Truth Exposed: The Dirty CPF-HDB Scheme To Trick Singaporeans

By Singapore Singaporeans and Roy Ngerng

(Please note that this is a two-page article.)

Page 1, 2

There is something very insidious about the CPF – something that they have never told you. Today, let’s uncover the truth about the CPF and find out its true colours for ourselves.

Let’s jump straight in.

Do you know that if you had started work at the age of 21 in 2001 and earn a median wage, by the time you are 55, you should have accumulated almost $700,000 in your Ordinary and Special Account (OSA) (Chart 1)?

Slide2

Chart 1

But why is this not happening to many Singaporeans?

According to Leong Sze Hian, he estimated that only 1 in 8 Singaporeans are able to meet the CPF Minimum Sum and are able to retire.

It has also been shown by 3 studies that Singaporeans have the least adequate pension funds.

Slide3

Chart 2: Developing Asia’s Pension Systems and Old-Age Income Support

Slide4

Chart 3: Melbourne Mercer Global Pension Index

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Chart 4: Pensions at a Glance Asia/Pacific 2011

But, why do Singaporeans have the least adequate pension funds compared to anywhere else in the world, when Singaporeans actually contribute the highest proportion of our wages into CPF? The maths simply doesn’t square.

Manulife had also shown that as compared to the other Asian tigers, Singaporeans are made to set aside the largest proportion of our wages to CPF, leaving us with the smallest purchasing power.

Slide6

Chart 5: Manulife Asset Management Asset rich, income poor? Key components of retirement income security for aging Asia

Let’s break down the reasons why for you.

Singaporeans Are Forced To Pay The Highest CPF Contribution Rates But The PAP Gives The Lowest Returns In The World

First, you need to know that the most basic reason why Singaporeans have such inadequate pension funds in our CPF is because of the low interest rates.

Singaporeans might pay the highest CPF contribution rates in the world (Chart 6).

Slide8

Chart 6: Social Security Programs Throughout the WorldSocial Security Programs Throughout the World: Asia and the Pacific, 2012Social Security Programs Throughout the World: Europe, 2012Social Security Programs Throughout the World: The Americas, 2011Social Security Programs Throughout the World: Africa, 2013Coordinating Healthcare and Pension Policies: An Exploratory Study

But as I had written about before, Singaporeans also most likely earn the lowest interest in the world.

Slide9

Chart 7: Mandatory Provident Fund Schemes Authority A 10-year Investment Performance Review of the MPF System (1 December 2000 – 31 December 2010), Interest Rate Declared on Provident Fund Accumulations Since 1952, Mandatory Provident Fund Schemes Authority A 10-year Investment Performance Review of the MPF System (1 December 2000 – 31 December 2010), Employees Provident Fund Dividend Rate

This would explain why even though we had to set aside such a large chunk of our wages into the CPF – 37% to be exact – our pension funds is actually one of the least adequate in the world!

This is what it actually means – the CPF contribution is from our wages and the CPF interest rates is from the government. So, what is really happening is that Singaporeans are made to part with the largest chunk of our wages in the world to CPF while the government gives the lowest interest rates anywhere in the world. Singaporeans are made to give the most and the PAP allows themselves to give the least (Chart 7).

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Chart 7

And as explained, the PAP has taken our CPF to invest in Temasek Holdings and GIC – they have earned an interest of 16% and 6.5% respectively. Since they are using our CPF and earning such high interest but we are only getting back 2.5% to 4%, this means that what we are receiving is very low – we are not getting back the returns on our CPF that we should from these investments. This means that the interest that is not returned to us is actually an implicit tax that the PAP is making Singaporeans pay, on top of our CPF (Chart 8).

Slide12

Chart 8

So, here’s the first reason why Singaporeans have the least adequate pension funds – the PAP takes out too much of our wages into CPF but gives us too little back in return. Why do they need to take so much of our money away for themselves for?

But the next reason is what is more important and would shock you.

How Using Your CPF To Buy A HDB Flat Entraps Singaporeans

Singaporeans are also able to use the CPF to purchase their homes.

