Mr Koshy took issue with the two-month delay in the transfer of Central Provident Fund (CPF) monies from the Investment Account to the Ordinary Account.

The current arrangement - where funds are automatically transferred to the Ordinary Account after two months of inactivity in the Investment Account - is perfect. My reasons:

The CPF Board does not pay interest on a daily basis.

The board and the agent banks do not know whether the funds will be used for further investments. Only the CPF member himself knows. The CPF member can effect an immediate transfer if he wishes to do so.

If a fixed deposit matures on the first day of the month, and the funds are immediately transferred back to the Ordinary Account, the board will not pay any interest for the entire month. And if the investor makes a withdrawal for another investment at the end of the following month, he will again lose the interest for that entire month.

My advice to investors: If you do not intend to use the funds for further investments, transfer them back to the Ordinary Account at the end of the month. Investors can check the deadline time and date with the board.

If an investor wants to use the funds for further investments within the next two months, keep the amount needed in the Investment Account to earn whatever meagre interest that the agent bank pays.

Tan Kok Kiam