I did my first Investment with my CPF Ordinary Account

Yes, I finally opened up a CPF Investment Account (CPFIA) for my OA with DBS and the first Investment I did with my CPF OA is the Oct 1 year T bill as mentioned in my previous post.

I didn’t go for ETFs like S&P 500 using Endows because I may need the money in my OA for my housing loan in around 3 years' time when my fixed interest rate mortgage term is up.

If the bank's mortgage rate is higher than the CPF OA interest at that point, I will have the choice to repay the loan using my CPF OA and lowering the monthly payment.

Considering the short term need for my OA money, I went for a low risk instrument like Government T-bills to boost my OA interest. I am hoping that this Oct issue will have a yield of 3.2% or more to make all these effort worthwhile.

Setting up my CPFIA was pretty straight forward. I did it all online with DBS using their Digibot. The whole application process took less than 10 mins. The approval took a few working days and they sent me a letter to confirm the successful opening of the account as well as the CPFIA account number.

The more troublesome part is the T-bill application. To do that, it has to be in person at the bank. I queued up at a DBS branch for around an hour just so that I can fill up the paper application form…. Yes paper form in this day and age…. for the Oct 1 year T-bill.

There are 3 things you need to know/have when you go for the application. It was my first time and the staff there was kind and patient enough to guide me along.

First, you need to know the investible amount you have in your OA. To check that, you can log on to CPF and under investment you will be able to see your investible amount from your OA and SA.

You will see that the amount for professionally managed product, stocks and gold are different. You should be able to invest all of your OA less $20,000 in professionally managed product which includes T-bills and Singapore government bonds.

You have to make sure the amount of T-bill you want to purchase is within your investible amount in professionally managed product. If not, the transaction will fail and you will pay for the transaction fee for nothing.

Next, you will need to know which issue code of the T-bills you want to purchase. You can easily find that in MAS website for T-bills.

Lastly you will need to have a hard or soft copy of the completion of the CPF Investment Scheme Self-Awareness Questionnaire (SAQ). You can go to CPF SAQ site to go through the Modules and take the quiz. After you have completed that, there should be an acknowledgment screen as a proof of your completion and you can take a screen shot or download the pdf of that. You can then print it out or email them when you are there.

With all these, the application process should go smooth. Finally do take note that after the maturity of the T-bills, the money will go to your CPFIA NOT your CPF OA. You will need to manually transfer the money from your CPFIA back to your CPF OA via internet banking. Set a reminder for that so you won't forget and missed out on the CPF OA interest.

[Updates on 13 Oct 2022: With regards to the withdrawal of funds from OA, it is different from cash. For cash, the funds will be withdrawn from your bank account Before the auction date and the interest will be refunded upon allocation. For CPF, they will only withdraw the money from your CPF OA less interest upon allocation. Hence withdrawal of funds from your OA will happen a few days After the auction date and not before.]

[Updates on 14 Oct 2022: the money less interest had been deducted from my CPF OA 1 day after the Auction date]

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