Should we invest CPF OA or SA account monies?

Hey Anon,

I agree with you that the 4% interest for SA is indeed hard to beat considering the level of risk involve (its like a risk-free interest rate).

If I were to invest the monies I will be likely looking for ETFs. The problem with that is that there isn't good ETFs (or even roboadvisors) available that has low enough management fees like those offered by Vanguard/iShares/Invesco (we are talking 0.04-0.2%) on the open market. I will suspect that most of the returns will go to the fund managers than yourself while you shoulder the risk in the form of later retirement.

If you are wondering what is the effect of transferring the balances from OA to SA, I've done an comparison here at https://geek.sg/blog/how-much-do-you-actually-m...

Great question. We intentionally did not provide investment options for SA on the Endowus platform, because we find that it is very difficult to beat the guaranteed 4% returns (risk-free!) based on the investment options available. We are looking at some options for balanced funds that have done relatively well and better than the 4% over long periods of time and may introduce the service at a later date, but we would not invest all your SA into financial markets.

For CPF OA, you have a much lower hurdle, and the interest rate of 2.5% is barely above your inflation. It is the perfect type of money that you should invest in financial markets for the long term to achieve risk returns and compound for the long term. Until Endowus arrived, the cost of investing your OA was exorbitant at anything from 3~4% and much higher in the past. However, we have worked to lower cost (all-in) to below 1% giving you a much higher chance of success as cost is one of the most important factors in your investment success. Endowus has also brought in 2 low-cost Vanguard passive index funds into CPF-IS as part of our global equities portfolio so that you have a better chance of investment success and these are exclusively available only to Endowus clients. So you need to invest your OA to prepare for your financial future.