If parents are above age 55, should they withdraw money from CPF to pay for housing in order to avoid incurring accrued interest? Instead of using CPF to pay directly.?

Hi Anon,

Accrued interest is just a way for CPF to ensure that Singaporeans have enough saved up for retirement when they sell the property.

If your parents are 55 years old, CPF is effectively a high interest savings account that has daily liquidity for them. If your parents have cash sitting in the bank earning a paltry interest, you should encourage them to do a voluntary refund into CPF and earn the higher interest.

I encourage you to read more in our article here: https://sg.endow.us/2FVvbew​​​

Why do you want to avoid accrued interest? CPF accrued interest is still your own money that can be taken out after age of 55, assuming that your parents have achieved the FRS. This means that accrued interest does not affect your parents at all.

It makes no sense at all to withdraw money from CPF to pay for the housing directly. If you are choosing to pay with cash rather than CPF, then it makes more sense as CPF is still giving annual rates of 4% at least in your parents SA account.​​​