I will go quickly through the maths but you don’t have to get too engrossed with the technicalities. Just try to see the whole picture.

So, assuming that we want to buy a new HDB flat at $300,000, we would put down a 20% downpayment of $60,000. 15% or $45,000 can be paid using the CPF (Chart 9).

Slide14

Chart 9

Take note of the CPF amounts.

For the rest of the 80% or $240,000, if we were to also use the CPF to pay for it, we would need to pay a monthly mortgage of $961 for the next 30 years.

After fully paying for this mortgage for 30 years, we would have paid out $345,960 in mortgage (Chart 10).

Slide14

Chart 10

In total, this means that we would have paid $405,960 for the flat (downpayment of $60,000 and total mortgage of $345,960).

At first glance, we might think we need to pay only $405,960, or about $100,000 more than the actual “value” of the $300,000 flat (Chart 11).

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Chart 11

But actually, you are paying a lot more than that – read further. Now, this is where things get even scarier.

The PAP Tricks Singaporeans Into Paying Additional Interest Rates For Nothing

What do you mean I have to pay more than the downpayment and mortgage that I have already finished paying off? How can there be any more money that I need to pay?

This is because there are some things that the PAP has not told you upfront (or you might have missed amidst all the confusion that they have intentionally created).

When you take money out from your CPF to pay for the mortgage, when this money is taken out, you wouldn’t be able to earn interest on this money since the money is taken out, right? – which is understandable. What this means is that the government won’t need to pay you this interest and you won’t be able to earn interest.

So, that’s the easy part. Here is what you have not been told.

Now, what the PAP has then said is this – since you have taken this money out and are not able to earn the interest, you will now have to pay the interest back into your CPF. You will have to pay the 2.5% interest that is “lost” back into the CPF.

The PAP calls this the CPF accrued interest. This is what the PAP says: “If you sell your HDB flat, you need to refund the principal amount you had earlier withdrawn for the purchase of the flat, including the accrued interest, to your CPF account. This interest is the amount you would have earned, had the savings not been taken out.” Wait, no one ever told me about this! I thought it’s only the mortgage!

So, see if you get this – if you had left your money inside the CPF, the government will pay the interest. But when you take the money out, the government wants you to pay the interest back. In the first place, since you have taken the money out, the interest can no longer be earned and even if the government wants you to earn the interest, they should be the one paying the interest, right?

Well, you are right. The basic principle works like this – if you decide to put your money into a bank, it is the bank that would pay you interest. And if you take your money out, the bank doesn’t pay anymore interest to you. Obviously, you don’t have to pay interest to the bank on money that is no longer there.

So, similarly, if we had taken our money out from CPF, the government stops paying interest to you.

But why is the PAP then making you pay “back” the 2.5% interest that they should be paying? Now, note this – what this means is that you are paying an interest of 2.5% on money that is no longer in the CPF. You are paying an interest into the CPF on nothing (Chart 12).

You have to fork out money from your own pockets to put into the CPF for the government.

Slide17

Chart 12

Do you see it? The government makes you think that if you want to grow your retirement fund, you should put the money back.

  1. First, if you should put any money back, it should be because you have additional savings which you want to save and decide to put into the “bank”. It should not be to put interest back on money you don’t have or even own inside.
  2. Second, you should be the one who decides whether to put the money into the “bank” or not. It shouldn’t be a forced entrapment plan.
  3. Third, why did the government tie in the CPF interest rates to the HDB mortgage, when they are two separate things?

Remember this – (1) the government is making you pay “back” a redundant interest rate which in fact, they should be the ones paying you and (2) the government has concocted a plan to make you pay them what they term as “CPF interest that you have lost” when it’s simply a plan to make you pay them so that they can earn.

This is nothing but trickery.

The PAP Turns Your CPF Into Their Bank To Lend Money To You On Interest

But here’s another way to look at it.

