By MoneyBees
Whether a T-bill bought with CPF OA savings beats 2.5% in the OA, after agent bank charges and the months of OA interest lost, with the cut-off needed to break even.
Yes, under the CPF Investment Scheme, through your agent bank: DBS/POSB, OCBC or UOB. You need a CPF Investment Account and more than S$20,000 in your OA, as only the amount above S$20,000 can be invested.
Only when the bill is allotted. CPF takes the price, which is below face value, and moves it to your CPF Investment Account.
A withdrawal earns no interest from the month it happens, and money returned earns from the month after. So a 6-month bill usually costs about 8 months of OA interest at 2.5%, more if you leave the money in your Investment Account.
The face value goes to your CPF Investment Account within a week. If you do not reinvest it, CPF returns it to your OA at the end of the second month, and you can lose up to two months of interest. You can ask your bank to return it sooner.
CPF estimates up to S$2.50 per transaction and S$2 per counter per quarter at the agent bank, plus GST. Check your own bank's charges.
No. Extra interest counts at most S$20,000 from your OA, and that S$20,000 cannot be invested, so it keeps earning the extra 1%.
For a S$10,000 6-month bill returned to the OA at once, about 3.5%. You give up about 8 months of OA interest at 2.5% for 6 months of T-bill return, and pay the bank's charges on top.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).