My bank savings yield has dropped below cpf oa2.5% for the first time in years and what it means for my housing loan

[chopra]

When I say “emergency fund,”

I’m referring to the need to prepare for unknown events
that can occur at unpredictable times
and may require an uncertain amount of money to resolve.

This amount could be anything
— from as little as $1 to as much as $50,000 or even $400,000.

so for me
my emergency fund are in
uob one + dbs multiplier + Uob stash

restricted by $200,000 per day limit

Same. Until chocolate, syfe, uob one, ega, ocbc360 , isavvy , (posb kungfu) etc collapse below 2.5%. I have all these.

 

[chopra]

will probably switch to refunding once the rates fall to 1.xx%

also depends on one's age. if close to 55 can start to treat refunding to OA as a fixed deposit...

yes dude. But dunno how to quantify. I wont do massively also. Quite frankly, i would max out my kids 60k cpf first. I know that might draw flaks too. I opened a thread on that a few years back, it does gain traction

 

[shinshin]

As OA is illiquid, I max out into equity investment regardless of interest rate environment. My aim is to grow it as big as possible and dump all into property when I retire.

I still dunno how basic/full retirement sum works, but that's still a long way for me.

Accumulate and grow now first.

 

[thretiredDad]

It’s quite odd that quantitatively, for a million cash + million equity + million cpf question, that we landed in 2 different answers.

the tazzy part n ur concern of having less cash to deploy is never really , a concern. Minimalist. Don’t spend much. Million dollar cash; wont burn in a year or two

it is also odd but not surprising that i had difficulty to quantify liquidity of cpf oa. Im 40s. So actually the journey to 55yo policy (assuming status quo) is not that long.

but ya, to each his own. As long as u know ur mathematics.

Well, I assume that between you and your wife, your household

has millions in cash,
million in equities, and
million in CPF,

so you probably know what you’re doing.

I’m just curious —

if that’s the case, why are you asking online for advice on what’s right or wrong?

In any case, as long as you’re comfortable, that’s what matters.

Do what feels right for you

 

[thretiredDad]

yes dude. But dunno how to quantify. I wont do massively also. Quite frankly, i would max out my kids 60k cpf first. I know that might draw flaks too. I opened a thread on that a few years back, it does gain traction

I top up each of my kid cpf
$10,000 each year too

 

[chopra]

Reddev bbc
Assume u have $100.i want to do a quick survey. Can u populate ur

A cash
B Mmf
C Bond
D Equity
E Cpf
F Debt

mine
A 69.000…9
B 0.000..1
C 0
D 30
E: 75 (ie i have $100 in ABCD and $75 in E)
F: 108 (ditto)

I'll take B first. We really don't have money market funds in Singapore, not as such. They're really short-term bond funds. I don't understand why so many people find short-term bond (debt instrument) funds attractive unless perhaps they're day traders and aren't going to stay in the short-term bonds funds long. Short-term bond funds are uninsured, and they rise and fall almost instantly with market interest rates.

Yes, I know the firms pushing them advertise heavily on bus stop billboards in HDB estates. That doesn't mean they're good choices.

In terms of cash it's not really about a percentage. It's "a couple months of ordinary household expenses." Supplemented by Singapore Savings Bonds (C category, but liquid within a few weeks at par plus accrued interest) and CPF OA. CPF OA counts in terms of servicing a mortgage. Your cash, SSBs, and CPF OA (for the housing portion only) should ideally total to at least 6 months of ordinary household expenses. Some people like a few more months, and that's fine in my view. Past 12 months it's getting too cash/cash-like heavy for my tastes unless you've got some big spending objective coming up soon like a wedding.

Category F (debt) is really just a "What are you buying, and how will you pay for it?" question. High cost debt is best avoided. Low cost debt can be wonderful.

There was a government that loaned me money (a student loan) at 0% interest with all payments deferred for years. That was wonderful. When that deal ended, and the interest rate rose from 0% to a moderate interest rate (not low, but also not awful) I decided to pay off the loan in full because fortunately I could while still maintaining adequate liquidity.

CPF is what I'd consider "bond-like." I'd treat it as an extension of your bond holdings.

And then there's bonds (including bond-like CPF) versus stocks. Some people like setting the stock allocation to 110% minus current age. I prefer holding 80% stocks (20% bonds) until age 50 then gradually converging to a 50-50 split (bonds-stocks) by age 65. I think a constant ratio until 50(ish) is simpler operationally, but either way seems fine to me.

Anyone care to show ur numbers? Basically list down how much money u gave in bank, bill bond cpf viz how much house car debt u have

Share is care

 

[chopra]

Well, I assume that between you and your wife, your household

has millions in cash,
million in equities, and
million in CPF,

so you probably know what you’re doing.