By asking you to “return” the 2.5% interest, the government is effectively saying that the money inside the CPF is money they are lending to you to pay for your mortgage, which is why they had then made you pay an interest on it. What this means is that they had taken over your CPF and made themselves the moneylenders of your CPF. Effectively, they have taken over your CPF, act as if they own it and decide that if you want to take your CPF money to use, they get to decide on the terms they want to lend the money to you – but money which is yours in the first place (Chart 13).

Slide19

Chart 13

But why do you have to “borrow” money from yourself and pay “interest” to yourself on money that is yours in the first place? If I have a dollar in my piggy bank, when I take the dollar out to use, do I need to keep paying an interest for everyday I do not put the dollar back? I get to decide what I want to do with the piggy bank, don’t I? I get to decide when I want to put the dollar back, interest or no interest.

Thus who gave the PAP the mandate turn our CPF into their bank and act as if the money inside is theirs, which they can set an interest on and earn from us? Let’s be very clear – we are using our own money to pay for the HDB flat, not some non-existent money.

And if indeed an interest needs to be charged, isn’t there already a 2.6% interest that we are already paying on the mortgage? Why are we made to pay an additional 2.5%? What the PAP is doing is this – they are making us pay a 2.6% interest to their HDB bank and then make us pay another 2.5% interest to their CPF bank! What this means is that we are actually paying at least a 5.1% interest, which is a very high interest rate (Chart 14)!

Slide19

Chart 14

Where on earth do you get a bank(s) that is so corrupted beyond its means that it doesn’t even tell you the truth of where your money is going but keeps you in the dark until the truth hits you when it is too late, and you’ve lost much of your money?

Do you see what is happening here?

  1. When it is convenient, the PAP will tell you that the CPF is your money and you own it. But when they feel like it, the PAP says that the CPF is their money – they get to invest it anyway they like it, and they get to turn your CPF into their bank and decide to lend you on added interest, as and how they like it.
  2. The CPF then double-charges interest on the CPF you withdraw for the mortgage, by first charging an interest on the mortgage and then charging an interest on the CPF withdrawn for the mortgage (Chart 15).

Slide20

Chart 15

Meanwhile, who keeps losing money and who keeps earning money for free? Do they need to do anything to earn you money? They don’t – all these money that they extract from you is now automatic.

But do you know why the PAP does this? They have already made you pay such a massive chunk of your wages into the CPF – all this money is precious money that they want to use for their own investments. If you are allowed to take it out, it means money that they have to lose, which they cannot use. So they have to find ways to extract more out from your CPF, to give to themselves, rather than to you.

You Are Actually Paying More Than 2 Times The Value Of Your Flat

Then, you might think – fine, no choice what. The government wants to do what, we also cannot speak out, so let them do lor.

It’s only a 2.5% accrued interest right? Suck thumb lor.

Here’s how much 2.5% is.

First, do you remember the 15% downpayment of $45,000 that you had used your CPF to pay? Yes, you have to pay a 2.5% accrued interest on this as well. Do you know how much the 2.5% CPF accrued interest that you have to pay back is? By the end of 30 years, it is $47,812.

Yes, no kidding. The CPF accrued interest that you have to pay back is more than the downpayment that you had paid (Chart 16).

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Chart 16

Getting scared?

Next, you had taken a mortgage of $345,960 from CPF for 30 years to pay for your flat right? Here’s how much CPF accrued interest you have to pay back – a whooping $172,983 in CPF accrued interest, or half the mortgage (Chart 17)!

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Chart 17

In total, you would need to pay a total CPF accrued interest of $220,795 (CPF accrued interest on downpayment of $47,812 and accrued interest on mortgage of $172,983) (Chart 18)!

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Chart 18

Now, note that the CPF accrued interest I’ve shown you so far is only at the 30-years mark. But do you know that as long as you do not pay this CPF accrued interest back to the CPF, this accrued interest just keeps growing

So it doesn’t stop there.

Most people never know about this CPF accrued interest, so they wouldn’t have paid “back” this accrued interest and so, this CPF accrued interest would keep growing. In fact, you most likely would only see any mention of this “accrued interest” on the CPF website which informs you of what you need to pay back when you sell your house.

