OCBC FD for CPF?

[hwmook]

if you are thinking about earning more interest thru cpf, you might as well as transfer from oa to sa.

oa earns 3.5% on first 20k. but if you look at the fine print 2.5% go to oa and 1% go to sa. you will be paying 2.6% on hdb loan.

if you are hoping to do this, oa loses, sa wins. it is like transferring money from oa to sa

Lose 0.1% on OA, earn 1% in SA while keeping $20k in OA as buffer for installment in case you are in between jobs etc.

Transfer to SA can earn 0.5% more but lose that buffer instead and also the flexibility of using it for housing if you do well enough to upgrade your housing.

 

[edwinttt1978]

To complicate matters, another CPF component needs mentioning - The accrued interest.

Accrued Interest (Property)
This is the interest that you would have earned had your savings remained in your CPF account. Please view your Housing Withdrawal Details for the actual amount to be refunded when you sell your property.

 

[edwinttt1978]

like i said it does not matter when you retire. as long as the interest rate of the loan is lower than cpf. you should keep money in it and not repay the loan.

but i did mention 54 years old. the reason is i am not for the retirement account. this is one black box with very shady calculations. you should repay all your loans at 54. otherwise, one the money goes into the black box at 55, it is very difficult to take it out again.

even if you are not working at 50, you do not repay the loan. just keep in the cpf and pay installment every month using the cpf.

trust me. i can count.

The black box is almost an abyss for most Singaporeans who are already complaining about not getting all their CPF monies back at 55yo.

Q: Can I use my Retirement Account savings to pay for my monthly housing instalments or lump sum payment?
A:* If you were born on or after 1 July 1940, the amount you can use from your Retirement Account for your monthly instalments or lump sum payment is the funds in excess of the Minimum Sum you need to set aside in cash.

For example, you are 55 years old and have set aside the Minimum Sum of $155,000 fully in cash. You will need to retain at least $77,500 (and the accrued interest) in your Retirement Account before any cash can be released for your housing payment. You may then use $77,500 from your Retirement Account to pay for your monthly instalments or lump sum payment.

 

[djchris]

The black box is almost an abyss for most Singaporeans who are already complaining about not getting all their CPF monies back at 55yo.

Q: Can I use my Retirement Account savings to pay for my monthly housing instalments or lump sum payment?
A:* If you were born on or after 1 July 1940, the amount you can use from your Retirement Account for your monthly instalments or lump sum payment is the funds in excess of the Minimum Sum you need to set aside in cash.

For example, you are 55 years old and have set aside the Minimum Sum of $155,000 fully in cash. You will need to retain at least $77,500 (and the accrued interest) in your Retirement Account before any cash can be released for your housing payment. You may then use $77,500 from your Retirement Account to pay for your monthly instalments or lump sum payment.

I've also explored annuities but right now I feel that I need a decent investment portfolio before annuities. Then I can choose opt out of CPF Life if I want to.

 

[henrylbh]

I've also explored annuities but right now I feel that I need a decent investment portfolio before annuities. Then I can choose opt out of CPF Life if I want to.

I very much doubt that there is any annuity in the market that's better than CPF Life. We just got to accept CPF Life and keep nudging the gahman to give a better return (payout) and stop increasing the min sum, especially medisave min sum that actually got no min sum and no payout and increasing the drawdown age.

 

[henrylbh]

If I recall correctly you got hard commodity investment that does not generate passive income.

 

[hwmook]

To complicate matters, another CPF component needs mentioning - The accrued interest.

Accrued Interest (Property)
This is the interest that you would have earned had your savings remained in your CPF account. Please view your Housing Withdrawal Details for the actual amount to be refunded when you sell your property.

If you don't sell your property, its never a factor but if you do then you need to pay back. Pretty straight forward.

CPF loan is not fixed at 2.6%, its 0.1% above OA interest rate which in turn is pegged to 10yrs SGS rate. Current floating interest rate is close to 5yr SGS rate so taking a CPF loan ensure that you are AlWAYS paying a above market rate for housing loans since 10yr SGS yield will never be lower than 5yr SGS yield. The gov has already change the rules of the game but people are still happily taking CPF loans thinking its a better deal when rates go up.

 

[dork32]

To complicate matters, another CPF component needs mentioning - The accrued interest.

