Do you get confused with the Baby Bonus money present with the Child Development Account (CDA)? Joanne Lai, a Certified Financial Planner spells out the distinction for us.
Cash Gift is a sum of cash given to you by the federal government that doesn’t require your contribution whereas the CDA is an identical contribution by the federal government for the quantity that you simply save within the account.
Child Development Account
After you register your child’s start, you possibly can open your little one’s Child Development Account on-line with DBS, OCBC or UOB inside three to five working days. You have as much as 12 years to save lots of in your little one’s CDA and the federal government will match your financial savings inside 2 weeks.
See additionally: Setting up a checking account in your little one
How you need to use your CDA
Most dad and mom use the CDA for little one care, kindergarten charges, and Medisave accredited plans. It will also be used for particular training colleges, suppliers of early intervention programmes, suppliers of assistive know-how gadgets, hospitals, clinics, pharmacies and optical retailers. Most households will burn up their CDA inside 1 to 2 years, particularly in the event that they use it primarily for little one care charges.
Source: https://actsadvisorygroup.com/articles/childcare-fees-table-for-year-2017 and www.babybonus.msf.gov.sg
Summary of Baby Bonus
One main grievance of the money present is that it’s barely adequate to cowl the prices and tasks of being a father or mother. Even although the quantity supplied might not cowl all the prices concerned, you possibly can nonetheless make full use of the cash to compound it to one thing significant.
To assist first-time dad and mom have a greater concept of the prices concerned, I designed a “First-Year Baby Costs Calculator“ which helps dad and mom to grasp one-time prices in addition to attainable ongoing prices.
By Joanne Lai, Certified Financial Planner
This was extracted from the second a part of our E-book collection: How To Raise A Money-Smart Child. You can learn and obtain the complete half right here.