I’m just curious —

if that’s the case, why are you asking online for advice on what’s right or wrong?

In any case, as long as you’re comfortable, that’s what matters.

Do what feels right for you

Oh , maybe u re-read my first post in this thread. It is a comment/declaration. Not boasting, but i am not asking. Maybe just trying to validate how many others think alike me.

 

[chopra]

I top up each of my kid cpf
$10,000 each year too

Ya it’s a no thank job.

abit morbid. I top to my grandparents account to 60k too, in case medical care needs it. They Pass away one by one, and the money got 6%.

Alot of paternal maternal same same diff stories for the money; but let’s not get judgemental over it. If i may keep it short, the returned money has been largely controlled by me to unite e extended family together.

so i am good in mathematics and im also good in family bonding

 

[thretiredDad]

Ya I borrowed “money” as in housing loan. Multi million loan at 1.9% 5yr dbs fixed loan. Maturing in 2027. Janet yellens time….

my greatest regret
is not taking up the 1.9% for 5 years for my hdb
instead I took the 2 years option
because was thinking to clear the home loan first
but got into the 3.1% home loan for 2 years instead
what a mess

only took the 1.5% for 5 years
for my private

 

[thretiredDad]

Ya it’s a no thank job.

abit morbid. I top to my grandparents account to 60k too, in case medical care needs it. They Pass away one by one, and the money got 6%.

Alot of paternal maternal same same diff stories for the money; but let’s not get judgemental over it. If i may keep it short, the returned money has been largely controlled by me to unite e extended family together.

so i am good in mathematics and im also good in family bonding

i top up their cpf
every year
since they were born

into their cdac
for their pre school fee

 

[thretiredDad]

Oh , maybe u re-read my first post in this thread. It is a comment/declaration. Not boasting, but i am not asking. Maybe just trying to validate how many others think alike me.

Read many times
why the need to declare?
what you are doing right?

 

[chopra]

my greatest regret
is not taking up the 1.9% for 5 years for my hdb
instead I took the 2 years option
because was thinking to clear the home loan first
but got into the 3.1% home loan for 2 years instead
what a mess

only took the 1.5% for 5 years
for my private

Janet yellen dropped hint. But u arbitrage for a decent long period. Congrats to u

 

[chopra]

Read many times
why the need to declare?
what you are doing right?

It is a tipping point for general bank to drop below cpf oa.this is after holding for a few good years during biden administration

to me, this is like a small “earthquake “ seismic-ly. So i intro e topic to shake myself n everyone lor

 

[chopra]

i top up their cpf
every year
since they were born

into their cdac
for their pre school fee

No thanks job. Congrats. I will only do for 60k for ahgong ahma kids parents. All done

 

[thretiredDad]

No thanks job. Congrats. I will only do for 60k for ahgong ahma kids parents. All done

$20k OA
$40k SA+MA?

my eldest exceeded this amount
may I ask why just $60,000?

 

[chopra]

$20k OA
$40k SA+MA?

my eldest exceeded this amount
may I ask why just $60,000?

First 60k has 1% more

 

[thretiredDad]

First 60k has 1% more

My target is $100,000 in cpf
for each of my kid

 

[BBCWatcher]

I refer to “with no fee”

If you want to maintain more than a couple months of ordinary household expenses in bank accounts because you’re concerned about (for example) SSB redemption cycles for additional spendable funds, be my guest. In my view Visa and Mastercard (with conventional merchant acceptance and normal credit card billing cycles) plus SSBs work great for bigger/longer emergencies, but you’re free to disagree.

Some people actually find the “speed bump” of quick but non-instant liquidity to be helpful. Otherwise they tend to broaden the definition of emergency. Some people are concerned about theft and fraud, so they appreciate the monthly SSB redemption cycle (for example) to slow down theft and fraud, at least.

YMMV.

On edit: Emergency reserve funds are not necessarily the only funds you can tap in an emergency. The idea is to have some spendable funds for emergencies without having to tap into long-term assets such as stock and bond funds. But stock and bond funds are quite liquid — spendable within a couple or few days. If the emergency is big/long enough, those liquid assets would be available too.

Anyone care to show ur numbers? Basically list down how much money u gave in bank, bill bond cpf viz how much house car debt u have

Not really, not in detail. But I will say that vehicle loan offers in Singapore typically aren’t great. And if you must go into debt to buy a car, don’t buy a car. Cars are almost always pure luxuries in Singapore.

 

[fire]

My target is $100,000 in cpf
for each of my kid

Including medisave?

 

[thretiredDad]

Including medisave?

including