Welcoming a new baby into our families is bliss for all of us! The feeling of pure contentment while carrying them for the first time, the smiling faces of the little ones, and their attempt at walking on little, unpracticed legs – They are nothing but pieces of heaven!
But, with the arrival of a pair of tiny legs comes more responsibilities and the cost of raising the child properly. Hence, while planning for a kid, devising a proper financial plan for the future is a must, especially in countries like Singapore with high living costs.
Regardless, the government declared the Baby Bonus Scheme to shoulder some of the cost of raising a baby. The scheme and cash rewards encourage Singaporeans to contribute more to the country’s birth rate.
Specifically, this scheme encompasses the Baby Bonus Cash Gift and one Child Development Account (CDA). Moreover, a Child Development Account has two elements – the Government co-matching of parents’ savings and the First Step Grant.
How to Open a CDA Account for your Baby?
Opening a CDA account Singapore is as convenient and less complicated as the fulfilling and beneficial the Baby Bonus Scheme sounds. You can execute the entire process of account-opening for your child through the internet, saving yourself from journeying to any bank physically. For opening a CDA account online, you need to follow the following steps.
Verifying Your Eligibility
For opening an account, you need to fulfil some subtle criteria you will come to know about after visiting the Baby Bonus website. So, visit the website and ensure it. Once your eligibility is confirmed through the site, you are ready to continue with the signup process.
- Use Your SingPass for Signing Up
Once you log in with your SingPass, an easy form will appear, which you can complete filling within 5 to 10 minutes. You can fill out this form during your hospital days, or the same can be done even 8 weeks before the child’s birth. There are some more guidelines that you can notice after visiting the website.
You should commit to the signup after the birth registration of your baby. The system will automatically obtain your child’s information when filling out the form you do so.
If you are going to have a baby for the first time, it’s to inform you that registering your child at the hospital would be yet another well-thought decision, as you don’t have to go to ICA again on doing so.
- Entirely Fill the Form
While filling up the form, you need to share your contact details and mark a channel of communication you desire to use. In addition, the form will also ask you to mention a bank account in which you want the baby bonus cash gift to appear. The account is required for receiving the cash gift, and it’s not the CDA account. Mentioning one of your accounts or the account of your preference would be enough.
- Determine a Bank for the CDA
By nature, a CDA account Singapore is a savings account. Hence, decide upon a bank to open the CDA based on it. This process is also undemanding and can be completed over the internet. So there’s no need to visit any bank physically. POSB, UOB, or OCBC can indeed be your favoured option. All banks might look similar when creating an account for CDA, but you should consider two different factors while choosing.
Some banks often offer additional perks for opening a child’s savings account. So, you can choose a bank for the CDA account in which you have plans of opening a saving account for your kid.
Secondly, you might want to choose the bank you already share a relationship with, internet banking. The CDA account will be linked with your name; you won’t need other login credentials to monitor the CDA.
- Wait to Receive the Money
After your selection, the account will be opened with a balance of $3,000, and you will receive a notification. A NETS card of your child will arrive at your residence. You can use that card for purchasing goods and services from the institutions approved by CDA.
How to Start Maxing Out Your Baby Bonus?
- Choose Banks with High-Interest Rates
While considering banks for creating the CDA account Singapore, judge them on their interest rates, and choose the one that offers the highest of them. You can run comparisons on leading Singaporean banks like UOB, POSB, and OCBC.
- Max Out the Dollar for Dollar Match
The Dollar for Dollar Match by the Government means the amount you will deposit for topping up your child’s CDA account is the amount the government will deposit. Thus, if you can deposit more money into the account, the government will match that amount, and your child will get more money.
However, there are certain limits on deposit amounts for dollar-for-dollar matching. You cannot deposit more than that. Yet, the limit increases for having more babies.
- Purchase Medisave-Approved Plans for Your Child
An Integrated Shield plan would benefit your MediShield Life insurance plan from private insuring agencies. People have such insurance to cover costly outpatient treatment and big hospital bills.
Taking such insurance for your child at a very young age is beneficial. It’s because they won’t be able to be rejected for any health issues then. Besides, you will have to pay only half of the premiums with the advantage of the dollar-to-dollar matching.
Also, your child will have her MediSave account, along with $4,000 within it. But, it’s better to use their CDA account to pay for the integrated shield plan. If you consider keeping the money in the MediSave account, you have to pay a higher interest rate (5%), which is never a problem in the CDA account Singapore.
- Utilize CDA for Maximum Expenditure of Your Kid
Another effective way to maxing out the dollar-to-dollar matching scheme is by paying the maximum portion of your child’s expense through the CDA. But, you need to keep in mind that there are approved expenses you can use the CDA account card for. Medical expenses and purchasing health supplements and vitamins, paying for permitted kindergartens and childcare centres, and optic care are some mentionable ones.