If the accrued interest keeps growing until the 40 year mark, it would have grown to $396,339, or more than the stated value of the flat of $300,000!

And after 50 years, it would have grown to $621,051, or more than twice the stated value of the flat (Chart 19)! Now do you know why most Singaporeans would never be able to retire?

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Chart 19

Let me give you a bit of perspective. Initially, you had thought that together with the mortgage, you are only paying $405,960 for the flat right? But when you add in the CPF accrued interest of $220,795 at the 30 year point, the total amount that you are actually paying for your $300,000 flat would be $626,755.

So, after the 30 year point, your mortgage would have ended but you still have to continue to pay because the CPF accrued interest keeps increasing and increasing non-stop! After 50 years, your $300,000 flat would cost $1,027,011 (Chart 20)!

The “mortgage” never ends! The PAP has devised an insidious scheme to make you keep paying (without you knowing) so that your CPF keeps dwindling (for their use).

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Chart 20

Get this – this is a $300,000 flat and how much are you paying? You are actually paying more than twice that amount – or $626,755 for that flat (Chart 21).

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Chart 21

And if you never pay this interest back since you wouldn’t know about it anyway, at 40 years, you flat would have cost you $802,299 and at 50 years, the flat would have cost you more than $1 million – or more than 3 times how much the flat is said to cost (Chart 22).

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Chart 22

By now, there should be a lot of question marks above your head now. Most people do not know about this CPF accrued interest that they have to “pay back” until they have to sell their flat. Only then will they be informed about this and only then will they get the shock of their lives.

I bought a flat for $300,000 and I have to pay more than $600,000 for it after 30 years?? And a million after 50 years??? I could have bought a high-end condominium!

Mind-blowing? Not even there yet.

Paying $600,000 For A Flat For Nothing, Literally

Now, when we buy a flat, what we would think is that after I finish paying for my mortgage after 30 years, I would be debt free and I would be able to start saving for my retirement, right?

In fact, that’s what a mortgage should mean, shouldn’t it? You finish paying and then, that’s it. In fact, you own your home now! That’s what the PAP has been selling to us all this while. This is our home!

So, as if it’s not bad enough that you are actually double-paying for your home, it was recently revealed via a question by the Worker’s Party Gerald Giam that your flat will have zero value at the end of its lease.

Can someone please explain to me why we have to pay $600,000 (after 30 years) on a $300,000 for a flat that has absolutely no value at the end of its lease? Then what the hell are we even paying for? So, your flat is supposed to increase in value but after the end of the lease, this value suddenly disappears (Chart 23)?

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Chart 23

What kind of home are we buying to stay for the rest of our lives, and for our children, if it has absolutely no worth? Then why are we even buying the flat??

Why are we dumping all that money into something which is worthless? Why are we spending $1 million for literally nothing?

The PAP Tricks Singaporeans Into Paying Interest For Their Own Use

By now, if this hasn’t shocked you or infuriated you, I don’t know what will.

First, now you know that you have to pay this mysterious 2.5% accrued interest on the mortgage you take out from the CPF.

Then next, you find out that this mysterious 2.5% will actually amount to more than $200,000 after 30 years and more than $600,000 after 50 years – no small amount! $600,000 would have allowed you to retire very comfortably! $600,000 that you are dumping because no one told you anything about this!

Third, you then find out that this mysterious 2.5% will actually make your flat cost more than $600,000, or more than twice the stated value of $300,000 (Chart 24).

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Chart 24

And as we have explained, there is absolutely no need for you to pay this 2.5% “accrued” interest at all because you would be paying this interest on nothing – there’s no money to pay this interest on. In fact, it’s only a trickery that the PAP has concocted to make you give them money for free.

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515 comments

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  3. ross (@civicesi)

    So if this is true what CAN we do about it. If you say vote out ruling party, what can a new party do about it. what can we do to change our predicament right now. Sorry to ask a noob question.

