Maybank becomes first foreign bank to offer fixed deposits for CPF funds
Maybank Singapore has become the first foreign bank to offer fixed deposits for funds from the Ordinary Account (OA) of the Central Provident Fund (CPF).
The bank is promising a fixed deposit rate of 2.9 per cent per annum for a minimum placement of $20,000 in OA funds for 12 months.
Maybank chief executive Alvin Lee said new and existing Maybank customers can tap this option to grow their OA funds for retirement.
He added: “In any market environment, time deposits are always an evergreen and popular investment option.”
CPF members who want to open a fixed deposit account with the bank should visit a Maybank branch to do so.
Only four designated banks in Singapore are permitted to accept OA funds as fixed deposits. These are the three local banks – OCBC Bank, DBS Bank and UOB – and, since last April, Maybank.
According to the CPF Board, a foreign bank can provide fixed deposit services under the CPF Investment Scheme (CPFIS) only if it has been accorded qualifying full bank (QFB) privileges. Maybank began operations in Singapore in 1960, and received QFB status in December 2001.
CPF members must set aside $20,000 in their OAs and $40,000 in their CPF Special Accounts before they can place any excess CPF savings into a fixed deposit.
Among the local banks, OCBC is currently the only one offering fixed deposits under the CPFIS. The bank started doing so in November 2022.
Since October 2023, OCBC customers have also been given the option to digitally transfer their OA funds to their fixed deposit accounts via the OCBC app.
Placements of OA funds made digitally earn 3.1 per cent a year, compared with 2.7 per cent if customers do so at an OCBC branch.
The placement is for a duration of six months and CPF members have to put in a minimum of $30,000.
In comparison, OA savings earn an interest rate of 2.5 per cent, which is the legislated minimum interest rate payable on those funds.
CPF members under 55 years old get 1 percentage point more, or 3.5 per cent, on the first $20,000 of OA balances.
Those who are 55 and above can get 2 percentage points more, or 4.5 per cent, on the first $20,000 in their OA.
To invest their OA savings, CPF members will need a CPF Investment Account (CPFIA) with one of the three local banks.
Upon maturity of their T-bills or fixed deposits, the funds will go back to their CPFIA, where they accrue interest daily at a base rate of 0.05 per cent per annum.
Any uninvested cash balance will remain in the CPFIA until members instruct their bank to transfer the amount back into their OA. Any cash balance is also automatically transferred back to members’ OA if their account has been inactive for two months.
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