Suddenly FD rates went up

[born2fly]

SP500 near all time high how to lose money?

If it’s so simple, everyone bought at the low and sell at the high this world won’t have poor ppl and bankrupt investors liao….

 

[mooseolly]

If it’s so simple, everyone bought at the low and sell at the high this world won’t have poor ppl and bankrupt investors liao….

Investing is simple but not easy. Many people gave in to emotion like fear of missing out and panic.

 

[BBCWatcher]

Would like to clarify on the VC3A.
I turned 55 in July. From my SA, they moved the FRS amount ($220,400) to RA and the balance was moved to OA. (My MA is already at BHS)

OK, great. You've probably started to notice that 100% of your compulsory CPF contributions now land in your OA.

Obviously you have the option to add funds to your RA if you're looking to reposition cash, so give that some thought. RA earns 4%, and you presumably already have up to S$110,200 of liquidity from RA alone if you merely have a valid property charge in place (or a property pledge you can make). Your RA liquidity remains at S$110,200 after adding funds to your RA. (It'll be less than S$110,200 but still "chunky" if you previously topped up your SA.)

I am still being employed currently. So does it mean that I can do cash top-up as long as the annual limit of $37,740 has not been reached ??

A VC3A must fit within the CPF Annual Limit of S$37,740. But if you have one employer and celebrated your 55th birthday in July, you should've dropped down to a total contribution rate of 34% from July onward. The Ordinary Wage (OW) Ceiling is S$8,000 per month in 2026.

Let's assume you'll earn at or above the OW every month in 2026 and that your variable pay for the year will be (or has been) at least S$6,000 (so you'll hit the Annual Wage Ceiling too). But in this scenario your combined (employer+employee) contribution rate has dropped 3 percentage points for the last 6 months of 2026. Thus you'll end up S$1,440 below the CPF Annual Limit (3% times S$8,000 times 6). And therefore you should be able to make a VC3A of at least S$1,440. You can do that on September 29 (in 5 days), for example, and that money will land in your OA where it will be liquid and start earning OA interest from October 1.

Next year (2027) it'll be different since the government is progressively closing the contribution percentage gap for at least some older workers. Specifically, for everyone age 55+ (but below age 60), there will be a 1.5 percentage point gap in 2027 — 35.5% instead of 37%. So if you have one employer you'll have at least S$1,440 of room below the CPF Annual Limit in 2027. You can make a VC3A on January 30 or 31 (2027) of S$1,440 to start earning OA interest from February 1. Maybe your VC3A can be bigger, but it's safely at least that next year (assuming one employer at a time).

I do aware that such top-up does not entitle me the tax-rebate. But at least it gives an opportunity to top-up OA to benefit from the 2,5% IR, while keeping it liquid as I can withdraw it out as and when I need the money.
Is this understanding correct ?

Yup, exactly. You should have at least S$1,440 you can deposit for 2026 in a 2.5% interest earning liquid account. Maybe more if you're going to miss the CPF Annual Limit by more, but at least that.

If you do this, there's no point in doing this today since you just lose a bit of bank interest and don't get any CPF interest for September. Do it on September 29th or 30th.

 

[ahchan]

OK, great. You've probably started to notice that 100% of your compulsory CPF contributions now land in your OA.

Obviously you have the option to add funds to your RA if you're looking to reposition cash, so give that some thought. RA earns 4%, and you presumably already have up to S$110,200 of liquidity from RA alone if you merely have a valid property charge in place (or a property pledge you can make). Your RA liquidity remains at S$110,200 after adding funds to your RA.

A VC3A must fit within the CPF Annual Limit of $37,740. But if you have one employer and celebrated your 55th birthday in July, you should've dropped down to a total contribution rate of 34% from July onward. The Ordinary Wage (OW) Ceiling is S$8,000 per month in 2026.

Let's assume you'll earn at or above the OW every month in 2026 and that your variable pay for the year will be (or has been) at least S$6,000 (so you'll hit the Annual Wage Ceiling too). But in this scenario your combined (employer+employee) contribution rate has dropped 3 percentage points for the last 6 months of 2026. Thus you'll end up S$1,440 below the CPF Annual Limit (3% times S$8,000 times 6). And therefore you should be able to make a VC3A of at least S$1,440. You can do that on September 29 (in 5 days), for example, and that money will land in your OA where it will be liquid and start earning OA interest from October 1.

