The prevailing interest rate of CPF ordinary and special accounts are 2.5% and 4% respectively. Sometimes in January 2016, I transferred about $61,000 plus from my CPF ordinary to special accounts. As such, I reached the CPF Special Account Ceiling at that point of time.
I did not regret this decision at all. In fact, I am of view that I should have made the transfer earlier. It’s better to be late than never. Since 2000, I have been contemplating the transfer from ordinary to special account. However, I was persuaded not to do so by my friends who advised the impact of such transfer which would cause me to have insufficient CPF ordinary account to pay for the downpayment of HDB flat in the event if I get married. It was only in January 2016 in which I opted to execute the decision of the transfer. I did not inform anyone of this decision as I did not want other to influence my decision at that point of time. Though I noted the significant drop in my ordinary account after the transfer, I am glad to see that my CPF ordinary account balance is higher than the balance of my CPF ordinary balance – before the CPF ordinary to special account transfer in January 2016.
I have no problem using the current CPF balance to pay for the HDB flat. However, it is unlikely that I will utilise the CPF to pay for the HDB flat based on the following reasons.
- CPF saving is meant for retirement and not for other purpose in my prespective.
- I am inclined to rent rather than buy the HDB flat as I do not want to be locked in the HDB flat with the declining lease term. The generated dividend from the investment portfolio will go to great extent in paying the rent on continuous basis for a lifetime.
My two cents worth of view.