OCBC offers new option to customers to earn higher interest from CPF funds

SINGAPORE – Central Provident Fund (CPF) members will now have another option to enjoy higher interest rates from their CPF Ordinary Account (OA) savings.

OCBC is offering a promotional rate of 3.88 per cent a year if they place a minimum of $20,000 with the bank for eight months from Wednesday.

CPF members who do not bank at OCBC currently can also take up this offer at any OCBC branch.

At 3.88 per cent, the fixed deposit offer is on a par with the latest six-month Treasury Bills (T-bills), which give a cut-off yield of 3.88 per cent.

CPF members can also invest their OA savings in T-bills.

OCBC’s offer of 3.4 per cent for CPF members to put their OA savings with the bank for 12 months remains on the table.

The current CPF OA rate remains at the legislated minimum of 2.5 per cent, and CPF members have been looking for ways to grow the returns from their CPF savings.

On Tuesday, Manpower Minister Tan See Leng responded to a parliament question on whether there are plans to incentivise CPF members with high OA savings to tap alternative options for higher interest earnings.

Dr Tan said CPF members could put their CPF funds into short-term Singapore Government Securities products like T-bills.

He added that OCBC and UOB customers will be able to use their CPF savings to apply for T-bills online by the first quarter of 2023.

OCBC confirmed to the Straits Times on Tuesday evening that its customers will be able to use their mobile apps and Internet banking accounts to invest their OA and Special Account (SA) funds in T-bills from March.

Mr Na Kok Peng, head of deposits at OCBC Bank, said OCBC is working with CPF to ensure customers have a seamless experience when they apply for T-bills online and on their mobile apps.

For instance, customers can view their CPF details, such as how much of their CPF funds they can invest, before they apply for the T-bills.

Mr Na added that this helps prevent transactional errors and allows customers to better plan the investments of their CPF funds.