Revision 02: May 12, 2024
The CPF OA deduction (for T-bill application, Auction Date: May 9, 2024) happened on May 10, 2024.
That brings our total 6-month T-Bill investment to a total of S$547,000 (with cash and CPF OA).
Revision 01: May 2, 2024
We finally received the 6 months T-bill on the maturity date (April 30th, 2024).
We did CPF refund through internet banking on April 30th and the funds were reflected in our CPF OA account on May 2nd.
How many months of CPF OA interest loss incurred?
For me, the most is 1 month for each investment, either in fix deposit or T-bill. See below illustration on my true case.
Firstly, I placed CPF OA in OCBC Fix Deposit for 8 months, 3.88% p.a., effective date on Feb 15, 2023, and maturity date on Oct 16, 2023. Hence, there was 1-month extra CPF OA interest loss (9 months instead of 8 months, counting from February to October).
Thereafter, I placed the CPF OA funds into 6 months T-bill, 3.95% p.a., which started on Oct 31, 2023, until April 30, 2024. I don't count October CPF OA interest loss here as I have counted October interest loss in my previous Fix Deposit placement. Hence, there was 1-month extra CPF OA interest loss (7 months instead of 6 months, counting from November 2023 to May 2024). I counted May 2024 as one month interest loss because the maturity date was on April 30, 2024, and the funds only back to our CPF OA account on May 2, 2024.
I will apply a fresh new 6-months T-bill in May (expected to be at least 3.70% p.a.), which is on May 14, 2024, to maturity date of Nov 12, 2024. Guess what, there will not be any CPF OA interest loss in this 6-months T-bill (6 months counting from June to November, May interest loss had been counted in the previous 6 months T-bill) so long I return the fund back to CPF OA account before November 30th. I have more than enough time to do that, but I will probably pour the funds back to 6-months T-bill again on November 26, 2024. :)
In my above cases, there are maximum 1-month extra CPF OA interest loss or no CPF OA interest loss at all at each investment (be it fix deposit or 6 months T-bill).
So long 6-months T-bill yield stays above 3.00% p.a., just use CPF OA funds to whack it in full to beat the poor 2.50% p.a. CPF OA interest!
I decided to make my figure looks perfectly nice at half a million dollars, S$500,000 by doing VHR (Voluntary Housing Refund).
Nevertheless, I have two more 6 months T-bills maturing on July 23 and Sep 3, 2024.
Not to mention I also have some funds in the SGX stock market using CPF OA (which is not counted in the table below as the value depends on market performance).
In short, we both had reached S$1.057 million mark on May 2nd, 2024.
Once you break S$500K, your CPF balance will shoot up very fast.
Almost S$100K more every 2 years on each account due to massive compound interest effect.
The message below is from Patrick at "CPF Wealth Tree" Telegram group.
Do take note, for any kind of investment (be it fix deposit or T-bill):
the breakeven yield for OA funds is 2.71% for 1 month loss of interest for 1 year Fix Deposit or 1 year T-bill.
The breakeven yield for OA funds is 2.92% for 2 months loss of interest for 1 year Fix Deposit or 1 year T-bill.
