OCBC CDA (Child Development Account) + Mighty Savers Account review | Updated 2020!

When baby Isaac was born, we looked into the offerings by OCBC, UOB and POSB for a CDA (Child development account).

As he is our first child, we will be entitled to a $3,000 First-step grant and $3,000 one-for-one matching to his CDA.

Funds in this account can be used for a variety of expenses especially child care centre fees. Hence, we were quite comfortable putting in some money for him there.

Take note of the CDA First Step Grant and birth order of your child to know your bonus.

Summary of the CDA offers from the 3 banks (Updated July 2020)

POSB 2% up to $50,000

UOB 2% with no deposit cap

OCBC is tiered (previous it was also 2%)

- First $10,000 @ 0.6%

- Next $10,000 @ 0.8%

- Above $20,000 @2.0%

POSB and UOB remain at 2% p.a interest... but for how long?

Today, POSB and UOB CDA accounts 2% p.a which is more than most fixed deposits.

OCBC has sadly reduced its rates from 2%.

In my opinion, UOB's offering of 2% interest with NO CAP is good but not necessarily a tie breaker.

There is little reason to put too large an amount into CDA  because funds cannot be freely withdrawn. 

It can only be used for education and healthcare mainly.

So how much to top up? - Maybe $50,000 if you have spare cash.

From my calculations, $50,000 should roughly be enough to last for school fees from N1 to K2 in a private childcare. Hence, both POSB and UOB are ok.

If you are wondering what personal accident to get for your baby, then this post can help you.
Explanation of the SOMPO PA Star which can cover for your family. More here

CDA account rates can change... some history

Previously in 2015, UOB did a tiering system for interest in CDA and thankfully it has been revised.

POSB previously had a guarantee on the 2% rate for 5 years but they have removed it.

In year 2011, Standard Chartered Bank had the best CDA interest rate offering at 1%/y only. Now it's all at 2%. Standard Chartered is not even offering support for it anymore from Dec2018.

So ya, things do change.

This was from Jan2020. ALL the CDA accounts offer the same 2% p.a

OCBC's Mighty Savers Account is no longer attractive

I used to advocate OCBC CDA to get it with the Mighty savers account. That's because Mighty Savers Account gave up to 0.6%p.a interest then.

However, interest rates have since shrunk sadly. NEWEST RATE IS ONLY 0.20%pa.

You might as well move your kids saving into an endowment plan or save into any bank account that is convenient for you.

Source: https://www.ocbc.com/personal-banking/accounts/mightysavers.html

Looking to find out the best saving plan for your child,


CDA account becomes PSEA account after age16

At 16 years old or after completing secondary school, the money in your child Edusave account and unused CDA account will also be transferred into the Post-Secondary Education Account (PSEA).

The PSEA account‘s earns 2.5% p.a. interest which is similar to CPFOA.

It can be used mainly for

  • Tuition fees at local universities, polytechnics, art schools, ITE, and other approved institutes
  • Compulsory hostel fees for certain courses
  • Payment of government or CPF education loans

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Last updated on July 10th, 2020 at 07:37 pm

The Astute Parent: A parent who has a sharp acumen on sieving through 'alien' financial jargon to dish out bite size financial tips from a parent's perspective.
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