Anonymous

14 Jun 2019

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4% Is an attractive interest rate. But how does CPF earn this interest rates to pay us?

It was mentioned in SeedlyTV EP06 that the money we put in will earn 4% of interest. Anyone knows how they intend to earn 4% of interest?

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Yixiong Chang

14 Jun 2019

Depends how technical u want the answer to be. =D

In short, CPF monies are 'invested' by the CPF Board (CPFB) by 'buying' Special Singapore Government Securities that are issued and guaranteed by the Singapore Government.

Thus the 4% is guanranteed by the full faith of Singapore government. Which in turn effectively by the tax moneies of the nation. =D So indirectly, tax payers subsidise the high interest rates cPF members get.

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Why don't the CPF simply buy more of the higher yielding government bonds at 4%, instead of buying those yielding 2.5%? And then pass the higher interest rates to us?

For CPF, after age 55, can top-up any amount in SA account to earn the 4% interest rate, eg $50k? And afterwhich can withdraw any amount anytime? Or have to top-up just below age 55?

We used CPF to pay HDB. But after we fully paid using CPF after 25 years loan, we sell the house to buy another, why are we still paying the interest in the loan when the CPF money should belong to us? What do you guys think?

I had been paying my HDB housing loan for the past 3 years. If I do Partial Capital Repayment using CPF, does it benefit me from the loan interest rate and also accrued interest on my Cpf.?

How does CPF determine the minimum baseline interest rate of 2.5% and 4%? Will CPF consider increasing the minimum baseline rates?