CPF Accounts Value Thread 2022

[BBCWatcher]

When SSB is between 2.5% to 3%, I still consider it a hassle to reinvest the SSB interest for the compounding effect and the interest rates for each batch will be all over the place.

The CPF dashboard allows me to track my OA at one glance, it is super fast to refund (1 min task using CPF app) and the compounding effect happens by itself.

I think you mean that you would/could take the interest from your SSBs and deposit that amount in CPF. It's (hopefully obviously) not a hassle to buy a SSB. That's a one-time event for each SSB, and the current SSB earns a higher rate of interest than CPF OA. The SSB is also more liquid since you can redeem a SSB any month you like and use the proceeds for any purpose.

If the SSB is above 3%, it will be a clearly superior place to place your extra cash.

SSBs are clearly superior at or above 2.5% (the OA rate). You can take the SSB interest and do whatever you like with it, including top ups/Voluntary Contributions/refunds to CPF. [Note: OA doesn't quite earn 2.5%. The CPF Board computes interest on a lowest balance/whole month basis, so in practice you end up earning slightly under 2.5% p.a.]

T-Bills are also currently clearly superior to OA assuming you can tolerate a 6 month hold, at least on a T-Bill ladder basis. Which (one would think) is a very reasonable assumption in comparison to OA, which is heavily liquidity constrained.

Alternatively, the bank dividends are also looking good with higher interest rates and the potential upswing in share prices.

Individual bank stocks are really not that comparable to government guaranteed bonds.

 

[sohguanh]

When SSB is between 2.5% to 3%, I still consider it a hassle to reinvest the SSB interest for the compounding effect and the interest rates for each batch will be all over the place.

The CPF dashboard allows me to track my OA at one glance, it is super fast to refund (1 min task using CPF app) and the compounding effect happens by itself.

If the SSB is above 3%, it will be a clearly superior place to place your extra cash. Alternatively, the bank dividends are also looking good with higher interest rates and the potential upswing in share prices.

Not saying your reasoning is wrong but it is not strong enough for me to take the housing refund option. But for me if take up the housing refund option is just like stock investors it can be psychological reason. That is, you login you see you "owe" X dollars to yourself for taking those monies to pay the HDB flat. The X figure is so high you are shocked. By paying it off a bit suddenly you find X dollars is reduced to Y and the refund monies earn OA 2.5% so you feel a "sense of achievement". This typically applies for ppl who don't like debts (be it good debt also) and I belong to this camp. Unless situation forbid, I always try to clear my debts. But this "debt" is paying to myself so can slowly do no hurry.

Yes despite many ppl say we should be rational/logical/objective in investing, it is hard to remove this emotional and or psychological reason. E.g average down on a downward spiral stock etc. keep topping up the margin to retain stock etc

 

[limster]

That is, at current situation I don't find any good advantages to go the voluntary housing refund to OA option. As for topping up SA option sorry no go as max. If there are readers who feel the housing refund to OA option as superior to SSB at this moment willing to hear your opinions.

People need to refund OA in order to have the max CPF balance once the official "CPF Accounts Value Thread 2023" is up. 4 more months left to go!

 

[andyhtc]

Not saying your reasoning is wrong but it is not strong enough for me to take the housing refund option. But for me if take up the housing refund option is just like stock investors it can be psychological reason. That is, you login you see you "owe" X dollars to yourself for taking those monies to pay the HDB flat. The X figure is so high you are shocked. By paying it off a bit suddenly you find X dollars is reduced to Y and the refund monies earn OA 2.5% so you feel a "sense of achievement". This typically applies for ppl who don't like debts (be it good debt also) and I belong to this camp. Unless situation forbid, I always try to clear my debts. But this "debt" is paying to myself so can slowly do no hurry.

Yes despite many ppl say we should be rational/logical/objective in investing, it is hard to remove this emotional and or psychological reason. E.g average down on a downward spiral stock etc. keep topping up the margin to retain stock etc

Perhaps mainly because the absolute interest difference is not a lot since the refund is not a lot...

The difference is just 0.x% on a small sum. I focus more on my other sources of income.

 

[duhduhduh]

Noted that using CPF IA will have a $2 quarterly fee though.... so gotta ensure you returns needs to take into consideration this fee

 

[sohguanh]

Noted that using CPF IA will have a $2 quarterly fee though.... so gotta ensure you returns needs to take into consideration this fee

Housing refund is use cash put inside your own OA so next time sell house you get more cash as no need pay the monies borrowed earlier to pay HDB.

CPF IA is you take your OA to invest outside a bit different. That is why I have been saying if take OA or SA monies outside invest must be aggressive else less risky very little returns may as well put inside CPF. Now market bad I don't invest but market good the equities fund easily beat 2.5 or even 4%

 

[hwarzoner]

One more month cpf interest is credited soon, time really flies.

 

[andyhtc]

Time flies. Most of my OA is in an October 2022 T-Bill. This year I am expecting around $22k interest for my CPF accounts.