Back in June 26, I have written a post on using of CPF savings to do some investments so as to beat the CPF interest rates of 2.5% p.a. (based on the interest rates of CPF Ordinary Account) or even better if the returns can beat the CPF Special Account interest rates of 4.0% p.a.
Did my own research and being pure lazy, I applied for a CPF Investment Account with OCBC since they had allowed me to apply for the account via internet banking and within a day or two, the account has already been set up. Well, right now, I am kind of regretting for the laziness as I would have been better off if I had applied the CPF Investment Account with UOB will be better. Not because of the lower transaction/service charges but because my savings meant to be used for investments are all kept with my savings account in UOB. Thus, it would definitely be easier if I were to keep the CPF Investment Account with them too. Well, have checked with UOB and if I were to make the transfer of account from OCBC to UOB, it will take me 14 working days for the account to be transferred. Guess that means I will have to stick to the current arrangements.
Anyways, there it is very likely that there is no need for me to do anything with the CPF Investment Account apart from making transfer of any dividends/distributions from the stocks that I buy using my CPF savings back to my CPF-OA at the end of each month. However, even if I do not do that diligently, OCBC would transfer any cash balance from my CPF Investment Account to my CPF-OA if there are no transactions for 2 consecutive months.
I intend to invest S$40,000 of my CPF savings with a target dividend/distribution yield for investments using my CPF savings is at least 5% p.a. and that will mean the effective yield that I need to attain, for up to five counters, is at least 5.1%. There is no point on taking a risk in investing if the target yield is not at least 2 times of the CPF-OA interest rates. With the quarterly service charge of S$2 per counter, every year, the service charge will chalk up to S$40 for 5 counters.
The intention of using my CPF savings to do investments is to size up my CPF savings. When any of the counters that I have bought hits 25% in capital gains, I will look into selling it and look for other opportunities.