CPF interest for 2016

[henrylbh]

What you mean by beyong ceiling ? Eg. The SA ceiling is 80k, there is no way to top up more then 80k ceiling, I just tried just now, only can top up less then 7k, by using e cashier got rejected, so I used ocbc internet banking and now the status is pending...

That's new year's news? SA ceiling 80k?

 

[Darkzi0n]

Don't understand what's the issue...

cpf says the interest is 3.5% p.a. and they pay 3.5% p.a isnt it?

what's with all the nominal and apy?

why is it that cpf pays what they promise (i.e. 3.5% p.a.), but for some reason u expect it to be more than 3.5% than claim that they are saving money bcos they r not paying more than what they promised?

 

[dork32]

nominal interest for 3.5% on 1000 is 36.5, apy interest is 35.

 

[BBCWatcher]

nominal interest for 3.5% on 1000 is 36.5, apy interest is 35.

I think you meant to say that a nominal interest rate of 3.5% compounded monthly is equivalent to an APY of (about) 3.65%. (I'll assume your math is correct, at least.)

Great, fabulous, that's fun. Now, back on Planet Earth, find a Singapore bank's 12+ month fixed deposit that compounds monthly, and that allows you to contribute pre-tax dollars that are then never taxed (at least by Singapore), and that provides net yields anywhere near CPF's yields, and you might start to have a valid comparison. But there is no comparison. Traditional CPF provides superb yields.

Anyone want to complain that traditional CPF isn't providing a nominal interest rate of 8% compounded every minute? Good grief, this is silly, truly.

....And nobody is forced to contribute to (high yielding, doubly tax favored) CPF, and never above $37,740/year (including employer contributions). Don't like that CPF "tyranny" (ahem)? No problem! Go work in any other country, or don't work. Then you'll have zero compulsory CPF contributions but still, incredibly, have the option of voluntary contributions. Not tyranny!

Singapore is less than 0.0005% of the total land area of the planet. Considering only land surface-based employment, over 99.9995% of the rest of the planet has jobs that don't require CPF contributions, if that's your thing. Go for it, if that's what you want. As long as you've done your NS time, nobody in Singapore is stopping you.

 

[awful999]

That's new year's news? SA ceiling 80k?

I think not the actual SA ceiling but the yearly contribution ceiling as I can't top up the maximum 7k to SA, last year I am facing the same issue, just wonder if this case can i open a RA account to top up 7K?

Sent from LGE LG-H860 using GAGT

 

[Opps-gal]

That's new year's news? SA ceiling 80k?

Anyone top up 80K at one go?

 

[OngHuatHuat]

The math is incorrect.
Ask him to show the calculation.

3.56 %

0.035 / 365= ?

0.035 / 365 + 1 =

(1 + 0.035 / 365) ^ 365 = 1.0356

Difference in interest rate = 0.0356 - 0.035 = 0.0006

0.06 %

0.0006 x 1 million = 600 sgd

I think you meant to say that a nominal interest rate of 3.5% compounded monthly is equivalent to an APY of (about) 3.65%. (I'll assume your math is correct, at least.)

Great, fabulous, that's fun. Now, back on Planet Earth, find a Singapore bank's 12+ month fixed deposit that compounds monthly, and that allows you to contribute pre-tax dollars that are then never taxed (at least by Singapore), and that provides net yields anywhere near CPF's yields, and you might start to have a valid comparison. But there is no comparison. Traditional CPF provides superb yields.

Anyone want to complain that traditional CPF isn't providing a nominal interest rate of 8% compounded every minute? Good grief, this is silly, truly.

....And nobody is forced to contribute to (high yielding, doubly tax favored) CPF, and never above $37,740/year (including employer contributions). Don't like that CPF "tyranny" (ahem)? No problem! Go work in any other country, or don't work. Then you'll have zero compulsory CPF contributions but still, incredibly, have the option of voluntary contributions. Not tyranny!

 

[BBCWatcher]

The math is incorrect.

That 3.65% did look odd to me, but I was too polite. The correct APY figure with monthly compounding is 3.5567%. The highest APY you can get from a nominal 3.5% is 3.562% with continuous compounding.

 

[OngHuatHuat]

I did the calculation myself before and show clearly the difference between compounding daily, weekly, monthly and yearly. The difference not big. Unless you are putting 10 plus million into cpf, then yeah, it will make a huge difference. If you have that kind of money, perhaps 1 million is just 1000 dollars for you?

That 3.65% did look odd to me, but I was too polite. The correct APY figure with monthly compounding is 3.5567%. The highest APY you can get from a nominal 3.5% is 3.562% with continuous compounding.

 

[BBCWatcher]

I think not the actual SA ceiling but the yearly contribution ceiling as I can't top up the maximum 7k to SA, last year I am facing the same issue, just wonder if this case can i open a RA account to top up 7K?

