3.16% p.a. SSB, T-bills, CPF, fixed deposits! My plan!

I have been doing yearly voluntary contributions (VC) to my CPF account even though I retired from work 8 years ago.

I simply took some of the passive income I got from my investments and maxed out the yearly VC.

However, I did not do VC this year and I won’t be doing VC next year either although the original plan was to do this until I hit 55 years of age.


I treat the CPF as the risk free and volatility free investment grade bond component of my portfolio.

So, I don’t use it to invest in equities or to buy properties, for that matter.

This is my ultimate safety net for if everything else goes horribly wrong.

However, I did use the CPF OA funds to buy T-bills as they belong to the same basket of investments.

Risk free and volatility free.

So, I bought T-bills which paid more than the 2.5% p.a. paid by CPF OA in the last one year or so.

In fact, I have a T-bill bought with CPF OA funds maturing this week.

Must remember to transfer the money from CPF IA back into the CPF OA.

The Singapore Savings Bond (SSB) is another risk free and volatility free investment available to me.

In an earlier blog, I said that if the SSB is able to offer a higher than 3% p.a. coupon, I would buy SSB instead of doing VC to my CPF account.

This is because the average yield for VC I do is about 3% per annum.

Take note that this is for my age bracket and also the fact that my MA has already hit the Basic Healthcare Sum which means my VC goes only to my OA and SA.

I have already bought SSBs using funds which would otherwise have been used to do VC to my CPF account this year and in the next year.

That means no VC to my CPF account in my 52nd and 53rd year on planet Earth.

Now, with the latest SSB offering a 3.16% p.a 10 year average yield, I am thinking of “borrowing” money to buy some.


Has AK gone to the dark side?

Well, if I were to buy this SSB, I would be using funds which would otherwise have been used to do VC to my CPF account in 2025!

That is 2 years away!

That would be the year I turn 54 years old.

As I have locked up quite a bit of cash in 8 months fixed deposits back in January when OCBC was offering 4.08% p.a. interest, I will have the funds to do this.

Some might think that continuing to do VC to my CPF account is a better idea as I could use the CPF OA funds to buy T-bills in the meantime.

Well,  if interest rates are really going down sometime in 2024 or 2025, reinvestment risk is very real for short term fixed income instruments like T-bills and fixed deposits.

So, locking in a higher 10 year average yield now doesn’t seem like a horrible idea.

Buying $38,000 of SSBs yearly might seem excessive to some but, for me, it really is just moving money meant for my CPF account.

It is something in my yearly budget.

What might be considered “excessive” is “borrowing” funds from next year which would have been earmarked for CPF VC in 2025 to buy the SSB now.

I might just do it.


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