    • Ora Aurora

      this is a corrupt country, I lived here as a Belgian and saw the scams immediately not even after a weeks arrival, but the people here are not educated in that way, they are educated to see the government as hero’s, and to venerate their elderly and not to contradict them, this is why Asia is so abused by Americans/Europeans/Australians/Russians who want cheap labour.

  4. -

    Oh my goodness this made my head spin. As someone who used to consider myself a ‘forever red and white’ Singaporean, I was always reluctant to give up my pink IC because it seemed to have some perks. But I am done living a month-to-month life in the red dot and going to greener pastures as soon as I can.

  5. Max

    I have seen the ugliness of our government. As a soldier. As a entrepreneur. As a volunteer. As a family man. I have left and am never going back. I have found greener pastures with our neighbours.

    • Ora Aurora

      The yare tricking you by not being clear in their formula, if more people realized they were being fooled, then there be more harsh protests against it in the streets, most elderly don’t even know why or what they pay, and the kids of most people are so worn down they don’t have the time to realize what’s going on, no transparency.

      • benjaminhon86ben

        It is illegal to have protests in singapore. Even you you want to speak at speakers corner you need a permit and there are cameras watching. This is how the government gets away with this, FEAR

  6. ys77

    Good analysis but again one sided. Can you try to make a better analysis by using the same payment method with any private banks here? How much we end up paying more? Whether to say or not to say is up to one….whether to intrepret otherwise is another…but down to earth…this is abt how much worse u r off financially if u use the former or latter.

      • kz

        True. A lot of things does not make sense here. Why would you have 240k in your CPL to loan. If that is the rule by the government to make sure you own your own house and let you use your cpf money and at the end of the day put the interest back to the cpf account which is also your account and your money, it’s up to you to think if it is more worth it. Else you can consider a bank loan and the interest go complately to the bank. No your own cpf account. Government probably want you to put the interest back to make sure you have enough money to retire. They can jolly well say you cannot use your cpf to pay your job flat. Then you die die need to pay bank interest. Isn’t that worst?!

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  10. Benny

    Dear Roy,
    Great job!
    I knew this CPF/HDB “scam” & double-whammy interest repayment in year 2000 when I sold my Exec flat. The last “loan-shark” interest, which exMr. HDB MahBTan invented is called LEVY (aka blackmail:). My am barred from ‘downgrading’ to buy a smaller flat unless I pay Mr. HDB an “extortion money” called LEVY $50K+13 year accumulated interest=$230K! (from my profit of $223K earned in year 2001 some 14 Years Ago!) Where is the justification when Mr. HDB already earned thousands of dollars from Citizens who had no choice but to buy their overpriced Flats in SG? And they already earned thousands of dollars from interest earned & stamp duties plus legal fees when you sold! Now they invented LEVY to “take back” every cents & more, that we Citizens make 14 years ago! Or No 2nd flat (under the guise of Heavy Subsidy by HDB). Now which other 1st World Country you know on Planet Earth that “scam” their Citizen’s CPF Retirement Funds “triple-whammy” using this Ingenious, Devious, Rediculous & “Unlawful” creative Tax Accounting which tantamount to Daylight Robbery, Extortion & Plain Cheating!!! Only PAPaya & it’s Genius Overpaid & Overated Politicians could devise this Dubious Scam! Shall we call for “forensic audit” before They “Repent & Hara Kiri” in our 3rd World Parliament Roy??? A Sad Day For 61% (+2m new citizens) Sinkies “blinded” by 50 Years of Propaganda, “Disneyland” & Nation-Building under 1-Party Dictator, Emperor & Eunuch???

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  13. raymond Lee

    I just cant believed what I’m reading and if this is the truth I’m packing up to leave this country.

    • Fy

      Of you pack and go them you are one stupid fellow kena brainwash by these fake figures. Any one with some mathematical knowledge will know these charts are rubbish.

    • PD

      If you could, go. I left 15 years ago and was happy I didn’t take any “grant” to buy the HDB I sold off then.

  14. Thomas Lai

    Total misconception based on a flawed understanding of the accrued interest. This is not how it works.

