Here’s an illustration done by Beansprout to explain this.Īssuming a $20,000 investment into CPF fixed deposit, if you lose two months’ worth of CPF interests, this works out to be $83.33 ($41.66/month) in lost CPF interests. If you invest towards the tail end of a particular month, this could potentially stretch to two months. In other words, I lose the opportunity to earn interest on that additional month. However, for January 2024, CPF would also consider my balance as $20,000 since it takes the lowest balance for the month. My CPF fixed deposit gets credited back to my CPF account in January 2024 so now I have $40,000 again in my CPFOA.
I hold the CPF fixed deposit for a year till early January 2024. So for the month of January, my OA balance is $20,000, and not $40,000. The application goes through a few days later. Let us illustrate this with a hypothetical example.Īssuming I have $40,000 in my OA as of 1 January 2023 and invest $20,000 of my OA savings for a year in CPF fixed deposit. Since CPF monthly interest is calculated based on the lowest balance for that month, this means there is potentially up to two months of interest that could be lost if you were to deposit your OA savings in a fixed deposit. Source: OCBC Additional Monthly CPF Interests That May Be LostĪs explained in this article by my colleague Shashi, investing your OA savings comes with an additional month (or two) lost in terms of CPF interest.
