Money has been pouring into CPF accounts via top-ups in 2022 as members searched for a better return on their cash although attractive interest rates on non-CPF financial products may be eating away at that strategy.
The CPF Board said in October that CPF voluntary top-ups reached 3.5 billion for the first three quarters of 2022, 84 million higher than the amount received for the same period in 2021.
At the same time, rising interest rates have been making other financial products such as fixed deposits and Treasury bills T-bills) relatively more attractive than topups.
CPF interest rates for the Ordinary Account OA) are at 2.5 per cent a year and 4 per cent for the Special Account SA). CPF pays an extra 1 per cent a year interest on the first 60,000 of your combined balances, which is capped at 20,000 for the OA.
CPF members who reach 55 years old will also get 1 per cent more for the first 30,000 of their CPF balances.
These are attractive rates but are still lower than some fixed deposit rates which have been on the rise. Promotions range from UOB’s 3.55 per cent for sums below 50,000 to as much as 4.1 per cent per year for two years for amounts over 20,000 at RHB.
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