Dear readers, interest rates are climbing north and so is inflation.
I believe this is a good time for savers with the higher interest rates.
But I also believe with inflation and cost of living getting higher, there would still be many who will turn to equities to get the supposedly traditionally higher returns associated with equities, notwithstanding global stock markets have already become more volatile with US Federal Reserve increasing the interest rates.
And if more monies are set aside for higher expenditures, I am of the view that some investors may turn to using CPF monies for investing in these current times.
CPF monies is one pot of important savings for Singaporeans, to fund mainly mortgage payments of their houses as well as for healthcare.
Where it comes to CPF interest rates, in my view, doing nothing is the Best Strategy.
You see, when you do nothing to your CPF monies, what do your CPF monies in turn do?
Your CPF monies grow at an interest rate of 2.5% for Ordinary Account and 4% each for Special and Medicsave Accounts and Retirement Account quietly and steadily over the years.
I know many who have deployed their CPF monies for external investments.
But given the volatile and uncertain stocks markets environment in the recent years, I have heard how these outings have been less than optimal. The outings would be worse than just leaving the CPF monies untouched where they originally reside in our CPF account.
Yes, there could be instances where CPF monies taken out could earn higher returns, but in exchange one must accept the investment market risks and indeed market risks are indeed higher in recent years.
I would put my spare cash for investment rather than touch my CPF monies which are already earning good risk-free interest for investing uses.
Don’t you think so?