Self-Employed: Monthly Voluntary Contribution vs 1 Time contribution

[Shutterfly]

Let's say usually for self-employed, I plan to contribute $500 monthly via giro to CPF. Does it make more sense for me to do a one-time contribution of $6000 in the beginning of year to earn the monthly interest rather than spreading it out over 12 months? Assuming I can afford to do so.

Thanks in advance for any advice.

 

[addict951]

No no ts, dun one time.
do it monthly
You nv hear those SEP? Those nv contribute cpf one could not get the $9000 handout.
Do it monthly hor, have a track record, then they check cpf can give it to you asap.

 

[zoneguard]

If your objective is to solely to maximize interest, lump sum your VC on the 31st of January with Paynow (which takes effect same day) as CPF calculates interest based on lowest balance of the month, so you maximize bank interest in January and maximize CPF interest from February. OA to SA transfers earn interest in the same month in SA if your SA is below FRS and you intend to do that too.

If you have other objective, do as what addict951 says.

 

[Shutterfly]

No no ts, dun one time.
do it monthly
You nv hear those SEP? Those nv contribute cpf one could not get the $9000 handout.
Do it monthly hor, have a track record, then they check cpf can give it to you asap.

I believe the trade assessment declaration and the compulsory monthly medisave contribution should suffice. I did not really follow the SEP thread because I managed to get mine without application.

 

[Shutterfly]

If your objective is to solely to maximize interest, lump sum your VC on the 31st of January with Paynow (which takes effect same day) as CPF calculates interest based on lowest balance of the month, so you maximize bank interest in January and maximize CPF interest from February. OA to SA transfers earn interest in the same month in SA if your SA is below FRS and you intend to do that too.

If you have other objective, do as what addict951 says.

Yes, main objective is maximise the interest. I am just thinking since bank interest rate is bad everywhere, might as well put the money that I intended to contribute as one lump sum right at the start of the year rather than spreading it out next 12 months. Thank you for the additional tip on how to maximise it further. Are you doing that now?

 

[reddevil0728]

Yes, main objective is maximise the interest. I am just thinking since bank interest rate is bad everywhere, might as well put the money that I intended to contribute as one lump sum right at the start of the year rather than spreading it out next 12 months. Thank you for the additional tip on how to maximise it further. Are you doing that now?

if cashflow isn’t a concern why not

 

[zoneguard]

Yes, main objective is maximise the interest. I am just thinking since bank interest rate is bad everywhere, might as well put the money that I intended to contribute as one lump sum right at the start of the year rather than spreading it out next 12 months. Thank you for the additional tip on how to maximise it further. Are you doing that now?

Unfortunately I don't qualify for OA to SA transfers.
BBCWatcher shared about OA to SA transfers earning interest in SA in the same month. On further thoughts, the top-up should be done on 1st January - if you qualify for OA to SA transfers to maximize the interest.

 

[Shutterfly]

if cashflow isn’t a concern why not

Yes, that would be my excess. Usually will park at fixed deposit, but no good rate now.

 

[BBCWatcher]

Unfortunately I don't qualify for OA to SA transfers.
BBCWatcher shared about OA to SA transfers earning interest in SA in the same month. On further thoughts, the top-up should be done on 1st January - if you qualify for OA to SA transfers to maximize the interest.

Uh, no. The only reason to put cash into CPF on January 1 (or any day prior to very near the end of the month) is if you’re trying to get something credited before something else is credited or debited. For example, if your MediSave Account is at $60,000 today (the 2020 Basic Healthcare Sum), and if your payroll contributions ordinarily land in your CPF accounts on the 10th day of the month give or take, and if you’re trying to add $3,000 of cash to your MediSave Account to raise it to the 2021 BHS before your payroll contributions hit, then it’ll be a good idea to do that on, say, January 5th. (MediSave contributions must still fit within the BHS and CPF Annual Limit.) Otherwise, unless you’re trying to beat something else to the punch, no, wait until the end of the month. Your cash is earning a little interest elsewhere, so set a reminder to yourself on your smartphone (or whatever) and don’t worry about it.

 

[Shutterfly]

Uh, no. The only reason to put cash into CPF on January 1 (or any day prior to very near the end of the month) is if you’re trying to get something credited before something else is credited or debited. For example, if your MediSave Account is at $60,000 today (the 2020 Basic Healthcare Sum), and if your payroll contributions ordinarily land in your CPF accounts on the 10th day of the month give or take, and if you’re trying to add $3,000 of cash to your MediSave Account to raise it to the 2021 BHS before your payroll contributions hit, then it’ll be a good idea to do that on, say, January 5th. (MediSave contributions must still fit within the BHS and CPF Annual Limit.) Otherwise, unless you’re trying to beat something else to the punch, no, wait until the end of the month. Your cash is earning a little interest elsewhere, so set a reminder to yourself on your smartphone (or whatever) and don’t worry about it.

Thanks for the tip!