I had lunch with a colleague recently. He turned 55 a few months ago and over food, CPF came up. I found out something that surprised me. He had not done a voluntary housing refund (VHR) even though he had already hit his Full Retirement Sum (FRS). When he turned 55, his FRS was moved from Special Account (SA) to the new Retirement Account (RA). The remaining SA balance went to Ordinary Account (OA) before SA closed, making his OA fully liquid. His HDB is fully paid, but the CPF OA money he used for his HDB still sits in CPF, accruing 2.5% interest. When he sells his HDB, he has to refund the principal plus all that accrued interest. I shared the idea of doing VHR.
OA as a one way savings bank
Since he hit FRS, his OA acts like a high interest one way savings bank. You…
