Top up CPF SA with cash directly, or do voluntary housing refund to OA?
Not sure if anyone has thought about this before, and wld like to seek advice:
i withdrew $180k from OA to fund my flat purchase. this amt incurs a 2.5% interest rate each year as long as i don’t pay it back.
on the other hand, we can only contribute up to $8000 to our CPF SA via cash per year to get a tax rebate.
assuming im able to contribute $8000 cash to cpf yearly, it be more worthwhile to (a) transfer to OA (early housing loan refund), then to SA or (b) pay directly to SA? tks!
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Personally, i will not be too concerned over that 2.5% accrued interest, and this interest amount is ultimately my own money, which i can use for my next housing purchase after i sold my current one, or withdraw out if im turning age 55. Doing RSTU to SA to get the tax relief is definitely a better choice for me, as comparing to doing a housing refund to my OA.
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Elijah Lee
18 Mar 2022
Senior Financial Services Manager at Phillip Securities (Jurong East)
Hi Finance Noob,
This really depends on your personal circumstances, my view is, if you are lean...
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Just to share that funds top up to SA via the RSTU route, you cant withdraw even at age 55, they will be locked up in the retirement account, whereas for OA, you can use to buy your next property and withdraw when you hit the brs/frs/ers at age 55. Suggest if you have spare cash, to use the cash to pay down the loan, but given interest rate will rise gradually, just repay batch by batch, dont need to repay all at one time.