Asked 3w ago
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%)
2) able to withdraw the investment any time
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.
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).