facebookAs a fresh grad, does topping up the savings allocated to CPF OA for risk free returns make sense if I intend to buy a resale flat with my SO within the next 3 years? - Seedly

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Lin Jiachao

Lin Jiachao

Level 5·Computer Engineering at NUS

30 Jul 2021

Property

As a fresh grad, does topping up the savings allocated to CPF OA for risk free returns make sense if I intend to buy a resale flat with my SO within the next 3 years?

Thinking about putting the current savings allocated for future housing into CPF, since it pays more than the bank interest rate and is risk free, plus saving a small amount on income tax.

Just wondering if there are any major problems/opportunities that I might have missed out.

Discussion (4)

What are your thoughts?

Oliver Siah

Oliver Siah

02 Aug 2021

Level 4·Co-Founder at Fraxtor

Its better to have some free cash on hand for renovations and buying furnitures.

Elijah Lee

Elijah Lee

31 Jul 2021

Level 18·Independent Financial Advisor at Phillip Securities (Jurong East)

Hi Jiachao,

(I presume you are working at a regular job I.e. you are not self employed)

You can't top up CPF OA directly, only via 3-account Voluntary contributions, and even so, some monies will end up in MA and SA.

You don't get income tax relief on 3 account contributions either. Only contributions to MA or to SA (via RSTU) will confer tax reliefs.

So topping up your OA might not be a good move in view of your requirements.

Also, do keep some cash on the side. Buying a resale flat comes with various types of costs, some of which cannot be paid by CPF OA monies.

View 1 replies

Yes. Because you cannot only top up your OA. Volunteer top up only can be done for SA, MA or all 3 a...

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