp if hit 55 yrs old, don’t end up sell and money all stuck in CPF
Really must check with hdb

if u only have 1 property and going to stay till there u die.. u can just let the accrued interest accumulate till infinite.. it doesnt really matter at all.

if u hit 55 yrs old and somehow have to sell your flat due to financial difficulties.. thats why its logical for it to go back to your cpf first, if not you would use it all to pay off your debts etc and then have nothing in cpf + no more roof over your head. whereas if it goes back to CPF first, you may think it is "stuck" but it is the last safety net for you already.. you got no more house but at least you still got some income from cpf which maybe u can try to rent a room or rental flat..

 

[Laneige]

if u only have 1 property and going to stay till there u die.. u can just let the accrued interest accumulate till infinite.. it doesnt really matter at all.

if u hit 55 yrs old and somehow have to sell your flat due to financial difficulties.. thats why its logical for it to go back to your cpf first, if not you would use it all to pay off your debts etc and then have nothing in cpf + no more roof over your head. whereas if it goes back to CPF first, you may think it is "stuck" but it is the last safety net for you already.. you got no more house but at least you still got some income from cpf which maybe u can try to rent a room or rental flat..

Not true leh
By 55 see can get how much then get the extra out
Depending on ts income
If low then no point
If high chance can see $ out then shldnt it b better to clear?
Don’t forget this accrued interest will roll n roll n roll n it’s not generating frm CPF but own $

 

[lifeafter41]

pay back accrued interest into oa, no tax rebate

rstu to sa, got tax rebate.

I believe, pay back accrued interest into OA, after 55, can withdraw, though no tax rebate.

Rstu to SA, got tax rebate, after 55, cannot withdraw.