Saturday, May 24, 2008

Higher Interest Rates from opening a CDA account

Children bring joy to the family. The Baby Bonus Scheme, first introduced in April 2001 and enhanced in August 2004, supports parents’ decision to have more children by helping to lighten the financial costs of raising children. The Scheme now benefits the 1st and 4th child born on or after 1 August 2004. You will get a cash gift of $3,000 each for your 1st and 2nd child and $6,000 each for your 3rd and 4th child.

Your 2nd to 4th children will also enjoy government contributions in the form of a dollar-for-dollar matching for the amount of savings you contribute to your child’s Children Development Account (CDA). This is a special savings account that you open at any POSB branch for your child who is eligible for CDA. You can save in the CDA any time until 31 December in the year the child turns 6 years of age. The savings will be matched up to the cap of $6,000 for the 2nd child and $12,000 each for the 3rd and 4th child. The Government will match your savings in the following month.

The savings in the CDA may be used to pay fees for all your children who are attending Approved Institutions registered with MCYS under the Baby Bonus Scheme. These include child care centres, kindergartens & special education schools registered with the Ministry of Education and early intervention programmes registered with the National Council of Social Service. The CDA savings can also be used to purchase MediShield or Medisave-approved private integrated plans for all your children and pay for all your children’s medical-related expenses. These would include consultation fees, treatment fees and prescription costs incurred at healthcare institutions.

Baby Bonus One-Stop Service
To make it more convenient for you to join the Baby Bonus Scheme, a one-stop service is available at the birth registration counters at the hospitals and the Immigration & Checkpoints Authority (ICA). The hospitals are East Shore Hospital, Gleneagles Hospital, KK Women’s and Children’s Hospital, Mount Alvernia Hospital, Mount Elizabeth Hospital, National University Hospital, Raffles Hospital, Singapore General Hospital and Thomson Medical Centre.

Change of Managing Agent for Baby Bonus
From 1 August 2008, you will have more choices, enjoy better returns and receive better services when the Oversea-Chinese Banking Corporation Limited (OCBC Bank) and the Standard Chartered Bank take over from DBS as new managing agents for the Baby Bonus Scheme.

Looking for higher deposit rates from Singapore Banks? Open a CDA with one of these banks to get a higher interest rate:

2. Standard Chartered

A sample of OCBC's CDA rate is as follows:

OCBC CDA Extra OCBC CDA Time Deposit
Interest Rate
2.05% p.a. (i.e. 1.00% p.a. + bonus rate of 1.05% p.a.) 1.20% p.a. + bonus rate to be announced in August 08 To be announced in August 08

Promotional rate of 2.05% p.a. for CDA will be valid from 1 August 2008 to 30 September 2008. Thereafter, interest rate for CDA will be set at 1% p.a. or a rate to be determined by the Bank having regard to prevailing market conditions. Promotional interest rates are subject to change without prior notice.

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