  15. Fy

    The formula is bloody rubbish.. how the hell can you get 700000 in CPF by 55? You got to be paid 6k a month from age 21 till 55. Another crap piece of misleading politicking junk.

  16. Fy

    Hur? 700k? Are you talking about the 21 yr old now the next 34 years? Or are you talking about 55 yr old now the last 34 years? Make some fucking sense dude. If you tell the 21 yr old now.. who the hell cares? 34 years to wait is beyond their entire life time on this earth. Go ask the entire population in Singapore who are now 55 years old.. how much are they earning 34 years ago? 3k?4k? A month? What rubbish! they will be damn fortunate to even get a decent job! The sum may be correct. . But do it within context and the season of erconomic times. Putting out such argument can only fool the unschooled and stupid ones. 700k my arse!

    • DG

      Fy if you say it ‘Another crap piece of misleading politicking junk.” rubbish why not you prove the formula is wrong and get his fact corrected for him?

      • Joy

        Then why don’t you think of HOW to make more money instead of complaining. If you can’t, then you would have to spend less. If you do not want to plan for retirement, then don’t expect to retire. Don’t keep complaining and do nothing and expect Govt to save your ass.

  17. SP

    Best is take loan from Bank and let your CPF grow (Gov pays 2.5%). But sadly how many can afford that!

  18. Derrick

    Fy, it is stated in the very beginning that if you start at 2001 at age of 21 to 2035. Well guess who is the unschooled or stupid one

  19. BY

    I did some rudimentary calculation, for 2.5% interest per annum on $45,000 downpayment,the interest is $1,125 per year and over 30 years that’s $33,750, not the $47,812 claimed in this article. Even if we compound the interest year on year, I still don’t get the $47,812. Am I missing something?
    I followed the link provided under chart #3 to Melbourne Mercer Global Pension Index article and that article clearly shows Singapore’s CPF plan outperforming that of the US, Japan, Korea, etc. which is a stark contrast to the chart provided in this article. Can the author of this article clarify?

      • dylan

        Hmm, first of all, loan from HDB, u only have to down 10%. And loan is maximum of 25 years? Where got 30years? And they excluded the grant given by govt? Like very selective leh.. Lol

        But at least most Singaporeans get to own a house of their own. You go to Taiwan, their wages and housing ratio is too far apart that they can’t even own one!

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  21. mf

    Calm down everybody. It’s a failed interpretation of accrued interest. Also, is the author hoping for freehold public housing? Come on. Let’s be real. Not gonna happen in tiny Singapore.

    The CPF minimum sum seems like a pain, especially when we’ve witnessed our parents having the pleasure of withdrawing huge lump sums of money when they reached their CPF retirement age. There is good and bad in it. You must look on both sides.

    My advice is that we must start saving from our net monthly salaries early, and diligently. Set aside medical insurance for when things get sour. And do the calculations when taking up loans, be it housing/renovation/car. Spend within your means.

    We can fight for a better solution from the govt. Or protest against the govt. Whatever. In the meant time, please cover your own asses first.

  22. fredlim

    the only solution to this cpf problem is to leave it & walk another way to do thing, which i practice. Very tough but can be achieve.
    how?
    solution: 1) do Work type – self employ – no need contribute cpf , only medisave.
    2) Buy house dun use cpf to service loan, if not will need to pay accrued interests, just use money to pay instalment, use bank loan. (u may consider to use a bit of cpf if cash is not enough), if really need, borrow from parent is still cheaper to pay that accrued interest.

    Solution to those already own a hdb that is fully paid using cpf or have been servicing the loan with cpf mthly. – is to
    1) sell your house now and pay up very stupid accrued interests and buy another house without using cpf. You can down grade and pay full using sale proceed from current house. in this way, u dun owe any accrued interest cos the new house is fully paid.

    2) If u are not selling, just owned the house until die. After that, all the house proceed(obtain after selling – accrued interest) if any and the death cpf saving will according to law given to next of kin or spouse if any or children.

