Does HDB wipe the minimum OA amount?

[kikila]

Hello. I understand that during the collection of flat keys, HDB will wipe our OA account. I'm wondering if anyone has the first hand experience if HDB would wipe the minimum OA sum as well?

So what I'm asking is, does HDB only wipe the amount about the minimum sum? Or the entire OA (including minimum sum of 20k) ?

 

[Bedokian]

All, lock stock and barrel.

 

[kikila]

All, lock stock and barrel.

thanks bro.

 

[akwl88]

wipe out OA to reduce the loan

 

[koja6049]

stash all into your SA for 4% to beat the 2.6% interest

 

[foozgarden]

stash all into your SA for 4% to beat the 2.6% interest

yea, i was thiking the same too.
before gettin gyour keys. transfer all OA to SA.

 

[starfish.starfish]

yea, i was thiking the same too.
before gettin gyour keys. transfer all OA to SA.

Think carefully since it's a one way street woh.

 

[BBCWatcher]

OA to SA is one way (your SA and/or somebody else's), and/or you can use the CPF Investment Scheme to push your OA funds into an investment. If you want the safest investment (and still with some interest), the 5 year Singapore Government Security (SGS). The 2 year bond is on sale now (as I write this), the 10 year bond is next month, and the 5 year bond is in March.

 

[Earnasyougrow]

Think carefully since it's a one way street woh.

No diff cos the OA get wipe out anyway. Why not transferred to SA (4% vs 2.6% hdb loan) to get more interest for retirement?

 

[doody_]

No diff cos the OA get wipe out anyway. Why not transferred to SA (4% vs 2.6% hdb loan) to get more interest for retirement?

Difference is when selling the money go back to OA and can be used to buy the next property.

 

[BBCWatcher]

Difference is when selling the money go back to OA and can be used to buy the next property.

Future cash and additional employment-related contributions also work.

There's also the fact that OA to SA conversions mean you've got that much more saved for retirement...and that much less to save for retirement otherwise.

 

[hwmook]

I invest my money from CPF OA so they only get to wipe out whatever I left for them. After that I sold some investment to top up OA close to 20k to get the extra 1%. If you let them wipe every single cent then you lose out on the 1% interest for the first 20k in OA lor. I earn 3.5% and they charge me 2.6%, not bad deal.

 

[Stallone]

I invest my money from CPF OA so they only get to wipe out whatever I left for them. After that I sold some investment to top up OA close to 20k to get the extra 1%. If you let them wipe every single cent then you lose out on the 1% interest for the first 20k in OA lor. I earn 3.5% and they charge me 2.6%, not bad deal.

we earn the 3.5% only based on 20k

they charge us 2.6% based on dunno how many hundreds of thousands

 

[lusunshine]

we earn the 3.5% only based on 20k

they charge us 2.6% based on dunno how many hundreds of thousands

If you use the 20K to pay off the dunno how many hundreds of thousands, they still charge you 2.6% based on dunno how many hundreds of thousands - 20K.

 

[havetheveryfun]

If you use the 20K to pay off the dunno how many hundreds of thousands, they still charge you 2.6% based on dunno how many hundreds of thousands - 20K.

$20000 means $1666 a month

Does that mean that if you limit your loan to $1666 a month or less, you will not lose any money ?

 

[vince123123]

$20,000 is $700 per year, not $1666 per month.

$20000 means $1666 a month

Does that mean that if you limit your loan to $1666 a month or less, you will not lose any money ?

 

[havetheveryfun]

$20,000 is $700 per year, not $1666 per month.

Err no, im not that greedy to want the interest to pay for my loan completely.

What I meant is I wont lose money to the loan interest if I maintain at least 20k in the OA all the time?

Since the loan is 2.6% and OA interest for first 20k is 3.5%. The original loan amount of course would still have to paid back regularly.

 

[hwmook]

we earn the 3.5% only based on 20k

they charge us 2.6% based on dunno how many hundreds of thousands

You borrow money then of course need to pay interest. It's just that the first 20K in OA should not let HDB wipe out as you can earn more from it than the loan interest rate.

 

[starfish.starfish]

I invest my money from CPF OA so they only get to wipe out whatever I left for them. After that I sold some investment to top up OA close to 20k to get the extra 1%. If you let them wipe every single cent then you lose out on the 1% interest for the first 20k in OA lor. I earn 3.5% and they charge me 2.6%, not bad deal.

Yup that's what I did too...

 

[kehyi4]

i see quite a lot of people talk about the extra 1% interest... keeping 20k in OA just to earn that interest. Do you know that:
---
CPF FAQ:
How is my CPF interest computed and credited into my accounts?

A: (edited for brevity)
An extra 1% interest per annum will also be paid on the first $60,000 of a member's combined balances.

The priority of the accounts that make up the $60,000 is as follows:

1st: Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2nd: Ordinary Account (OA), up to $20,000
3rd: Special Account (SA)
4th: Medisave Account (MA)

The extra interest received on the OA will go into the member's SA if he is below 55 years old or RA if he is 55 and above to enhance his retirement savings.
---

This means:

1. As long as you have 60k total balance in CPF, you will be earning the max amt of extra 1% extra interest. You DO NOT have to keep 20k in OA to earn it.

2. The extra interest from OA goes into your SA if you are under 55, NOT into your OA. Thus all those who think they are earning 3.5% OA interest is, erm, wrong. You are still earning 2.5% OA interest, but contributing that extra 1% to your SA. ie, it doesn't help you pay your housing instalments or whatever.

3. Effectively, if you have more than 60k in your SA, you can just think of the first 60k in SA as earning 5% and ignore your OA balance for the extra 1%. The maths work out the same, but it's a much simpler calculation.