Choosing a CDA account for our twins

Our twins have arrived! It is time for us to select the bank for setting up our Child Development Account (CDA) again. We did some fact-finding on the latest CDA accounts and thought that it is also useful to share our findings with anyone else interested.

Child Development Account

The CDA account is a saving account to be established under a child’s name.

We can choose to establish the account with UOB, OCBC or POSB. Once the account is set up, the Singapore government will present a $3000 gift deposit into the CDA. This gift deposit is known as the CDA First Step and is different from the Baby Bonus Cash Gift which amounts to $8,000 for the 1st and 2nd child; $10,000 for 3rd child onwards.

There is no need for us to deposit any funds into the account before receiving the CDA First Step.

Once we start to accumulate savings into the account, the government will match dollar-for-dollar contribution. In our case, we can get up to $9,000 per child from the government for our 3rd and 4th child. Therefore we will receive in total $24,000 under the Baby Bonus Scheme (or $12,000 per baby).

Looks like a lot of money, but unfortunately, in my case, I had a complicated pregnancy, and the $24,000 is not sufficient to adequately cover my medical cost incurred during pregnancy. Click here for my earlier post if you are keen to know why. See MSF website for details of grants for families with 1 or 2 children, or families with more than four kids.

See the Baby Bonus website for more information.

Use of funds in the CDA

The monies in the account can only be used for the child’s educational and healthcare requirements. Click here for the list of Approved Institutions where you can spend the CDA funds.

Comparing the CDA accounts

Key features of the CDA accounts offered by the 3 Singapore banks are as follows.

Features	OCBC	UOB	POSB
Interest Rates	2% p.a. on the first S$36,000 and 0.05% p.a. thereafter	2% p.a.	2% p.a
Fees	Nil	Nil	Nil
Additional Perks
Merchant Collaborations	Up to 50% discounts with OCBC Baby Bonus Card. Examples of participating merchants: - MPH - Mindchamps - Kinderland - Pororo Park Click here for details.	-	Tie-up with more than 40 merchants. Examples of participating merchants: - Foxysales. com - GAIA online - Pediped online - BottomSlim - Mothercare - Nature's Farm - Pororo Park - Spring Maternity Click here for details.
Credit Card Tie-Ups	OCBC 365 Credit Card - 3% cashback for medical spend transacted over the counter (including dental and hospital), instead of 0.3% for a standard OCBC 365 credit card	-	-
Other saving account tie-ups	OCBC Mighty Savers Programme - Additional CDA Advantage Bonus Interest of 0.40% p.a.	-	-
Insurance Tie-Up	Cash gift and premium discount for insurance policy purchased (both parent and child eligible)	Purchase an insurance policy and receive up to $800 worth of CapitaVouchers.	-

Information is updated as of 10 Feb 2017.

I have selected the bank to open the CDA accounts based on my practical needs. You may prefer POSB for the retail perks offered, or UOB/OCBC if you are keener on the financial planning aspect.

You may also be interested in:

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How I keep my sanity with four kids at home.

What to look for when hiring a confinement lady.

Generating Passive Income – Do I have enough? How much do I have to put in?

How to Go to the Southern Islands Singapore with kids

Far East Organisation Children’s Garden – What a Sensory Treat!

Hope my research is useful to you. Feel free to let me know if there is anything I miss out.

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p/s: This is not a sponsored post.