You can top up your SA to whatever is left between its current balance and the Full Retirement Sum ($166,000 in 2017). You do that using the Retirement Sum Topping Up Scheme (RSTU). There is no other limit. RSTU contributions do not count against the $37,740 CPF Annual Limit. The $7,000 limit is only the annual limit of your tax exclusion, but you can go way above that.

You can also use RSTU to top up anybody's SA (anybody who is a CPF member), including a newborn's. Including those of random strangers. In some cases you can get another $7,000 (maximum) of tax exclusion if you top up somebody else's, but that's still not the top-up limit. If you want to top up mine, I have no objection.

The RA top up limit is up to the ERS.

 

[culture_counter]

In any case: "Interest crediting is in progress and will be completed by the 4th working day."

which means we might need to wait until 6 Jan (Fri). ah well...

Based on previous year's statement, the 2016 interest (oa, sa, ma) should be credited by 3jan17, but your dec2016 salary cpf would only be credited on 6jan2017.

 

[elnewbie]

That's possible. My dad topped up $50k many years ago in one shot.

Anyone top up 80K at one go?

 

[tmkedmw]

Interest for RA lai liao, can check your parent's RA.

oa, sa, ma interest not credited yet but latest will be this Friday.

 

[tmkedmw]

I did the calculation myself before and show clearly the difference between compounding daily, weekly, monthly and yearly. The difference not big. Unless you are putting 10 plus million into cpf, then yeah, it will make a huge difference. If you have that kind of money, perhaps 1 million is just 1000 dollars for you?

From CPF Board perspective, there is about $300 billion of CPF balances at end 2015.
Even a small 0.0288% reduction in effective interest rate is a savings of $86.4 million for the board.

 

[henrylbh]

Interest for RA lai liao, can check your parent's RA.

oa, sa, ma interest not credited yet but latest will be this Friday.

Ha ha. Check or see? I calculated my father's RA interest should be $3,999.15 but was credited with $3,924.15. Need another few days for them to finalise the interest for the year.

 

[OngHuatHuat]

Perhaps I should rephrase it, the percentage difference isn't too big and not much impact on individuals.

From CPF Board perspective, there is about $300 billion of CPF balances at end 2015.
Even a small 0.0288% reduction in effective interest rate is a savings of $86.4 million for the board.

 

[tmkedmw]

Ha ha. Check or see? I calculated my father's RA interest should be $3,999.15 but was credited with $3,924.15. Need another few days for them to finalise the interest for the year.

Calculate RA interest more complicated:
4% base rate,
1% extra for 1st 60k (with 20k from OA) and 1% additional extra for 1st 30k for those over 55.
Can share how u calculate?

Quote from:
https://www.cpf.gov.sg/members/aboutus/about-us-info/cpf-interest-rates

Extra Interest

An extra 1% interest per annum is currently paid on the first $60,000 of a member’s combined balances (with up to $20,000 from OA).

Extra interest received on monies in the OA will go into the member’s SA or RA to enhance his or her retirement savings. If a member is above 55 years old and participates in the CPF LIFE scheme, the extra interest will still be earned on his combined balances, which includes the savings used for CPF LIFE.


Additional Extra Interest

For CPF members who are aged 55 and above, an additional 1% interest per annum will be paid on the first $30,000 of their combined balances. This is paid over and above the current extra 1% interest that is earned on the first $60,000 of their combined balances. As a result, CPF members aged 55 and above will earn up to 6% interest per year on their retirement balances.

These additional extra interest received on the OA will go into the member’s RA to enhance his or her retirement savings. If the member has participated in the CPF LIFE scheme, the extra interest will still be earned on his or her combined balances, which includes the savings used for CPF LIFE.

 

[Mecisteus]

At equal nominal interest rates, correct.

Please do keep in mind the total cost of CPF returns also includes the loss of personal income tax revenues to the government since most contributions are pre-tax. That characteristic is unique to CPF.

I am not looking at this one.

I am looking at the cost savings from CPF balances when government is compounding interests annually instead of monthly.

 

[doody_]

Based on previous year's statement, the 2016 interest (oa, sa, ma) should be credited by 3jan17, but your dec2016 salary cpf would only be credited on 6jan2017.

That's unique to your company, CPF can be contributed up to 14 days from the end of the month. So there may be others who get their Dec CPF latest 16 Jan.

 

[henrylbh]

Based on previous year's statement, the 2016 interest (oa, sa, ma) should be credited by 3jan17, but your dec2016 salary cpf would only be credited on 6jan2017.

Each year's interest is credited at beginning of the following year. It has got nothing to do with which month's salary it is. As long as CPF contribution is made it will be taken into account for interest calculation. Example, if your employer has not paid CPF for the last one year, there will be no interest on the contributions due. But finally if he paid all the arrears years down the road, then interest will start to accrue from the time the contributions are credited into your account. In this case, you will lose interest on the due contributions during the year. However, CPF Board will recover, if successful, the loss of interest and credit your accounts with the contributions and loss of interest.