Which is the more advisable approach? Topping up one’s Special Account first or topping up one’s Medisave Account first? Why? - Seedly
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Asked on 11 Sep 2019

Which is the more advisable approach? Topping up one’s Special Account first or topping up one’s Medisave Account first? Why?

Could you also elaborate on the BHS and FRS limits that I hear about?


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Since they both earn the same 4% interest per annum. Topping up your Medisave account could be the smarter choice.

You can use your Medisave money earlier for paying insurance premiums, paying for delivery costs, or even your parent's medical bills.

Your Special Account can only be accessed after 55. Definitely more rigid.

Also, after you have capped your Medisave (up to the Basic Healthcare Sum - in 2019 this is $57,200), any more contribution to Medisave will overflow into your Special Account anyway. So no problems there. You're doing the same thing, but allowing more flexibility.


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Takingstock @
Takingstock @
Level 6. Master
Updated on 14 Sep 2019

Topping up Medisave gives no tax relief. But if you are concerned about hospital costs n premiums, it could be a good idea. Besides, once Medisave is maxed out vs BHS, any contributions auto-transfer to SA unless your SA is at the level of FRS, it will then flow to OA.

One more thing I learned this year, when your Medisave is say maxed out at BHS, and you already have RA account, the interest on Medisave flows to OA. If you have set aside enough, the OA, in this case, becomes like a bank account that always pays 2.5% deposit... Better than SSB and CIMB account!! Just withdraw when you like from OA but I don't think can put back in again.

Topping up SA with cash gives up to 7k tax relief for retirement sum top-up. So you pay lesser taxes the following year.

If I decide, I would rather go with RSTU to SA and get the tax relief. The reduction in taxes would be used to fund some bill at home or give angpow within the family.

BHS is currently 57200 for 2019 and increases by about 3500 each year until you turn 55, and that amount is fixed as the BHS limit for the rest of your life.

FRS I believe is 178000 this year, and increases by about 7000 per year. Once your SA reaches FRS, you won't be able to do RSTU anymore, but I believe contributions from employment will not be rejected. I don't think the FRS amount can be fixed.

I recall in my conversations at CPF when your Retirement account is opened, then the RA cap is fixed based on when you elect to start the CPF payout.

I might be wrong here, but I think payout for my father will auto start when he turns 70 in 3 years. So the FRS for him should be capped at 178000 + 7000x 3. That's how I am interpreting at the moment.


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Takingstock @
Takingstock @

14 Sep 2019

Hmmm you are right, I was thinking along my own situation didnt pay attention to it. But there's one part I dont quite get and therefore didnt recommend. I think its the sub part that you may claim relief only if you have contributed voluntary top up last year. Its a bit hard for me to say sure can claim.

14 Sep 2019

It is auto claim same like special, u no need do anything

I am going to offer a different perspective over here.

(1) Topping into SA account first to hit FRS faster. This is because when you do VC3A (voluntary contribution to 3 accounts), BHS would overflow to SA and OA, while if you have FRS, SA stays in SA to compound.

But it really depends on whether there is any tax relief incentive to deploy your funds.

BHS is the basic healthcare sum that increaes yearly. For this year, it increased by 5%.

FRS is the Full Retirement Sum that increases about $5,000 for the current released figures. But to be careful, i would estimate slightly higher. Any additional will be bonus to me if i can withdraw.


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