CPF first $60k additonal 1%

[peacefulday]

Additional Interest of 1%

As part of the Government’s efforts to enhance CPF members’ retirement savings, an additional 1% interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member’s SA or RA to enhance his retirement savings. If the member is above 55 years old and participates in the LIFE scheme, the additional 1% interest will still be earned on his combined balances including the savings used for CPF LIFE.

can someone explain on the highlight in red?

let say,
scenario 1) my OA is $20k and SA is $100k, as stated above my OA $20k + SA $40k (total first $60k) will get extra 1% interest, the remainder SA $60k will receive 4% rate?

scenario 2) if I transferred all my OA into SA become SA $120k, will the additional 1% rate given still apply since my OA become nil?

Thanks in advance

 

[lzydata]

let say,
scenario 1) my OA is $20k and SA is $100k, as stated above my OA $20k + SA $40k (total first $60k) will get extra 1% interest, the remainder SA $60k will receive 4% rate?

scenario 2) if I transferred all my OA into SA become SA $120k, will the additional 1% rate given still apply since my OA become nil?

Thanks in advance

Scenario 1: Yes correct.

Scenario 2: Yes, in this case the first $60k in your SA will get the extra 1% interest.

However, suppose there is $100k in OA and $20k in SA. Then only $40k ($20k from OA and $20k from SA) will get the extra interest, because at most $20k in the OA will get the extra interest. Hope this helps.

 

[peacefulday]

Thanks Izydata and sinpeople for the prompt replies. Great info!

That's why I choose here to enquire my doubt then email cpf board and waiting for days for them to reply me...haha.

Think I shall proceed scenario 2 as I got not much commitment on my housing anymore Thanks again guys.

 

[iCuteCube]

It is OK to move your money from OA to SA, if you don't have plan to change your housing in the future.

Some people do that, no right or wrong.

Depending on your strategy on how to maximize it.

For most people i know, they don't do so. They will use OA money to invest instead.

But once again, you need to determine if that is really the best choice for your situation. Don't get blinded by the interests rate

 

[peacefulday]

Some people do that, no right or wrong.

Depending on your strategy on how to maximize it.

For most people i know, they don't do so. They will use OA money to invest instead.

But once again, you need to determine if that is really the best choice for your situation. Don't get blinded by the interests rate

Thanks for the advice.

At most of the time, i use cash for my investment in SG and US market.

Only a very small portion using CPF and I noted my cpf dividend always not as good as 5%. My CPF strategy is to make use of 4 and 5% rate return to achieve and exceed the CPF minimum sum and get back excess eligible cash return in future after MS.

If you do a 5% compound interest calculation for next 10/15/20 years when one reach 55, that's a hugh amount

Again, you are right and everyone have their own strategy to acheive their goal. Don't follow blindly