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1st voluntary contribution to CPF account in 2018.

Tuesday, January 2, 2018

AK has become a bit more IT savvy and he now contributes to his CPF account using internet banking at home.

OK, you are right. 

I admit. 

AK has become even lazier in his retirement and will try not to leave home, if possible.

Bad AK! Bad AK!

How to do it? 

Er... You mean how to contribute to CPF account using internet banking or how to become even lazier?

Who threw a shoe at me?

Who? Who?

See related post #1 at the end of this blog.

Anyway, I just did my first online voluntary contribution to my CPF account in 2018!

This was to my CPF-MA which, of course, earns 4% interest a year.

For those of us who are still gainfully employed and paying income tax, contributions to our own CPF-MA will also enjoy income tax relief.

For people under 55 years of age who have already maxed out their CPF-SA (i.e. hit the Full Retirement Sum) and for people who are 55 or older, no top up to the CPF-SA is allowed.

However, we can still contribute to our CPF-MA if it has yet to hit the Basic Healthcare Sum (BHS).

The BHS is $54,500.00 in 2018.

Contributing to our CPF-MA if it has yet to hit the Basic Healthcare Sum (BHS) is a good way to earn 4% interest a year.

Of course, in the process, this helps us to enjoy "free" H&S insurance too.

See related post #2 at the end of this blog.

Last year, I said doing a contribution to our CPF-MA at the start of the year would get us an $88 "ang bao" from the government.

For those who still have mandatory contributions to their CPF accounts and hit the BHS in 2017, with the higher BHS in 2018, they can make a voluntary contribution of $2,500 to their CPF-MA now.

This means that they will get a $100 "ang bao" from the government!

What about AK?

See for yourself:

My CPF-MA is lower than the BHS for 2017 because there was a deduction made to pay for my H&S insurance plan last year.

Lacking mandatory contributions from being economically inactive means that I would be able to make a bigger voluntary contribution to my CPF-MA.

So, my ang bao from the government is going to be more than $100!

How much more?

You calculate yourself hor.

Happy New Year!

Related post:
1. Online contribution to CPF.

2. Free H&S insurance in Singapore.


MSAPersonalFinance said...

Hi AK71,

What will happen to the earned interest of 4-5% if one has hit BHS?
If the earned interest will flow to OA and SA, then what will be the allocation for each of them assuming the person has not reached FRS in SA and is below 35?

Thanks in advance,

AK71 said...


If your SA has yet to hit the FRS, the interest will flow into your SA.

If your SA has hit the FRS like in my case, the interest will flow into the OA.

foolish chameleon said...

can use OA to transfer to MA to hit the max MA?

AK71 said...

CPFB allows transfer of OA to SA but not to MA.

laurence said...

CPF members who are 55 years old and above are allowed to transfer from OA / SA to own or loved ones' MA (once they have the FRS (or BRS with pledge/charge) in their RA. Recipients must also be 55 years old and above.

AK71 said...

Hi Laurence,

Thanks for sharing this.

At 55 or older, we can withdraw all our CPF-OA savings in excess of the FRS. So, a transfer from the OA to MA is allowed. It is like withdrawing the OA money to contribute to the MA.

cheryl2010 said...

Hi AK,
As CPF calculates interest on monthly basis based on the lowest balance in the CPF acocunt, it is best to perform voluntary contribution in the last week of the month as the money would have earned 1% in savings account like CIMB first. CPF takes 5-7 working days to process but based on experience it takes around 1-2 working days to process. :)

KA_Holding said...

I have been reading your blog and follow your method on transfer from IS to SA and top up MA since 2009.
I believed in CPF system and also top up my children SA as well to enjoy the 5% interest.
Once again, thanks for your sharing.

AK71 said...

Hi Cheryl,

Along the same line, this was a chat I had with a reader recently:

Reader says...
For SA top up, I saw some comments in your post someone said top up in early Jan and some said late Jan? Is there a diff?

It make sense to top up earlier possible in SA right? So to earn the 4% interest as early as possible? Assuming we haven't reach the FRS amount...

Hey its okay now, i found the answer, so late jan will be relatively better since they calculate by calendar mth balance for cash top up.

AK says...
My view is that the difference is micro. Top up a few days earlier or a few days later is OK lah. What is more important is to do it. 😉

AK71 said...

Hi KA,

Sounds like you are taking full advantage of your family's CPF membership.

Good on you. :)

cheryl2010 said...

Yup AK you r right, but i calculated, can save one meal (or can buy around 2.5 turmeric powder?) for every 7k (if put in bank for 1% interest) hehe. Every cent counts!
Anyway thanks to you AK, i also learnt about voluntary contribution for tax relief :)

AK71 said...

Hi Cheryl,

I still try to save money here and there but if the difference is micro, I just close one eye these days. Bad AK! Bad AK!

AK71 said...

Reader says...
I think the portion where the interest income is affected by large transfers due to the timing in the month of transfer or property payment is important.

AK says...
My view is that the difference is micro and over a longer term, we will look back and realise it really is insignificant. :)

Reader says...
I agree with your view. :) It's just that that small detail is interesting. But yes, it's too immaterial.

AK says...
Yes, it is interesting but, for the vast majority of readers, it is also rather insignificant. I would rather readers focus their energy on taking action and not worry about minor details. :)

Unknown said...

Hi AK,

At 55 or older, if you have hit the Basic Retirement Sum with property pledge, will you be able to withdraw everything in the OA&SA?Also, woould it be better to leave it there to gain interest in OA and SA respectively, and only withdraw when needed?

AK71 said...

Hi Clarence,

Yes, at 55, you would be allowed to withdraw anything (from OA and SA) in excess of the BRS with a property pledge.

If you don't have a better place to put the money, it makes sense to leave the money in your CPF till a need arises.

K said...

Hi AK,

E.g. BHS2017 is $52000 and BHS2018 is $54500. Assuming you has $52000 in 1Jan2017. You will end the year with $52000 @ 4% interest = $54080. Since BHS2018 is $54500, you can contribute $54500-52000 = $2500. However, the tax relief is only $54500-$54080 = $420!

Thats my experience!

AK71 said...

Hi K,

Thanks for sharing your experience.

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