Comments on: CPF – F1 or F9 : Credit extension, mortgages and ordinary/special accounts http://theonlinecitizen.com/2007/07/cpf-f1-or-f9-credit-extension-mortgages-and-ordinaryspecial-accounts/ a community of Singaporeans Sun, 21 Mar 2010 05:11:14 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: shoestring http://theonlinecitizen.com/2007/07/cpf-f1-or-f9-credit-extension-mortgages-and-ordinaryspecial-accounts/comment-page-1/#comment-1363 shoestring Wed, 25 Jul 2007 07:38:46 +0000 http://theonlinecitizen.com/2007/07/25/cpf-f1-or-f9-credit-extension-mortgages-and-ordinaryspecial-accounts/#comment-1363 One of the reasons for the higher 4% interest rate for the SA might be to encourage us to transfer funds from OA to SA to ensure we have more funds for retirement. I know of some who invest in stocks instead of transferring OA funds to SA, before purchasing their flats. That way, they may make more than the 4% from SA and still have the flexibility to use the funds as needed. Of course there is a downside risk in addition to servicing interest from a loan. On a minor note, their are HDB buyers who do not have to borrow - they have more than sufficient funds in their OA to pay in full for their purchase. In their case, they do not have to worry about loans and interest payments. So,they can afford to take more risks and avoid locking their money up in SA with a fixed 4% return. They may be a very small group though. One of the reasons for the higher 4% interest rate for the SA might be to encourage us to transfer funds from OA to SA to ensure we have more funds for retirement.

I know of some who invest in stocks instead of transferring OA funds to SA, before purchasing their flats. That way, they may make more than the 4% from SA and still have the flexibility to use the funds as needed. Of course there is a downside risk in addition to servicing interest from a loan.

On a minor note, their are HDB buyers who do not have to borrow – they have more than sufficient funds in their OA to pay in full for their purchase. In their case, they do not have to worry about loans and interest payments. So,they can afford to take more risks and avoid locking their money up in SA with a fixed 4% return. They may be a very small group though.

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