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Voluntary contributions to CPF in January 2020.

Thursday, January 9, 2020

Remember the blog I published two years ago in January 2018?

Which blog?

This blog:

8 years AAA bond with 2.5% and 4% coupon!

I was referring to a AAA rated sovereign bond.

Know where to find such a bond?




Regular readers will know that I was talking about the CPF, of course.

Guess what?

This "bond" is even more attractive to me now!


It is more attractive to me now because the tenor has shortened by 2 years and the coupons are still 2.5% and 4%!

Get the same coupons from the same bond but for a shorter tenor?

What an attractive deal!

You know what people say about Singaporeans loving to queue for deals?

Willing to join long queues to spend money on things like stuffed toys (think Hello Kitty) or mobile phones (think Huawei Y6 Pro)?


These people are crazy!

Overnight queue for BTS Singapore concert merchandise?


So, is AK saying we should queue to do voluntary contributions to our CPF instead?

Alamak, you don't know?

We don't even have to queue!

Just do everything online!

Amazing or what?

OK, I know.

I say you crazy.

You say I crazy.

Now, why not ask if you would rather be 

crazy and poor 

or would you rather be 

crazy and rich?

Do online contribution to CPF?



You don't know why it is a more attractive deal for me now?

Basically, the closer we are to 55 years old, the more attractive the "coupons" become as the waiting time is shorter.

Chop, chop!


Yes, I have made voluntary contributions (VC) to my CPF accounts (OA, SA and MA) this month.

The CPF Annual Limit for 2020 remains at:


So, a $2,800 VC to my MA.

Then, a $34,940 VC to my OA and SA.

Yes, AK bought a 

"6 years AAA rated sovereign bond with coupons of 2.5% and 4%" 

this month!

Why make maximum VC this month?

The idea is pretty simple to the economically inactive AK.

Hit the CPF annual contribution limit in January each year to get the most interest income possible.

Remind myself again to think of it as having bought AAA investment grade sovereign bonds that pay 2.5% (OA) and 4% (SA and MA) coupons!

"Spend less than you make; always be saving something.

"Put it into a tax-deferred account.

"Over time, it will begin to amount to something.

"This is such a no-brainer."

- Charlie Munger

I plan to keep doing what I have been doing with my CPF because I want it to "amount to something" by the time I am 55.

I know some readers want me to show my CPF numbers.


Look out for an upcoming blog on what my CPF savings has amounted to so far.

This will happen probably before the end of this month.

Yes, soon, it will be time to see our pies. ;)

If you are absolutely clueless, please read the blog I hyperlinked at the intro of this blog for a more detailed reasoning as I do not want to repeat myself (too often) lah.

Related posts:
1. How to grow our CPF savings!
2. 4 ways to boost our CPF savings.
3. VC to CPF-MA in 2020.


Turtle_Investor said...

Wah you fast hand fast leg sia, I am waiting to pump in 7k SA + 2,8k MA before month end. Make me itchy whether to do it now! You are indeed my CPF Shifu.

I am hitting 2020 FRS in Sep and this is my final 7k RSTU to SA. Abit sad cannot get tax relief from next year onward but very happy to hit the FRS milestone.

Without your guidance and inspiration a few years back, this wouldn't happen at all. I had spoken to you over FB messenger before and in case you managed to guess who I am, please don't reveal my identity! Same as you I prefer to be anonymous.

You ear mask, I hide in Turtle shell.

If AK can do it, so can me Old Turtle!

AK71 said...

Hi Turtle Investor,

I am a lazy fellow and would drag my feet on many things.

However, when it comes to something "bao jiak" like the CPF, "mai tu liao"!

Mao Shan Wang can wait.

Not CPF. ;)


What Shifu?

I am nobody's Shifu lah. ;p

Just talking to myself in a little corner of cyberspace here in ASSI.

Of course, if that has helped anyone, I am happy. ;)

For sure, if AK can do it, so can you!

Gong xi gong xi on your CPF milestone! :D

(Simi identity? Wink, wink.)

AK71 said...

Some readers might be interested in this blog:

Why lazy people "want" to continue working?

路奔 said...

Did you do it using Paynow instantly on Jan 1st? If so, can we assume interest is calculated based on end of day balance of jan 1st? Just curious. :)

foolish chameleon said...

AK, you already hit the ERS, your VC will go all to OA right?

Your Ka-ki! said...

Thank you for reminder.

Turtle_Investor said...


If you dont mind, I will add your blog to my newly minted blog under the bloglist. I just figured out how to add it. LOL, really an IT idiot.

Thanks in advance.

SGDividends said...

Hi Turtle investor,

If you will be hitting your FRS in Sept 2020, wouldnt your 7k VC to SA in 2020 be refunded without interest , since one is not allowed to exceeed FRS in the calendar year?