Accrued Interest (Property)
This is the interest that you would have earned had your savings remained in your CPF account. Please view your Housing Withdrawal Details for the actual amount to be refunded when you sell your property.

it does not matter whether you have to pay back your accrued interest or not, as long as the loan rate is below the cpf rate, do not repay the loan with the cpf.

 

[Dividends Moderator]

I very much doubt that there is any annuity in the market that's better than CPF Life. We just got to accept CPF Life and keep nudging the gahman to give a better return (payout) and stop increasing the min sum, especially medisave min sum that actually got no min sum and no payout and increasing the drawdown age.

While garment is expected to provide more freedom to allocation of cash and rate of distribution, increments in min sum is necessary to keep up with inflationary measures. Again, others might say raise interest rates but there are many factors behind this solution. Perhaps, justifying the min sum increments may be a temporary solution.

 

[edwinttt1978]

it does not matter whether you have to pay back your accrued interest or not, as long as the loan rate is below the cpf rate, do not repay the loan with the cpf.

Yes, it does not matter other than being less asthetically appealing on CPF statement.

 

[djchris]

I very much doubt that there is any annuity in the market that's better than CPF Life. We just got to accept CPF Life and keep nudging the gahman to give a better return (payout) and stop increasing the min sum, especially medisave min sum that actually got no min sum and no payout and increasing the drawdown age.

It depends. CPF Life is an annuity that draws down your retirement account and pay you a fixed amount each year.

I've been looking at the Tokio Marine Retirement GIO and the total premium is higher by 20-30k to get an equivalent lifetime payout as CPF Life, but it does not draw down on your premiums. When you die, your family gets the total premium you have paid for + 1%.

 

[djchris]

If I recall correctly you got hard commodity investment that does not generate passive income.

Gold?

I cleared out 90% of my bullion gold and silver years ago and used the profits to pay off my study loan. Even my gold blog was sold off.

 

[djchris]

Gold?

I cleared out 90% of my bullion gold and silver years ago and used the profits to pay off my study loan. Even my gold blog was sold off.

Thanks everyone for sharing their insights on this, even though TS started the thread to talk about OCBC FD. I've learnt a lot here and I'm sure the next refinancing contract I sign, will be maxed to the end.

 

[Skypower]

Thanks for all comments... Appreciate all effort in reply.

However my question is still unanswer - Does OCBC offer FD account for CPF deposit?

 

[ykeen]

Thanks for all comments... Appreciate all effort in reply.

However my question is still unanswer - Does OCBC offer FD account for CPF deposit?

Don't think any banks in SG offer this.

U keep in CPF already have 2.5% ..what more you want?

 

[henrylbh]

Thanks for all comments... Appreciate all effort in reply.

However my question is still unanswer - Does OCBC offer FD account for CPF deposit?

You intend to put money in FD in OCBC using CPF money?

Better buy OCBC shares using CPF money giving quite a consistent yield of above 3% over the years based on current price.

 

[djchris]

Hi all, I spoke to my banker and I can change the terms of my loan from 16 years to 23 years, moving my monthly repayment of 1.1k+ to 800+. This change will cost a fee of $250. Just want to get a consensus here whether I should do it. I think I know the answer, but want to see what you guys would say.

 

[dork32]

Hi all, I spoke to my banker and I can change the terms of my loan from 16 years to 23 years, moving my monthly repayment of 1.1k+ to 800+. This change will cost a fee of $250. Just want to get a consensus here whether I should do it. I think I know the answer, but want to see what you guys would say.

it depends on a number of factors.
1. The loan interest rate. I assume it is 1.8% since you say it is hdb loan.
2. The lock in period before you can/need to refinance. If you do not need to refinance, then you need to calculate the number of months to break even.

For your benefit fv(0.007/12,n,300,0) - 300*n
For your cost 250*(1+0.025/12)^n
where n is the number of months.
Your benefit will exceed the cost after 58 months (almost 5 years)

A normal guy refinance their loan after every 3 years.

 

[djchris]

Additional information:
- No lock in period
- Interest rate is 1.25% (1st yr), 1.35% (2nd yr), 1.6% (3rd yr) and 1.65% (4th onwards)
- can make repayment anytime as long as min. sum is 10k

 

[djchris]

I'm sorry my maths is bad. Does this mean that if I pay 250 to extend 7 years, it may not be that worthwhile?