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Anonymous

06 Feb 2021

CPF

If my parents want to top up into CPF purely for interest rates, which account should they top up?

If my parents (age 59) want to top up into CPF purely for interest rates (not income tax relief), which account should they top up?

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Elijah Lee

06 Feb 2021

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

Unfortunately if your parents want flexibility to withdraw then they have to do 3 account contributions. Topping up to RA is one way.

The money will be split amongst OA/SA/MA. Having said that, if their MA is at the BHS already, then the excess will spill over to OA/SA which can be taken out any time.

Note the CPF annual limit of $37740/yr which the maximum they can contribute. Also note that with this method, there will always be some money going to OA. If they have a high SA balance, then when withdrawing, the money in OA is 'stuck' as SA monies need to be withdrawn first.

Pang Zhe Liang

05 Feb 2021

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

You may top up to your parents' retirement account where the monies can earn up to 6% per annum in interest.

More Details: https://www.cpf.gov.sg/members/FAQ/schemes/reti...

I share quality content on estate planning and financial planning here.

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