Next year (2027) it'll be different since the government is progressively closing the contribution percentage gap for at least some older workers. Specifically, for everyone age 55+ (but below age 60), there will be a 1.5 percentage point gap in 2027 — 35.5% instead of 37%. So if you have one employer you'll have at least S$1,440 of room below the CPF Annual Limit in 2027. You can make a VC3A on January 30 or 31 (2027) of S$1,440 to start earning OA interest from February 1. Maybe your VC3A can be bigger, but it's safely at least that next year (assuming one employer at a time).

Yup, exactly. You should have at least S$1,440 you can deposit for 2026 in a 2.5% interest earning liquid account. Maybe more if you're going to miss the CPF Annual Limit by more, but at least that.

If you do this, there's no point in doing this today since you just lose a bit of bank interest and don't get any CPF interest for September. Do it on September 29th or 30th.

Thank you for the detailed explanation.

 

[reddevil0728]

That's what the link is for.

So which of your link mentions how to invest in s&p500?

 

[jinsatkilife]

why singapore FD rates havn't up ah

 

[ramlee]

fd up no wonder bank stocks also up..

Nooooooooo

these few days local bank share price red red

 

[ramlee]

why singapore FD rates havn't up ah

There are many other factors that determine the FD rates you see

 

[banyan8]

Thanks for sharing.

Would like to clarify on the VC3A.

I turned 55 in July. From my SA, they moved the FRS amount ($220,400) to RA and the balance was moved to OA. (My MA is already at BHS)

I am still being employed currently. So does it mean that I can do cash top-up as long as the annual limit of $37,740 has not been reached ?? I do aware that such top-up does not entitle me the tax-rebate. But at least it gives an opportunity to top-up OA to benefit from the 2,5% IR, while keeping it liquid as I can withdraw it out as and when I need the money.

Is this understanding correct ?

Since u r still employed and ur OA most likely already hits FRS, u can only contribute $3060 VC3A every year.

 

[euro2012]

sg fd around 1.8% per annum rn..

 

[BBCWatcher]

sg fd around 1.8% per annum rn..

Not great when Singapore dollar inflation ran at 2.3% (August 2026 v. August 2025), and fixed deposit rates were even lower over that period. Your Singapore dollars lost real purchasing power (probably roughly 1%) over that period if that's what you did.

Last I checked Singapore dollar inflation has averaged about 2.5% per year since the currency's inception. If you're under that, you're probably losing. If you're at that (CPF OA for example), you're probably holding position.

 

[jinsatkilife]

Not great when Singapore dollar inflation ran at 2.3% (August 2026 v. August 2025), and fixed deposit rates were even lower over that period. Your Singapore dollars lost real purchasing power (probably roughly 1%) over that period if that's what you did.

Last I checked Singapore dollar inflation has averaged about 2.5% per year since the currency's inception. If you're under that, you're probably losing. If you're at that (CPF OA for example), you're probably holding position.

What do you think of buying TLT and selling ATM call 1 year out for 9% yield?

 

[BBCWatcher]

What do you think of buying TLT and selling ATM call 1 year out for 9% yield?

I think that's a completely different proposition. And (for most readers) you've got the wrong fund anyway since TLT happens to be U.S. estate taxable.

 

[jinsatkilife]

I think that's a completely different proposition. And (for most readers) you've got the wrong fund anyway since TLT happens to be U.S. estate taxable.

what has US estate taxable got to do with anything if ur not dead?
if Im dead, I dont care what happens to my money. But thats me

same estate rules apply for US stocks and assets

 

[BBCWatcher]

what has US estate taxable got to do with anything if ur not dead?
if Im dead, I dont care what happens to my money. But thats me

And that's one of the reasons I wrote "for most readers."

same estate rules apply for US stocks and assets

Many, not all. As a notable example, directly held individual U.S. Treasuries (not in U.S. fund form like TLT) are NOT U.S. estate taxable unless held by a U.S. person.

 

[jinsatkilife]

And that's one of the reasons I wrote "for most readers."

Many, not all. As a notable example, directly held individual U.S. Treasuries (not in U.S. fund form like TLT) are NOT U.S. estate taxable unless held by a U.S. person.

Well I don't care about us estate rules.

So I guess holding TLT and selling ATM call 1 year out for 9% is good deal

 

[bruiser69]

Waiting for T bills to go back to 4% again

 

[BBCWatcher]

Well I don't care about us estate rules.

Sure, then you're not "most readers." That's fine.

So I guess holding TLT and selling ATM call 1 year out for 9% is good deal

I don't know. There are (hopefully obviously) risks in what you're describing. Whether assuming those particular risks makes sense is situational.