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Tuesday, November 20, 2007

CPF provides a good return

Hi, Mr Tan,

I have been reading your blog. Thanks for your time in sharing with all the readers your views & observations.

I have a question regards to CPF. I had made a CPF transfer from OA to SA this year. My money in the CPF exceed the $40k that qualifies for 1% extra.

I am thinking of taking out the excess in the SA to invest in NTUC Prime fund as it has one of the lowest cost. Do you think that is a good choice ? Or should I diversify to others ?

REPLY:

In my personal view, it is better to keep in the special account as it pays 4% interest and is free of risk.

The return from the Prime Fund is uncertain. As the stockmarket is now at a high level, and there is still much uncertainty in the global economy, it is better to keep your money in risk free investment for the time being.

You can review the situation next year.

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