POSB Smiley CDA: Is It Worth Signing Up For?
The POSB Smiley CDA has a cute name. But I know what you’re thinking: Show me the numbers.
What’s a CDA you ask? It stands for Child Development Account, which is a savings account that is tied to your baby or child. It enables you to collect your Baby Bonus payout from the government, and can be used to pay child-related expenses.
POSB, OCBC and UOB all offer CDA accounts, which typically offer 2% interest. Doesn’t sound too bad at all, considering the typical savings account in Singapore gives you almost negligible interest. The POSB one is POSB Smiley CDA.
CDA accounts in Singapore: 2% per annum interest rate
In 2015, when CDA accounts were first introduced, POSB CDA was the first to offer an interest rate of 2% p.a., but OCBC and UOB soon followed suit.
There are still differences with regards to the 2% interest rate per annum, particularly with regards to the maximum amount.
POSB Smiley CDA used to have cap amounts for the 2% p.a. based on the child’s birth order. When you exceed the caps, you get only 0.05% per annum on the remaining balance above the maximum amount. They’ve since removed the caps in 2018, so you now get to enjoy 2% p.a. on the full balance.
In comparison, OCBC CDA offers 2% interest per annum for the first $36,000 deposited. After which the balance yields 0.05% per annum.
As for UOB CDA, there is no deposit cap. So does it mean that the UOB CDA is more attractive? With the cap removed from the POSB CDA, this might no longer be the case.
Discounts and offers with POSB Smiley CDA’s Baby Bonus NETS Card
One of the biggest perks of the POSB CDA is the fact that you get a Baby Bonus NETS card. Before you start scoffing that an ATM card isn’t all that useful, thank you very much, the main draw of the card is that it gets you a range of discounts on products and services, many but not all kid-related.
For instance, you stand to enjoy additional 1 hour playtime with purchase of non-member child entry ticket at Pororo Park Singapore. You get a 10% off VitaKids supplements with a minimum spend of $50. Mums even get a special price of $48 for cut and colour at Jean Yip Hairdressing.
However, it’s worth noting that the OCBC CDA card also comes with its own offers. So ultimately, which card is more useful to you depends on which products and services you intend to use, so check the POSB and OCBC websites and compare the offers.
In this regard, the UOB CDA loses out as it doesn’t really entitle you to discounts and perks. If you purchase an insurance policy with UOB, they give you up to $800 Capitaland vouchers. But that ain’t really a perk, is it?
POSB Smiley CDA limited-time perk 2018: Free flight for baby!
It seems like the battle is between OCBC CDA and POSB Smiley CDA.
While OCBC’s 2% interest rate has a cap, you might argue that you won’t even be putting that much money into the CDA, since its use is only limited to kid-related expenses such as preschool fees, enrichment classes, and paying for your child’s insurance and medical-related expenses.
If you’re choosing between the two, this ongoing promotion could make or break the deal for many indecisive parents: From 1 Aug 2018 to 31 Jan 2019, you can get one free Singapore Airlines (“SIA”) infant ticket on economy class (worth up to S$300) when you sign up for the POSB Smiley CDA.
FYI: After your child turns 13 years old, the CDA account will be closed and all the remaining money will be transferred to a Post-Secondary Education Account, which can be used for his or her tertiary education at approved institutions.
Which Child Development Account (CDA) have you applied for and why? Tell us in the comments!