Invest Insight

A question CPF investors often ask is, how do you compare the return between using CFP to invest and leaving the CPF monies in the CPF account?

CPF monies earn a risk free interest rate of 2.5% p.a. for Ordinary Account and 4% p.a. for Special Account. The interest is computed monthly and, compounded and credited annually.

To make things a little complicated, CPF investment is usually make through an angent bank which charges transaction fee and service fee. On top of that some unit trusts fund also charges a fee for purchase or redemption.

Taking all these into account, how to compare the return?

Let me introduce a tool to do that.

Perviously I use a spreadsheet to workout the returns. I found there is a quicker way.

Try the Unit Trust Investment Profit & Loss Calculator provided by CPF Board.

The calculator allows users to estimate the profit or loss on their unit trust investments. Both the CPF Investment Scheme-Ordinary Account (CPFIS-OA) and CPF Investment Scheme-Special Account (CPFIS-SA) are included.

Here is an example:

The next step is probably to include this calculator into a spreadsheet.