CPF interest question

[livingston]

Hi, have some question need experience people to answer.

For CPF under 60K, it will have additional 1% of the total amount right?

the senario as below, say the CPF total amount have 100k,
if i use my CPF OA say 50k, then the CPF total left 50k and less than 60k.
so i can entitle another 1% additional interest?

am i correct to assume like that?

 

[daranic]

If all 50k is in OA, then the answer is no because only up to 20k in OA can earn the extra interest.

The sequence for the account balances used to make up the combined balances is as below. You can ignore RA if you are below age 55.

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

 

[BBCWatcher]

Said another way, you're earning maximum available bonus interest if:

RA+SA+MA+OA >= $60,000
*AND*
RA+SA+MA >= $40,000.

 

[livingston]

i thought below 60k will earn more interest?

my question is, if i use up all the excess fund from OA, (eg buy house, buy stock, buy gold, education fund and etc) can use this method to reduce overall to less than 60k?
say left over is 10k OA, 20K SA, 20K MA.
is it the interest obtain is higher?

 

[reddevil0728]

i thought below 60k will earn more interest?

my question is, if i use up all the excess fund from OA, (eg buy house, buy stock, buy gold, education fund and etc) can use this method to reduce overall to less than 60k?
say left over is 10k OA, 20K SA, 20K MA.
is it the interest obtain is higher?

See second post?

 

[BBCWatcher]

i thought below 60k will earn more interest?

Every CPF dollar earns some CPF interest when held in CPF RA, SA, MA, and/or OA for at least one full calendar month. The more dollars you have in CPF, the more CPF interest you earn. Reducing your CPF balances always decreases the CPF interest you earn.

So what are you trying to accomplish?

 

[livingston]

Every CPF dollar earns some CPF interest when held in CPF RA, SA, MA, and/or OA for at least one full calendar month. The more dollars you have in CPF, the more CPF interest you earn. Reducing your CPF balances always decreases the CPF interest you earn.

So what are you trying to accomplish?

assuming a couple buying property using cpf OA
so both have the CPF OA
if the used out all the wife OA and make her balance less than 60k by combining SA and MA
(if the husband fully used up OA, the husband SA and MA combine is more than 60k)

just want to survey how the allocate fund can achieve higher interest rate.

 

[Dividends]

i thought below 60k will earn more interest?

my question is, if i use up all the excess fund from OA, (eg buy house, buy stock, buy gold, education fund and etc) can use this method to reduce overall to less than 60k?
say left over is 10k OA, 20K SA, 20K MA.
is it the interest obtain is higher?

You just need to know that there's a cap of $20k on the OA portion of the bonus interest.

If OA has $60k and SA and MA has a combined sum of $60k, the first $20k of your OA will get the extra 1%, and $40k from your SA followed by MA will earn 1% extra too.

If OA is empty, and SA and MA has a combined sum of $60k, you'll earn the extra 1% interest on that $60k.

In the case of the example you cited, the remaining OA $10k, SA $20k, and MA $20k will all earn the extra 1% bonus interest.

 

[Okenba]

assuming a couple buying property using cpf OA
so both have the CPF OA
if the used out all the wife OA and make her balance less than 60k by combining SA and MA
(if the husband fully used up OA, the husband SA and MA combine is more than 60k)

just want to survey how the allocate fund can achieve higher interest rate.

CPF is not going to reward you for keeping less money in CPF.
The extra 1% is meant to encourage people to try to keep at least 60k in CPF so that they can earn that extra 1%.

If people can get higher interest by keeping CPF low, they will try to do that and it doesn't make sense for CPF to encourage such behaviour.

 

[livingston]

CPF is not going to reward you for keeping less money in CPF.
The extra 1% is meant to encourage people to try to keep at least 60k in CPF so that they can earn that extra 1%.

If people can get higher interest by keeping CPF low, they will try to do that and it doesn't make sense for CPF to encourage such behaviour.

I thought cpf reward extra 1% for less than 60k, this is to help the cpf owner who have lower cpf and make them grow faster...
Just for the case that I mention, the original cpf fund is more than 60k, but I try to bring down to lower 60k to earn extra 1%

Not sure worth trying or not

 

[reddevil0728]

I thought cpf reward extra 1% for less than 60k, this is to help the cpf owner who have lower cpf and make them grow faster...
Just for the case that I mention, the original cpf fund is more than 60k, but I try to bring down to lower 60k to earn extra 1%

Not sure worth trying or not

Why do you need to bring it down to earn extra 1%???

Even if you have maxed out your cpf, your first 60k still get the 1%

 

[Prof. Utonium]

I thought cpf reward extra 1% for less than 60k, this is to help the cpf owner who have lower cpf and make them grow faster...
Just for the case that I mention, the original cpf fund is more than 60k, but I try to bring down to lower 60k to earn extra 1%

Not sure worth trying or not

First $60k (OA capped at $20K).

No need bring down anything. Have more still have, have less still have the extra 1%.

OA: $20K
SA: $20K
MA: $20K

$60K*1%

OA: $30K ($20K cap)
SA: $10K
MA: $15K

$45K*1%

OA: $0
SA: $60K
MA: $15K

$60K*1%

 

[ikilledbarbie]

I thought cpf reward extra 1% for less than 60k, this is to help the cpf owner who have lower cpf and make them grow faster...
Just for the case that I mention, the original cpf fund is more than 60k, but I try to bring down to lower 60k to earn extra 1%

Not sure worth trying or not

All the replies below already answered your question....