CPF SA Shielding hack - RIP (Obsolete)

[closeCPFIAopenCPFIA]

Is it you need the cash from OA urgently and can't wait 6 mths ?

That was why i ask them to quote the earlier matured t bill. But they don't have. Only BS22114E, they had. BS22111, BS22112, BS 22113 they said "no have".

 

[closeCPFIAopenCPFIA]

Is it you need the cash from OA urgently and can't wait 6 mths ?

Why reapply new CPFIA so fast ?

Was worried cpf may close this loophole then cpf oa would be stuck. I had cleared my cpf oa, left 9.8k

 

[reddevil0728]

No wonder your ID

I close my DBS CPFIA in Nov. Maybe I should open with OCBC before 14 Feb

why 14 feb?

 

[vsvs24]

why 14 feb?

Budget day.

Don't know what govt have in mind.

https://mothership.sg/2023/01/govt-will-take-care-sporeans-cpf/

 

[reddevil0728]

Budget day.

Don't know what govt have in mind.

https://mothership.sg/2023/01/govt-will-take-care-sporeans-cpf/

oh.

 

[henrylbh]

I was not shielding. I was using my cpf OA as atm. I did not want to touch my sa.
DBS charged 2.5*1.07 for the fee. I calculated the eir was about 3.09% for 2 months (60days). This method could be applied to cpf sa shielding.
After settlement, i closed my cpfia and the T bill was transferred to my cdp with 10.70 fee. Then i reapplied cpfia with ocbc .

I am more interested in the price of T-bill which give a return of 0.52% for 2 months holding before transaction cost. Make some extra on closing CPFIA and then reopening when needed

 

[a4973]

Was worried cpf may close this loophole then cpf oa would be stuck. I had cleared my cpf oa, left 9.8k

Isn't it the last 20k in OA cannot be invested?

 

[henrylbh]

Budget day.

Don't know what govt have in mind.

https://mothership.sg/2023/01/govt-will-take-care-sporeans-cpf/

Time to tax capital gain on properties which are getting out of hand. SSD doesn't work.

 

[closeCPFIAopenCPFIA]

Isn't it the last 20k in OA cannot be invested?

Gotcha. 10.2k from oa to topup spouse ra.

 

[micheritan]

I am more interested in the price of T-bill which give a return of 0.52% for 2 months holding before transaction cost. Make some extra on closing CPFIA and then reopening when needed

Great... can always close n open cpfis for OA and transfer to cdp multiple times but with different banks, as long as got cpf money with min 20K - i can always close my cpfis to transfer to cdp without touching my shielded SA - correct!?

 

[a4973]

I needed money fast so bought from dbs with cpfoa through the secondary market.
I asked dbs to quote BS22121?, dbs replied no have.
I asked dbs to quote BS22122?, dbs replied not enough qty.
I asked dbs to quote BS22123?, dbs replied no have.
I asked dbs to quote BS22124?, dbs replied had sufficient qty. And quote 99.485 per 100 after their treasury dept replied few hours later
So if you u need to shield use cpf sa.

cpf oa was my atm until it dropped below 20k.

Hi so when getting the prices from DBS, must you be physically at a branch? Or can you call the hotline? If physically at branch any particular group of branches ie only the bigger DBS branded branches instead of say neighborhood POSB branches? Thanks

 

[dork32]

It's just math. T-bill COYs aren't EIRs. (I typed up the COY↔EIR formulas in the T-bill thread.) But the relevant COY is 3.85% for these purposes (shielding). At or above 3.85% and you're doing no worse (or better) than the unit trust-based shielding method assuming the unit trust-based method involves a 1 month loss of SA interest.

If your 55th birthday falls near (or at) the beginning or end of the calendar month such that the unit trust-based SA shielding method results in a loss of 2 months of SA interest then your T-bill COY "hurdle rate" falls because there's always a 6 month T-bill spanning your 55th birthday that has a 7 month rountrip. Let's see if I can figure out that "hurdle rate"... I guess the unit trust method would yield 10/12ths of 4% (10 months in SA, 2 months out), so that's 3.33% EIR. A 3.33% EIR translates to a COY of 3.23%, so there you go.

you really dont get it do you? the difference is small and i dont have ocd. you have ocd? i give you a better number 3.84615384615385% is the break even so we should tell tbills that they should allow 20 decimal places when we bid for our tbills.

i say again, the difference is small. yes coy < eir, but lim coy =0 , coy = eir. at 4%, coy approx 0. you want to talk maths?

 

[closeCPFIAopenCPFIA]

Great... can always close n open cpfis for OA and transfer to cdp multiple times but with different banks, as long as got cpf money with min 20K - i can always close my cpfis to transfer to cdp without touching my shielded SA - correct!?

