Invest using SA n OA? Worth it ?

 Investment perspective of OA & SA

One colleague shared his view on the breakeven return rate for the below:

1. Should we invest using SA?
2. Should we invest using OA?

~~~

1. Should we invest using SA?

To assess if an investment is viable, we check SA @4% p.a
compounded for 10-years.

10-year effective SA compounded interest:
(1×(1.04^(10 years)−1)÷10 years ×100% = 4.8% p.a.

In other words, for 10-year compounded at 4% p.a., for SA pays an effective rate of 4.8% p.a. ! Risk Free.

Not many investment can guarantee payout @4.8% p.a

My Takeaway:
1. Keep your SA balance in CPF.  Don't invest with it. I wouldn't.

~~~~

2. Should we invest using OA?

To assess if an investment is viable, we check 0A @2.5% p.a
compounded for 10-years.

10-year effective OA compounded interest:
(1×(1.025^(10 years)−1)÷10 years ×100% = 2.8% p.a.

In other words, for 10-year compounded, for OA pays an effective rate of 2.8% p.a. ! Risk Free.

Are there many investment which can guarantee payout @2.8% p.a + risk bearing extra 1% p.a?. = 3.8% to be meaningful ?

My Takeaway:
1. If your investment is not able to give 3.8% p.a. for 10-years or longer, keep your OA balance in CPF.

2. Surely if short term high yield like T-bill, we can try.  Also risk free anyway.