{"id":6378,"date":"2024-02-17T16:24:00","date_gmt":"2024-02-17T16:24:00","guid":{"rendered":"http:\/\/www.investollo.com\/?p=6378"},"modified":"2024-03-07T03:55:07","modified_gmt":"2024-03-07T03:55:07","slug":"treating-cpf-special-account-retirement-account-bond-investment","status":"publish","type":"post","link":"https:\/\/www.areyouready.sg\/treating-cpf-special-account-retirement-account-bond-investment\/","title":{"rendered":"Treating your CPF Special Account and Retirement Account as a Bond Investment 2024"},"content":{"rendered":"\n
Most Singaporeans consider their money in CPF as untouchable for any purpose other than for paying their housing loan, student loan or medical bills (More on CPF Schemes here). There is one more way to view your CPF money, particularly the money in your Special Account (SA) and Retirement Account (RA). You can view them as part of your investment portfolio \u2013 particularly as part of your bond investments<\/a>.<\/span><\/p>\n\n\n\n SA and RA share several similar characteristics of a bond.<\/span><\/p>\n\n\n\n SA and RA are actually better than a bond in several ways to<\/span><\/p>\n\n\n\n Of course, there are no free lunches in this world. A higher interest-paying and safer investment definitely come with a drawback: <\/span>You cannot rebalance or withdraw the money before the age of 55*.<\/b><\/p>\n\n\n\nSpecial Account & Retirement Account as a Bond<\/b><\/h2>\n\n\n\n
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<\/span>Your money and interest in CPF are guaranteed by the Singapore Government, which is AAA credit-rated. <\/span>
<\/span>There are only a few AAA credit-rated countries left in the world today.<\/span><\/li>\n\n\n\n
<\/span>SA & RA pays interest to you annually while a bond payment period varies.<\/span><\/li>\n\n\n\n
<\/span>You can consider SA & RA as a 40-year maturity bond. <\/span>
<\/span>There are rarely any bonds that have such long maturity.<\/span><\/li>\n<\/ol>\n\n\n\n\n
<\/span>A normal AAA bond currently pays less than 2% in interest on average. <\/span>
<\/span>Your SA & RA pays you a minimum 4% interest (excluding the extra 1% on your first $40,000).<\/span><\/li>\n\n\n\n
<\/span>Interest payments are fully backed by the Singapore Government, one of the few remaining AAA credit-rated countries left in the world.<\/span><\/li>\n\n\n\n
<\/span>You do not need to fret over what else to invest or where to find a higher-paying bond or investment.<\/span>
<\/span>Your returns are automatically reinvested back into the 4%-paying bond.<\/span><\/li>\n<\/ol>\n\n\n\n