HOW DO I DECIDE WHAT INVESTMENT PRODUCT TO CHOOSE?
This depends on a few factors. How long do you plan to invest? What’s your objective – invest short term and maximise gains, or long term for stable yield?
Also consider your risk appetite. Lower-risk investments, such as fixed deposit accounts, generally yield steady but low returns; higher-risk ones, like buying stocks, may gain – or lose – a lot of money over a short span of time.
More importantly, take a good look at your overall financial wellbeing. What other retirement savings do you have besides your CPF accounts? What other investments have you made and what are your financial commitments?
For example, if you’re using your OA to pay off your mortgage loan and foresee that you may quit your job to be a stay-at-home mum, it wouldn’t be wise to max out your OA on investments. Should you stop working and thus, stop receiving monthly CPF contributions, you’ll want to stretch your OA balance to service your bank loan, so you don’t have to pay cash up front monthly.
And if, say, you just want to make a little something extra for the next two years while waiting for your new HDB flat to be ready, you may prefer to pick a low-risk investment so as not to lose any of your OA that will affect your purchase.