CPF SA

[BBCWatcher]

Cna anyone teach me how to get rid of this?

I need it to be in SA or MA.

I believe what you're seeing is that some amount of interest credited to your MA on December 31 couldn't fit within the 2020 Basic Healthcare Sum, so "spillover" rules applied. Your SA had already reached the Full Retirement Sum ($181,000 in 2020), so that portion of your MA interest spilled over into your OA....

....And that's a done deal, really. Congratulations! You're a BHS+FRS person under age 55. A lot of people aren't so fortunate. So your OA is now going to start to get some dollars from this point forward. But that's OK since they still earn 2.5% interest, and that's pretty good these days. You have some other possible options:

1. Since you have reached the Full Retirement Sum (and more), you have no limitation now if you want to transfer those OA dollars to an eligible family member's SA or RA. The recipient needs some top up room, though.

2. Just before your 55th birthday (and unless the rules change) you'll be able to "shield" your SA dollars (all except $40,000) and then use OA to fund the remainder of your RA as your RA is created on your 55th birthday. (You could also "shield" OA dollars above $20,000 if you want to fund your RA with cash.)

3. Use the OA dollars for housing or education.

4. Once your OA balance gets above $20,000, you can participate in the CPF Investment Scheme (OA) if you wish.

 

[OngHuatHuat]

Okay thanks. I just paynow MA to get tax relief, will just let the money stay in MA for the time being.

I believe what you're seeing is that some amount of interest credited to your MA on December 31 couldn't fit within the 2020 Basic Healthcare Sum, so "spillover" rules applied. Your SA had already reached the Full Retirement Sum ($181,000 in 2020), so that portion of your MA interest spilled over into your OA....

....And that's a done deal, really. Congratulations! You're a BHS+FRS person under age 55. A lot of people aren't so fortunate. So your OA is now going to start to get some dollars from this point forward. But that's OK since they still earn 2.5% interest, and that's pretty good these days. You have some other possible options:

1. Since you have reached the Full Retirement Sum (and more), you have no limitation now if you want to transfer those OA dollars to an eligible family member's SA or RA. The recipient needs some top up room, though.

2. Just before your 55th birthday (and unless the rules change) you'll be able to "shield" your SA dollars (all except $40,000) and then use OA to fund the remainder of your RA as your RA is created on your 55th birthday. (You could also "shield" OA dollars above $20,000 if you want to fund your RA with cash.)

3. Use the OA dollars for housing or education.

4. Once your OA balance gets above $20,000, you can participate in the CPF Investment Scheme (OA) if you wish.

 

[BBCWatcher]

I understand that CPF interest is calculated based on the lowest balance of each month so the best time to top-up is to top up on the last possible day of a given month.

Generally speaking, yes, unless you're trying to beat some other event that could affect your ability to top up/contribute.

How about transfer between account? example OA to RA/MA?

I think you mean OA to SA, right?

If I were to transfer OA balance to RA/MA mid month, will I end up losing the interest on that portion in my OA and also RA/MA, because this will result in either account taking the lowest balance of that month.

OA (minus) amount transferred
RA/MA before amount transferred

No, this is an exception. You can make this transfer any time you wish during the month. Yes, you will lose 2.5% OA interest for that month, but you'll gain 4.0% SA interest for that month retroactive to the first day of the same month.

My recommendation is also to perform OA to SA transfers on the second to last day of the month. If during that extra ~28 days you lose your job (for example) and want to reconsider how much OA to retain, you can.

Okay thanks. I just paynow MA to get tax relief, will just let the money stay in MA for the time being.

Why did you put money into MA on January 1? There's no point in doing it this early in the month unless you're trying to beat some payroll cycle that'll put funds into MA within the next few days or some other meaningful event, such as an Integrated Shield plan premium payment that'll be deducted from your MA within the next few days. All you've done is lost ~29 days of bank interest if you weren't trying to beat some other event.

 

[OngHuatHuat]

Paynow top up reflected almost instantaneously, so guess today daily balance will be the new daily balance?

Generally speaking, yes, unless you're trying to beat some other event that could affect your ability to top up/contribute.


I think you mean OA to SA, right?


No, this is an exception. You can make this transfer any time you wish during the month. Yes, you will lose 2.5% OA interest for that month, but you'll gain 4.0% SA interest for that month retroactive to the first day of the same month.

My recommendation is also to perform OA to SA transfers on the second to last day of the month. If during that extra ~28 days you lose your job (for example) and want to reconsider how much OA to retain, you can.