    Above is my solution to this cpf problem which I realize when I was 21 years old. I am 39 now.

  23. fredlim36

    there is one thing I agree which I dun like is what he mention is truth: Why do we continue to owe to the cpf tat we use to pay mortgage monthly even we manage to pay off full mortage after 30 yrs. The accrued interests just go on and on.

    My thinking: to solve this, come out anew set of scheme to pay off that accrued interests using really cash. after house fully paid.

  24. fredlim36

    there is a few factors to consider why he mention: “Singaporeans have the lowest purchasing power among the high-income countries and we also have the least adequate pension fund.”

    Why it happens?
    Years ago, I can remember, during rally, “they” said in order to maintain productivity, we must maintain low wages so as to be competitive and investors will then come here to open business so that we all got jobs. As this prolong, workers wages is not greatly raised over the years. This is why “Singaporeans have the lowest purchasing power”

    Solution: Be self motivated, feel money not enough, do 2 jobs, not enough get a higher education cert, still think poor, then go do business. if really no money, then go buy Toto. that’s my solution to those thinking wanting to be ric

    • WuMingshi

      Solution: Be self motivated, feel money not enough, do 2 jobs, not enough get a higher education cert, still think poor, then go do business. if really no money, then go buy Toto. that’s my solution to those thinking wanting to be rich

      Answer: Really Kong Jiao wei u u got time to work 2 jobs, not enough money liao how to pay to study. do business where the $$$ come from buy TOTO bao tio meh. If ur solution so good there wun have poor people in SG liao

  25. TempSG

    This accrued interest, it goes back into our CPF right? Does it mean we can use it? Or is it just payments made to the government and we can’t use it?

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  27. Wrutalking

    You may want to pay cash if you don’t want to pay whatever CPF accrued interest. Nobody use a gun to point at your head and say you must pay your hdb using cpf if you think it is not fair.

  28. Ridhwan

    Maybe thats what is in ur view. But do u think the services the contracts the builts the paperworks and every staff around that handles ur cpf does not have to be paid? Come on dude. When you do this calculations and making comparisons ur just trying to prove something thatnis only in ur site view. Think again. Would your forefathers just leave his dreams and profession to help the poor and think for the poor? Every thing is done not only for ownself benefit. What LKY had done for us would never been done by anyone. Everyone was just thinking of themselves but he, LKY has made the biggest effort and some thoughts for those that was thingking for themselves. When this lil red dot is unseen, no one would cares. But now this lil Red dot is the most shining dot that everyone in every part of the world is admiring. Have some faith in urself. Do something for the people,for the nation and for ur own future. Gain the respect at ownself and not to look at someone else like the PAP. What they did is for everyone but have u not realised. May you be blessed. Look at the bright side.

  29. Jennifer Bui

    Huh? Such a surface thinking. All the bank in the world work like that. You put your money in the bank (for 0.001% interest mind you), the bank use your money invest somewhere to earn profit to run their operations and pay you interest! You want the government to keep the money, pay you high interest but can’t use the money to multiple it? How shadow, only happen in haven

  30. Harro

    Looks like the trolls from both sides are out. When the noise floods the message, its also flushes away good thinking from either camps making the election simply at a shouting match. Reality, is policy no longer matters, and populist policies will triumph. The only other way is 100% transparency and regaining lost moral authority. Both of which the PAP tries not to do, which is why this election will see larger wins to the opposition.

  31. Chan HonSun

    Still…My big question to the PAP Gov is this…Is the money inside OURS or THEIRS ????? If its ours , then we should be able to decide what to do with it and when to take it out ??? Could any bank tell you ” Sry Sir/Mdm…You are not able to tAKE xxx sum of money as you do not have the minimum of XXX required by the gov ” , as it is happening now ?
    Think about this citizens of Singapore (Born and bred ones , not the converted ones ) …

    • joy

      Of course it’s yours! However, can you sign a contract so if u spend all the money, the govt no need to bail you out because the govt money don’t belong to you too, it belongs to the tax payers.