Or am i wrong?

Henry said...

Hi AK, I thought when you hit the FRS, you cannot top up into SA anymore? I tried it two years ago and was rejected. I blur.

HELLO said...

Thanks for the inspiring post!

As I am still in full-time employment, last year I did VC into my MA to reach the latest BHS, but the sum was refunded to me over the next few months by CPF. Do you know if ppl in full-time employment can use your hack for MA top-up??

Thanks and do keep blogging!!

AK71 said...

Hi 路奔,

Best to get the answer from the horse's mouth. ;p

How is my CPF interest computed and credited into my accounts?

CPF interest is computed monthly.
It is then credited to your respective accounts and compounded annually.
CPF interest earned in 2019 will be credited to members’ CPF accounts by the end of 1 January 2020.

CPF Board.

AK71 said...

Hi foolish chameleon,

CPF-SA can continue to grow after hitting FRS.

It can continue to grow even after hitting ERS. ;)

No top ups nor transfers from OA to SA is allowed but mandatory and voluntary contributions are still allowed.

Interest earned by the SA will also stay in the SA. :)

CPF-SA is not a free lunch but it is not a myth.

AK71 said...


I am glad you like it. :)

AK71 said...

Hi Turtle Investor,

I have added your blog to my list of resources too.

You will find the list in the left sidebar under the heading "RESOURCES" towards the end of the page

Thank you. :)

AK71 said...

Hi SGDividends,

You are referring to a $7K Top Up to the CPF-SA.

Formerly known as MSTU.

Now, it is known as RSTU.

That is not the same as Voluntary Contribution which is what I am doing.

Know how to grow our CPF savings.

AK71 said...

Hi Henry,

There is a difference between Top Ups and Voluntary Contributions.

See my replies to foolish chameleon and SGDividends above.

Also, follow the links I provided in those replies for a more detailed explanation.

Hope you won't be blur anymore after reading all that. :)

AK71 said...


I suspect you are a high flyer and very well compensated. ;)

If your mandatory contributions (i.e. contributions from employment) for the year hit the CPF Annual Contribution Limit, then, all voluntary contributions you make that year will be refunded to you without interest.

That was probably what happened in your case. :)

Siew Mun said...


Slight nuance.

A: CPF interest is computed monthly.

It is then credited to your respective accounts and compounded annually.

SM: CPF interest is computed based on the lowest balance for the month. Hence your deposit in Jan will be calculated as interest in Feb.

AK71 said...

Hi Siew Mun,

That is an interesting nugget of information.

So, it doesn't matter when in the month of January we make the voluntary contribution.

If I were to be picky, I should contribute later in January instead of earlier so as not to lose a few weeks' worth of interest income from my bank account. ;p

AK71 said...

Some readers might be interested in a blog like this:

The CPF is really a national PONZI scheme!

Unknown said...

Dear AK,

Are you still vested in Kingsmen?

Siew Mun said...

AK, it's more interesting for CPF SQ shield especially when you are moving $220k+ out of SA and back into CPF SA at 55. One month of interest for $220k in SA can amount to $733. :p

Your Ka-ki! said...

ah then i will only do it at the end of Jan month.

Another tiny details that save a few dollars of interest for me.

foolish chameleon said...

"CPF-SA can continue to grow after hitting FRS.

It can continue to grow even after hitting ERS. ;)

No top ups nor transfers from OA to SA is allowed but mandatory and voluntary contributions are still allowed.

Interest earned by the SA will also stay in the SA. :)"

hi AK,
i was refering to the 7k top up to SA.
if hit FRS, we cannot top up any more to SA ?

AK71 said...

Hi Unknown,

Kingsmen remains a small investment in my portfolio.

Kingsmen Creatives added to my portfolio.

AK71 said...

Hi Siew Mun,

I don't know why the loophole has not been plugged.

55 is another 6 years away for me.

Let's see what happens by then.

Crossing fingers. ;)

AK71 said...


If you have mandatory contributions to CPF, you might want to take note that waiting till end of January, you probably would not be able to contribute the maximum sum of $2,800 to your CPF-MA to hit the new BHS of $60,000 for 2020.

This is because your mandatory contribution would have filled some of that space before then.

This is a pertinent consideration if your CPF-MA already has the 2019 BHS of $58,200 at the beginning of 2020.

On top of the higher interest of 4% to be earned from CPF-MA, there is also income tax relief for the employed which makes voluntary contribution to CPF-MA doubly attractive.

AK71 said...

Hi foolish chameleon,

As I mentioned in my earlier reply, no top ups is allowed after hitting FRS.

So, no, you cannot top up the FRS in this case. :(

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