I went to White sand posb branch in pasir ris. Its service is better than ocbc.
You can open with same bank.
To close cpfia, click icon "Withdraw investments" after login to cpf website, in Investment dashboard. CPF will also transfer all your SA investment to u.

 

[a4973]

I went to White sand posb branch in pasir ris. Its service is better than ocbc.
You can open with same bank.
But i don't know whether SA investments also must be closed when you close cpfia. I do not have any SA investment

Thanks for your update, let's talk about OA since you've experienced it. So basically you go in person to the branch and just ask for any Tbills nearing maturity and you are given some options. You probably have to tell them the $ amount you are investing. Then from the options provided to you, you choose the appropriate then fill up the form and that's it? Wonder if the various Tbills options can be gotten over the phone instead say via hotline > investment ?

 

[closeCPFIAopenCPFIA]

Thanks for your update, let's talk about OA since you've experienced it. So basically you go in person to the branch and just ask for any Tbills nearing maturity and you are given some options. You probably have to tell them the $ amount you are investing. Then from the options provided to you, you choose the appropriate then fill up the form and that's it? Wonder if the various Tbills options can be gotten over the phone instead say via hotline > investment ?

Yes. U walk in and wpm asks u what u want.
Buy t bill/bond(like BS22115F, BS22116Z, BS22117S,etc) from secondary market with cpf oa.
WPM(wealth planning manager) from dbs will give u a "what are u talking about" look. wpm goes backend to ask. wpm pulls up form to fill.
wpm asks which bill(eg BS22126Z), nominal size( eg 288K).
wpm calls their treasury trading desk. replies "no have".
u try the next t bill until they have.
wpm asks trading desk for price to purchase and quote u.
wpm Fills up form and u sign.
wpm submits form by asking runner/intern/trainee to goes backend and ?fax? to trading desk. T+2 settlement.

 

[vsvs24]

Yes. U walk in and wpm asks u what u want.
Buy t bill(like BS22115F, BS22116Z, BS22117S,etc) from secondary market with cpf oa.
WPM(wealth planning manager) from dbs will give u a "what are u talking about" look. wpm goes backend to ask. wpm pulls up form to fill.
wpm asks which bill(eg BS22126Z), nominal size( eg 288K).
wpm calls their treasury trading desk. replies "no have".
u try the next t bill until they have.
wpm ask trading desk for price to purchase and quote u.
wpm Fills up form and u sign.
wpm submits form. T+2 settlement.

You did this at White Sands POSB ?

 

[closeCPFIAopenCPFIA]

You did this at White Sands POSB ?

Yes sir.

 

[BBCWatcher]

you really dont get it do you? the difference is small and i dont have ocd.

No Dork32, the difference is not small, not currently. It's 15 basis points of difference in a current market environment where the most recent 6 month T-bill had a cut-off yield of 4.00%. This 15 basis point difference between COY and EIR is very, very important in current bidding conditions. And this fact should be obvious.

 

[a4973]

Yes. U walk in and wpm asks u what u want.
Buy t bill/bond(like BS22115F, BS22116Z, BS22117S,etc) from secondary market with cpf oa.
WPM(wealth planning manager) from dbs will give u a "what are u talking about" look. wpm goes backend to ask. wpm pulls up form to fill.
wpm asks which bill(eg BS22126Z), nominal size( eg 288K).
wpm calls their treasury trading desk. replies "no have".
u try the next t bill until they have.
wpm asks trading desk for price to purchase and quote u.
wpm Fills up form and u sign.
wpm submits form by asking runner/intern/trainee to goes backend and ?fax? to trading desk. T+2 settlement.

This whole process sounds like at least 2 hours ?

 

[closeCPFIAopenCPFIA]

This whole process sounds like at least 2 hours ?

It should be less than 1 hour. But wpm not sure how to fill the accrued interest which is applicable for SGS Bond only and the charges/fee(0).
wpm asks me to go lunch and will call me. Took around 1.5h.

1st time i bought from the secondary market was from ocbc. On 1st Jun 22, i went to tampines cpf building OCBC branch to buy BS21124T maturing 14 Jun 2022.
That time nobody interested in t bill, rm not sure, said would call me to quote purchase price. A few hours later , received call of purchase price 99.979 per 100. Went back to sign. But few days later i had to go back to re-sign twice. But everything settled and on maturity date 14 jun 2022. i closed my cpfia. And ocbc posted me a cheque to encash about 5 working days later.
So i lost 1 month of oa interest, less about $15 but incurred 2.68 fee and 10.70 cdp fee.