Why did you put money into MA on January 1? There's no point in doing it this early in the month unless you're trying to beat some payroll cycle that'll put funds into MA within the next few days or some other meaningful event, such as an Integrated Shield plan premium payment that'll be deducted from your MA within the next few days. All you've done is lost ~29 days of bank interest if you weren't trying to beat some other event.

 

[JTJK00]

31 Jan 2021 with Paynow, to maximize bank interest (Jan 2021) and CPF interest from Feb 2021 (computes based on lowest monthly balance)

actually why not contribute today (1 Jan) with Paynow? will the existing balance be taken as the lowest monthly balance rather than the topped-up amount?

 

[highsulphur]

If I am likely to hit the annual contribution cap, does it make sense to transfer from my OA to MA to hit the BHS cap rather than to top up with cash?

I don't want to get refunded my cash top up to MA like before

 

[sharah]

I think you mean OA to SA, right?

No, this is an exception. Yes, you will lose 2.5% OA interest for that month, but you'll gain 4.0% SA interest for that month retroactive to the first day of the same month.

This is new information to me and I guess you are right, when I calculated interest on minimum balances of each account, I noticed slightly more interest in SA possibly explaining what you stated.

Does this interest scenario work the same way when money is transferred to eligible accounts other than self?

 

[Okenba]

If I am likely to hit the annual contribution cap, does it make sense to transfer from my OA to MA to hit the BHS cap rather than to top up with cash?

I don't want to get refunded my cash top up to MA like before

I don't think you can transfer from OA to MA. Can meh?

 

[Okenba]

No, this is an exception. You can make this transfer any time you wish during the month. Yes, you will lose 2.5% OA interest for that month, but you'll gain 4.0% SA interest for that month retroactive to the first day of the same month.

I'm actually curious about this. I've heard it said before, but I don't remember who mentioned it. Can we get a link on this?

 

[peacefulday]

If I am likely to hit the annual contribution cap, does it make sense to transfer from my OA to MA to hit the BHS cap rather than to top up with cash?

I don't want to get refunded my cash top up to MA like before

OA cannot transfer to MA. Only for cash top up.

 

[BBCWatcher]

This is new information to me and I guess you are right, when I calculated interest on minimum balances of each account, I noticed slightly more interest in SA possibly explaining what you stated.

Does this interest scenario work the same way when money is transferred to eligible accounts other than self?

I'm actually curious about this. I've heard it said before, but I don't remember who mentioned it. Can we get a link on this?

The CPF Board explains how it works. To summarize:

1. When you transfer your OA dollars to your SA, you lose 2.5% OA interest for the transfer month (or already won't earn OA interest if the OA dollars were deposited in the transfer month) but you start earning 4.0% SA interest retroactive to the first day of the transfer month.

2. When you transfer OA dollars to a qualified family member's SA or RA, the same thing happens as #1. And the CPF Board won't give the recipient interest for the transfer month if the OA dollars were only deposited in the transfer month, not prior.

In short, you (or your recipient) can only gain interest with OA to SA/RA transfers. You won't lose any interest.

 

[peacefulday]

Before MA cash top up
Date
01 Jan 2021
Time
09:22 AM (Singapore Time)
You can still contribute $37,740.00 * as Voluntary Contribution to your Ordinary, Special and Medisave Accounts.

After MA $3k top up
Date
01 Jan 2021
Time
09:33 AM (Singapore Time)
You can still contribute $34,740.00 * as Voluntary Contribution to your Ordinary, Special and Medisave Accounts.

 

[zoneguard]

I don't think you can transfer from OA to MA. Can meh?

Can and even to loved ones' MA besides member's own MA, provided the member is 55 and above and met FRS or BRS with property pledge.
BUT withdrawal sequence starts from SA first then OA and cannot change.

Use CPF form "MHC-TRF 06/2019" to apply.

 

[kumokumo]

If I already topped up the $7k under RST before 31 Dec 2020, the tax relief will be applied to FY20?

I can start topping up from today 1st Jan for the tax relief to apply to FY21?

Need to get the dates right so I don't exceed the $7k limit for the year.

 

[a4973]

The CPF Board explains how it works. To summarize:

1. When you transfer your OA dollars to your SA, you lose 2.5% OA interest for the transfer month (or already won't earn OA interest if the OA dollars were deposited in the transfer month) but you start earning 4.0% SA interest retroactive to the first day of the transfer month.

2. When you transfer OA dollars to a qualified family member's SA or RA, the same thing happens as #1. And the CPF Board won't give the recipient interest for the transfer month if the OA dollars were only deposited in the transfer month, not prior.

