There are many ways to safekeep your kids ang bao money. I’ll share how i keep or rather deposit.
It’s the time of the year where all the kids are joyful about. Chinese new year period where everyone is wearing red and went to
There are a few ways to grow your kids
From my point of view, this option is the worst and parents should avoid it at all costs. For first $10,000, the bank is giving 0.05% interest. The $10,000 sitting in the bank will give you $5 as interest after one year which is just enough for a Happy Meal at MacDonalds which cost you $4.90.
And worse, 0.05% is not enough to beat inflation. You are technitally losing money every year by keeping money in saving account.
Stock picking or ETF
I’ll love to do stock picking but as the capital is low ya kids ang bao never collect much enough. The funds will not be able to diversify and most likely will have to adopt an all-in situation so as to not incur too much on commission fees. Another option is to invest into STI ETF yearly and forget about it and check the P&L yearly. In today market, STI ETF will yield 3% in dividends and another 2% in returns. However, there is a possibility that your investment will go into red. Below chart showed that if you enter at a wrong timing, your investment will be in loss and this means that your returns will take longer to recover and that’s not what I want for my kids’ money. The money in future will be used for their housing purpose.
CPF contribution is my decision to deposit my kids
CPF contributions are first allocated to the Medisave Account, followed by the Special Account. The balance is then allocated to the Ordinary Account. As I’m contributing $1000, 21.62% will go into
And Yeah, topping up your child CPF doesn’t give you tax relief.