  32. PT

    can anyone just explain the purpose behind this accrued interest calculation? for every cents borrowed from CPF for housing loan, i pay 2.6% interest…and after selling the house, i have to return the CPF borrowed into the account with acrrued interest, so does it really mean i am paying two time interest for the same amount borrowed?

    • Tan Chee Yong

      No, you only pay interest for the mortgage, if you dont put back the money + interest into the CPF, it means you have taken out your interest amount from the CPF account.

  33. Dio

    Even for the Home Protection Scheme…The premium they charge is not on a reducing sum….so we are in fact overpaying for insurance under HPS scheme

  34. zhangzkl

    This article is misleading. I want to make 2 points here.
    1) The accrued interest is not a fee that you pay to the gov. It’s credited into your CPF OA (ordinary account) when you sell your flat. It’s still your money. In the example mentioned in the article, the amount paid to the flat is only $405,960. When you sell your flat, you need to pay back the CPF withdrawn from OA + CPF accrued interest. The sum is credited into your CPF OA for your purchase of the next property/ retirement/ other investments. $626,755 mentioned in the article is under the assumption that the accrued interest is not your money any more after crediting into CPF OA.
    2) At age of 55, you just need to keep a minimum sum in your RA. You can then withdraw all the remaining balance from your CPF OA. https://mycpf.cpf.gov.sg/Members/Schemes/schemes/retirement/cpf-withdrawals-at-55-years-old The minimum sum is to ensure you have enough savings for you to participate in CPF LIFE. The gov will give you back the minimum sum as monthly payout. As long as you live beyond 80 years’ old, the total payout will definitely be more than the minimum sum. So all your money in your CPF OA is YOUR money.

  35. Anthony

    This page is stupid. It is telling us something most poeple alrd know. Maybe only the author himself hasnt known yet. The accrued interest is a common knowledge alrd among Singaporean, only him doesnt know maybe. You put back accrued, later u buy another house also can use back the money what…. Why so stupid, u sell and no need to find new place to stay meh??

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  37. Tan Chee Yong

    If you dont have CPF, you dont get the extra 17% from company, CPF is supposed to be for retirement, so when you use it to buy house, you will have to “repay” back and of course with interest. I must say that this article show that the author failed at mathematics.

  38. Joe

    The CPF accured interest is a separate thing. If my retirement saving goal is 37% of my income in a FD that pays 2.5% interest, but I take some of this money out to down-pay for a house, my retirement shortfall must include the 2.5% opportunity cost. I don’t see how this is incomprehensible. The 2.5% interest doesn’t flow out to a 3rd party anyway. It is part of your retirement money.

  39. Ling

    Seriously?
    Don make it sound like people are paying the accrued interest to cpf itself, it is actually to your own account for retirement purpose. What’s there to argue that you are paying more for the hdb. Bullshit.
    N u r complaining that cpf interest rate is lower than other country? Why don’t you compare the housing loan rate as well? And the interest of putting your money in FD and CPF.
    So CPF used your money for investment and they had high profit but pay u nuts, it is how the system work isn’t it? They aren’t asking you to bear the losses in investment, they have to pay for whatever and whoever needed to keep your fund safe.
    To protect your retirement fund, so that ppl Don spend it all.. nothing is wrong with that.
    N lastly, everything is about PAP? Lol

  40. Derek

    you pay “back” the 2.5% interest is still your money just in CPF…. 🙂 Will borrowing from a private bank be better? haha pls include a private bank borrowing analysis for us to see the whole picture lol

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  42. Shred

    I guess the couple of truths are that if you do sell your house, you have to return whatever has been borrowed so far + accrued interest to CPF. Not sure what happens if you cant afford to pay back that interest?
    Also the fact that the 2.5% interest you would earn from the govt into your CPF (if the money was never taken out for paying HDB loans) would now be paid by yourself?
    CPF scheme is confusing, i guess it really takes alot of time to understand it well.

  43. Pingback: [Update Ten 230316] Funds Raised for Payment for Defamation Suit | The Heart Truths

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