How is 4% interest calculated for your SA account? - Seedly
 

CPF

Asked by Christopher Tan

Asked on 19 Nov 2019

How is 4% interest calculated for your SA account?

At the beginning or at the end of the year? What is the best period in the physical year to transfer your OA to SA?

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Hi Christopher,

CPF interest is computed monthly off your month end balance, and then credited to your respective accounts and compounded annually. Your interest for 2019 will be reflected on 2020. The best time to transfer OA to SA with the intention of maximizing interest would be right at the beginning of the year to maximize the interest for a full year.

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Hi Christopher,

the interest for SA is calculated as such:

4% * Sum of balances at the start of each month / 12

So the best timing for you to do the transfer OA to SA would be right at the beginning of the year to maximize the interest for a full year.

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Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 9. God of Wisdom
Answered on 20 Nov 2019

Some say start of year is best, there is another camp that will say just before Christmas, at the very end of the year.

But since CPF interest is compounding for many many years, it really doesnt matter much which exact month is the best.

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William
Level 4. Prodigy
Answered on 20 Nov 2019

At the begining of the year after interest has been credited.

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Interest for the year = Rate% * {{ Sum of minimum balance of each month }} / 12

It is payable at the start of the subsequent year

No particular "best time" to move from OA to SA as the balances (after moving) will be picked up on the next relevant monthly interest calculation.

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Michelle
Level 4. Prodigy
Answered on 19 Nov 2019

Start of the year due to compound interest

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