OCBC Has Up To 3.88% Interest Rate For CPF OA Funds, Offers Option To Grow Returns

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OCBC Bank Offers Promotional 3.88% Interest Rate On CPF OA Funds For 8 Months

From Wednesday (8 Feb), OCBC Bank is offering Singaporeans a promotional 3.88% interest rate a year on their Central Provident Fund (CPF) Ordinary Account (OA) savings.

This offer is open to any CPF members, including those who currently do not bank at OCBC.

3.88% CPF interest rate with placement of S$20,000 at OCBC

According to The Straits Times (ST), as long as customers have a minimum of S$20,000 in an OCBC bank account for eight months from Wednesday (8 Feb), they can get a promotional rate of 3.88% a year.

Source: OCBC

This offer can be taken up at any OCBC branch, including members without an OCBC account.

The fixed deposit offer is on par with the latest six-month Treasury bills (T-bills), which gave a cut-off yield of 3.88%.

OCBC’s 3.4% offer to CPF members who put their OA savings with them for 12 months still stands.

Investing in T-bills using CPF funds

Currently, the CPF OA rate remains at the legislated minimum of 2.5%.

In Parliament on Tuesday (7 Feb), Manpower Minister Dr Tan See Leng was asked if there were plans to incentivise CPF members with high OA savings to use alternative options for higher interests.

Source: MCI Singapore on YouTube

He responded that such members could put their CPF funds into short-term Singapore Government Securities (SGS) products, such as T-bills.

OCBC and UOB customers will also be able to use CPF savings to apply for T-bills online by Q1 of 2023.

Speaking to ST, OCBC said customers would be able to use their mobile apps or Internet banking accounts to invest their OA and Special Account (SA) funds in T-bills from March.

DBS was the first bank to allow customers to invest their CPF OA savings in T-bills in late January.

In the latest T-bill auction on 2 Feb, DBS shared that nine in 10 applications were made online using CPF funds, and they’re looking at extending the service to SA funds.

Customers will also soon be allowed to apply on their mobile applications.

Prior to these changes, customers who wanted to use CPF funds to buy T-bills had to do so in person, causing long lines at banks. This led to calls to allow CPF members to submit T-bill applications online.

CPF OA savings can be transferred to SA or RA

Dr Tan said the CPF Investment Scheme is an alternative to SGS products like T-bills, offering various investment products with varying risk profiles.

Besides that, CPF members can also choose to transfer OA savings to their SA or Retirement Account (RA), as this will yield higher risk-free interest of up to 6% a year.

If members are below 55, they can transfer up to the prevailing Full Retirement Sum of S$198,800 to their SA.

Those above 55 can transfer up to the prevailing Enhanced Retirement Sum of $298,200 to their RA.

For more information, you can refer to CPF’s website here.

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Featured images adapted from Asian Business Review.

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