Saturday, February 23, 2008

Keep your money in CPF Special Account

Mr. Tan
I have some money in my CPF Special Account and wish to invest it. Previously I have invested in Company X's Selector II in China for 7 years. After 7 years, I did not make any money compare to 4% interest in CPF.

I would like to hear your advice in investing the special account as my ordinary account is kept for my housing loan.

REPLY

Keep your money in the special account. It pays interest at 4% (plus bonus at 1% on the first $40,000) and is risk free.

You should take risk only for your personal savings or the ordinary account, where the opportunity cost is 1% or 2.5% only.

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