In short, you (or your recipient) can only gain interest with OA to SA/RA transfers. You won't lose any interest.

How will the following work out?

Spouse 1 wants to transfer 5k to Spouse's 2 RA.
Spouse 1 receives 1k mandatory contribution in OA on 15 Jan 2021.

Any difference between the 5k transfer before / after 15 Jan 2021 for Spouse 1 and Spouse 2 ?

are the following correct?

transfer BEFORE 15 Jan 2021
Spouse 1 loses interest on the 5k for the full month of Jan 2021
Spouse 2 earns interest on the 5k for the full month of Jan 2021

transfer AFTER 15 Jan 2021
Spouse 1 loses interest on the 5k for the full month of Jan 2021
Spouse 2 earns interest on the 4k (5k - 1K) for the full month of Jan 2021

Thanks

 

[reddevil0728]

If I already topped up the $7k under RST before 31 Dec 2020, the tax relief will be applied to FY20?

I can start topping up from today 1st Jan for the tax relief to apply to FY21?

Need to get the dates right so I don't exceed the $7k limit for the year.

in SG tax concept. (Year of Assessment) YA2021 relates to Calendar Year (CY) 2020.

Don't confuse it with FY, because if not wrong sg govt fy is apr to Mar.

U should ideally top up on the last day of the month if not u forgo interest for the whole month when the money could be sitting somewhere else earning some interest than 0 interest.

 

[zoneguard]

How will the following work out?

Spouse 1 wants to transfer 5k to Spouse's 2 RA.
Spouse 1 receives 1k mandatory contribution in OA on 15 Jan 2021.

Any difference between the 5k transfer before / after 15 Jan 2021 for Spouse 1 and Spouse 2 ?

are the following correct?

transfer BEFORE 15 Jan 2021
Spouse 1 loses interest on the 5k for the full month of Jan 2021
Spouse 2 earns interest on the 5k for the full month of Jan 2021

transfer AFTER 15 Jan 2021
Spouse 1 loses interest on the 5k for the full month of Jan 2021
Spouse 2 earns interest on the 4k (5k - 1K) for the full month of Jan 2021

Thanks

I interpret the rules this way:
Spouse 2 will earn the full 5K interest for both scenarios as Spouse 1 had 5K in OA to begin with - it wasn't from contributions for full month of Jan 2021.

Spouse 1's OA interest is calculated based on the lowest monthly balance. If transfer 5K first, lowest balance straightaway: Balance-5K. If transfer 5K after contributions,lowest balance is 4K less from that point (Balance+1K-5K) onwards hence do transfer after the contribution.

Agree?

 

[a4973]

https://www.cpf.gov.sg/members/FAQ/schemes/retirement/retirement-sum-topping-up-scheme?ajfaqid=faq2188844

this is the FAQ word for word.

Q When will my top-ups earn interest in my/my recipient’s Special/Retirement Account?
A
CPF balances used for interest computation are affected by the transactions in your account.

Contributions, including cash top-ups, received this month will start earning interest next month.

As for CPF transfers, in general, the recipient will earn interest on such monies received in the month of transfer, and the giver will not since the monies had been deducted. If the giver had received contributions and transferred them, the recipient will then earn interest next month.

 

[karakorum1999]

https://www.cpf.gov.sg/members/FAQ/schemes/retirement/retirement-sum-topping-up-scheme?ajfaqid=faq2188844

this is the FAQ word for word.

Q When will my top-ups earn interest in my/my recipient’s Special/Retirement Account?
A
CPF balances used for interest computation are affected by the transactions in your account.

Contributions, including cash top-ups, received this month will start earning interest next month.

As for CPF transfers, in general, the recipient will earn interest on such monies received in the month of transfer, and the giver will not since the monies had been deducted. If the giver had received contributions and transferred them, the recipient will then earn interest next month.

Wow, this makes it pretty clear.
That means if the giver would not be receiving interest on the said amount anyway before the transfer (e.g. that amount was only credited in the same month from MC/VC/top-up), then CPF would not give interest on this amount for the recipient upon transfer. So no loophole here.

 

[a4973]

Wow, this makes it pretty clear.
That means if the giver would not be receiving interest on the said amount anyway before the transfer (e.g. that amount was only credited in the same month from MC/VC/top-up), then CPF would not give interest on this amount for the recipient upon transfer. So no loophole here.

it is clear cut if the transferred amount is = / < contribution amount however does the FAQ then imply if the transferred amount is > contribution amount then the difference will still earn interest in the current month?