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Topping up my CPF Medisave Account. Again?

Monday, October 23, 2023

So, I did a top up to my CPF Medisave Account. 

Wait a minute.

Didn't AK say his CPF MA already hit the Basic Healthcare Sum which means no top up is allowed?

Yes, I did.

However, NTUC Income does a deduction yearly to pay for my private shield plan.

I try to remember to top up my CPF MA whenever this happens.

Still, I would forget sometimes.

The CPF MA pays 4% p.a.

Risk free and volatility free, it is too good to miss.

Don't have to do the top up immediately.

Just have to do the top up a few days before the end of the month since CPF only considers the lowest balance in the month when calculating interest to be paid for the month.

Of course, by doing this, it ensures we earn more interest in the CPF MA. 

And interest earned in the CPF MA will overflow into the SA in the new year for those who have yet to hit the Full Retirement Sum.

The CPF SA also pays 4% p.a.

This will help grow our CPF savings faster.

Oops. I should have said 4.04% p.a.

Huat ah!

I am looking forward to topping up my CPF MA again in the new year if they increase the Basic Healthcare Sum.

This is probably going to be $3,000 or so, if it happens.

Don't look down on 4% or 4.04% p.a.

Even if we have yet to hit the Basic Healthcare Sum, with $50,000 in the CPF MA, we are still getting $2,000 in interest income per year, for example.

That would be enough to pay for most people's  yearly medical insurance policies.

Of course, I first blogged about this in 2013, and I have talked to myself about this from time to time since then.

If AK can do it, so can you!

1. Do you want free medical insurance?
2. Free medical insurance in our old age?


Busybody said...


Q1. Any idea for self-employed who has done max $37,740 Voluntary Contribution (VC3A) for tax savings can still top-up Medisave (MA) along the way when dipped below prevailing Basic Healthcare Sum (BHS)?

Q2. Would you do VC3A if you are still earning an income?

Thank you & have a nice day


AK71 said...

Hi DW,

Top Ups and Voluntary Contributions are two separate categories.

So, Mandatory Contributions + Voluntary Contributions cannot exceed the yearly CPF Contribution Limit.

However, we can do Top-Ups to the CPF-SA up to the prevailing Full Retirement Sum and to the CPF-MA to the Basic Healthcare Sum on top of this.

If we are concerned with getting income tax relief, then, limit Top-Ups to only $8,000 each year as we do not get relief for any Top-Up beyond that amount each year.

I was doing VC3A yearly because my Mandatory Contributions did not hit the limit.

Those were in the years of low interest rates.

You might be interested in reading these blog posts too:

CPF or Singapore Savings Bond? It is a no brainer.

CPF is a national PONZI scheme?

HH said...

AK, T bill 3.95%. Suddenly REITs yield of 6+ % don seem so attractive...

AK71 said...

Hi HH,

Especially when T-bills are risk free and volatility free. ;)

I made a video today on this:
T-bill 3.95% p.a. cut-off yield.

HH said...

Hello AK, yup saw the video. Very happy u still producing them. Is becoming a habit for me to watch your video.

HH said...

Actually, I also factor in a 5% drop in DPU for the REITS I have currently. Just an estimation. Means price must drop even more to compensate for the risk. 😲

AK71 said...

Hi HH,

I will try my best to produce one video a day. :)

As for REITs, if interest rates keep rising quickly, it will be hard for them to keep up.

I have a series of videos on the topic.

I remind myself to be cautious instead of constant buying through DCA or buying at every dip.

It isn't as if we don't have alternatives to REITs. ;p

HH said...

Hi AK, $27 support for UOB was tested today. Assuming dividend of $1.70 a share, dividend yield is about 6.2%. Very tempting

HH said...

Do u factor in for example a 10% drop in dividend just in case when deciding the price to buy? In case recession hits, the payout based on 50% of earnings could be hit.

AK71 said...

Hi HH,

Yeap and I made a video on this in the morning too. ;p

UOB. When am I buying more?

As for your example, your guess is as good as mine.

Anything is possible.

I will just stick to my plan. :)

HH said...

Hello AK, for OCBC, $12 to $12.40 range seems to have quite a fair bit of buying interest. Hopefully it can get to $12 for a nibble :p

AK71 said...

Hi HH,

I think that $12 to $12.40 is a relatively strong band of support for OCBC's share price too. :)

HH said...

Price wise UOB seems weakest now. Yield OCBC more attractive. Hard to decide which one to buy. Haha. If got limited funds

Busybody said...

RE: October 24, 2023 at 8:01 AM


We refer to your enquiry of 25 October 2023.

No, you cannot make any further voluntary contributions to your MediSave if you have made the maximum voluntary contributions of $37,740 in the calendar year. Any voluntary top-ups made in excess of the CPF Annual Limit will be refunded without interest.

Just to share (for self-employed)

Thank you

AK71 said...

Hi Busybody or DW,

VC is restricted by the CPF Annual Contribution Limit.

MC + VC in a year cannot exceed this limit.

We are allowed to do Top Ups to the MA if it has yet to hit the BHS.

Top Ups are different from MC and VC.

Top Up was what I did (as an unemployed.)

AK71 said...

This blog post is probably still useful:

Know how to grow our CPF savings.

Some names got changed but otherwise still good. :)

The Dreamzola Traveller said...

My mother a typical housewife, I have to top up her medisave regularly to maintain her medishield. No private insurance willing to accept her because she has high blood pressure. :(
Should have get one when still healthy......

AK71 said...


This is why I keep telling my mom not to downgrade her shield plan.

You might remember the blog post where I shared how I convinced her to get Incomeshield many years ago.

The annual premium is something I can budget for, not her potential medical bills.

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