Will Singaporean Parents Find the New POSB Baby Bonus Account Worth Signing Up For?

baby bonus CDA POSB

Joanne Poh



If you’re a parent or intend to become one, the Baby Bonus needs no introduction. In order to collect all that Baby Bonus goodness, you’ll need to open a Child Development Account or CDA. A few days ago, POSB announced that they were going to launch the Baby Bonus CDA this month with a rather generous 2% interest rate.

Now, this doesn’t sound too bad at all, considering the typical savings account in Singapore gives you almost negligible interest. But is the POSB CDA really all it’s cracked up to be? Let’s take a look.


2% interest rate

The 2% interest rate offered by the POSB CDA is has been touted as the highest existing interest rate amongst all the CDAs. But hot on POSB’s heels, OCBC and UOB have both announced that they too will be offering a 2% interest rate. So just how competitive is POSB’s offer?

While the POSB CDA offers a 2% interest rate, there is a cap, and when you exceed it you get only 0.05% per annum on the remaining balance above the maximum amount. The caps are as follows:

  • First and second child: $12,000
  • Third and fourth child: $24,000
  • Fifth child: $36,000

On the other hand, the OCBC CDA offers 2% per annum on the first $36,000, after which the balance yields 0.05% per annum, making it the winner in this category.

Until 31 December 2015, UOB is offering bonus interest that gets you 1.7% on your first $20,000 and 2% interest on the remaining balance above $20,000.


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 get 10% off Mothercare products when you spend at least $100, 20% off kids’ supplements at Nature’s Farm and 20% off your child’s birthday cake at Temptations L’Artisan Cake Atelier.

However, it’s worth noting that the OCBC CDA card also comes with its own offers. For instance, it gets you 5% discount at 10 10 Mother & Child Essentials, 10% off at MPH Bookstores and 20% off products from Sparkling Babies. 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.


So is the POSB CDA all it’s cracked up to be?

As you can see, the various banks offering CDAs are being quite competitive here. Once POSB declared that it was going to offer up to 2% interest, the other two banks wasted no time in making their own announcements that they planned to offer 2% interest. However, if you look at the various terms and conditions closely, you’ll notice that POSB’s interest offerings pale in comparison to OCBC’s because of the relatively low caps on the amounts eligible for 2% interest.

Which Child Development Account have you applied for and why? Tell us in the comments!

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Joanne Poh

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.