What kind of CPF OA investment recommendations do you have? - Seedly
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Anonymous

Asked 3w ago

What kind of CPF OA investment recommendations do you have?

Any recommendations what I can do with my money in CPF OA with the following considerations:

1) returns > current Rate 2.5%pa ( ideally 4%)

and

2) able to withdraw the investment any time

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Hi anon,

Plenty of options available, but you must be willing to put up with volatility and potential loss of capital. The asset classes that can potentially provide you with 2.5% are stocks, UTs and ETFs. They also happen to be liquid and you can withdraw any time, subject to waiting a bit for your funds to be credited back to you.

However, which holding you buy is entirely up to you. You'll need to open a CPF OA investment account with the bank first before you can invest your OA monies, and it's recommended to do so through a CPF Investment Scheme Registered Investment Administrator (iFAST, Navigator, Phillip, UOB Kay Hian) as the charges will be lower this way.

However I will caution that any money needed in the next 3 years (e.g. for a house) should not be invested, rather, you should just leave it in CPF OA as it is risk free and volatility free.

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For my case, I put to Unit Trusts under AIA, but you have to be prepared to absorb investment losses (up to 20% on top of CPF OA interest of 2.5% left out when used the CPF-OA sum for investments).

If you are okay with the first disclaimer, then by all means proceed to open CPF-IS account with either OCBC Securities (I used this), or any other alternatives available.

If you just need a risk-free way to earn interest sum for the next 3 to 5 years (for example), stick to CPF Ordinary Account (3.5% pa for first $20,000, 2.5% pa thereafter).

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