My SA has met current FRS.
How about your spouse?
I have no 3rd choice, except looking for high yield investments
You do have other choices, including the safest Singapore dollar choices. Let's take a look together....
There's a 15 year government bond coming to auction in September, issue code NZ13100V. You mentioned you have about 9 years to go to age 55, so I assume you're age 46 or thereabouts. The 15 year bond is currently yielding right around 2.7%, and that beats 2.5%. It'd take you up to age 61 or so, and that happens to work quite well for SRS purposes if you'd like to tuck some of that 15 year bond inside a SRS account and plan to draw down SRS starting at age 62.
I think I'd take the 2.7% bond over 2.5% OA. You can also sell a bond on the secondary market before maturity if need be, although there's no guarantee you'll get a particular price on the secondary market.
Perfect timing, really, because the maturity of that bond (return of principal) will land right in between your age 55 CPF withdrawal eligibility (earliest) and your age 65 CPF LIFE payout eligibility (earliest). You are, of course, allowed to defer both those dates, and I would if able. And if you don't need the principal proceeds of that maturing bond then you're certainly allowed to roll it over into paying yourself into your OA. You can also roll coupons in along the way, if you wish.
Hypothetically OA interest rates could rise above 2.5%, but that's not looking likely. The floor rate is still over 2 percentage points above the reference market interest rate. I'd take the 2.7% over the 2.5%, assuming you have a reasonable or better expectation to hold for the full 15 years. (Not absolutely mandatory you hold, but you should have that expectation.)
Let's see what else we've got....
There's this month's Singapore Savings Bond (SSB). If you hold this SSB to maturity (10 years), you get 2.57% yield. Still better than OA over that term, and it's much more liquid (albeit without the yield to maturity). The only problem is that you probably won't be able to stuff too much money into SSBs, but you and a spouse can each try to buy some.
So, does 2.57% for a 10 year hold, with intermediate liquidity and semi-annual coupon inflows, beat 2.5% for 9 years? It's a little closer call, but I'd say it does, yes.
Do you have any stock holdings? How much? At age 46, you've got roughly 20 years to run, and that's a pretty decent time horizon. So you could mix in some potentially higher yielding stuff.
Medisave top-ups with tax relief may also be possible if you or your spouse haven't reached the Basic Healthcare Sum (BHS) yet. Such top-ups must fit within the CPF Annual Limit. That earns 4% interest which bounces over to your Special Account.
You're certainly allowed to combine these various choices, and possible others.
