Child Development Account (CDA)

Children bring unwavering joy and warmth to a family. But the costs of bringing up a child in Singapore might be discouraging. Find out how maximising your Child Development Account can boost your family’s financial options.

Starting a family is a life-changing decision

As parents, children are a long-term investment. To some, it’s to guard against old age and to have someone to depend on and provide for them when they are old and weak. This however, comes with required outflow at the start and the expected returns are reaped when the kids become independent working adults. It is undeniable that the cost of raising children in Singapore is a tidy sum. The cost of living increases every year and our demands as modern-day parents also grow with time.

The Singaporean family’s typical financial set-up

With a dual income household and both parents at work, childcare options are taken into consideration when it comes to financial planning.The cost of childcare becomes a prevailing concern and some key questions remain: Who is the best person I can trust to care for my child? Would it be a family member? Should we engage a Foreign Domestic Worker? How about sending baby to the infant care/child care? If one parent decides to be a stay-home parent (be it dad or mum), the household contribution is halved instantly. In this case, is there a way for a family to manage expenses, with the idea that they are saving by opting out of external childcare options?

The costs of raising a child in Singapore

How much do we really need to raise a child in Singapore? How exorbitant a sum has it become that has stopped couples in their tracks when it comes to family planning or thinking of having more kids? Some expert analysts have calculated that it takes anywhere from $100,000 – $500,000 until your child turns 21. Recently, the magic number sits at around $340,000 for the same period. Now, when you place that sum in front of any hopeful parent, it is sure to be greeted with gasps – unless you were born with a silver spoon or have a bank account that would make the majority envious. Do you really know what the key cost contributors in these numbers are? Better yet, how do you maximize the Baby Bonus scheme and leverage your child’s Child Development Account (CDA) baby bonus to use it effectively?

What exactly are the top 3 areas that contribute to the cost of bringing up a child in Singapore?

The top 3 areas that parents spend on children

As a new parent, do you feel that diapers and milk powder alone are going to wipe out your savings? Well, frankly, there are even bigger ticket items that await. Consider these during your financial planning:

#1. Child care

The Early Childhood Development Agency (ECDA) has a useful portal to help parents search for their ideal child care centre or preschools, based on budgets and locations. It also offers tips on how to prepare your child for school. For infant care, according to The Straits Times in 2013, the “average monthly fee for the full-day care of babies aged between two and 18 months rose by 14 per cent from $1,152 in 2007 to $1,318 last October.” For children above 18 months, they typically start off at 3- hour playgroups or half-day/full-day child care. Fees can range from $150 to $2,500 per month, before the waiver with subsidies for working mums. When hiring family caregivers, most couples would give an allowance for expenses, such as food, and for the time taken to care for their child while they are at work. Meanwhile, the rising cost of hiring Foreign Domestic Workers plus their monthly salaries, insurance, levy, agency fees, costs of lodging, food, and other expenses all add up to a substantial cost.

#2. Health

When our little ones are unwell, medical fees come into play, depending on the level of seriousness. Typically, pediatrician rates start from $100; other possible numbers to add to that bill include the cost of medication and, for some, the fees for a specialist’s attention or hospital stays. You can consider your neighbourhood family doctor instead. Look for healthcare providers who are on the list of approved institutions (Ministry of Social and Family Development); that you can use your CDA funds to pay and this allows families to take advantage of CDA’s benefits.

#3. Education

Education is the best investment for a child’s future, and parents take this seriously by immersing their child in enrichment programmes or enrolling them in fun classes to socialise and build confidence. Others choose to put their child in a full-day preschool to better spend their days learning in a multitude of ways. No doubt, the cost of education is expensive – and more so at a younger age. Right brain classes? Music lessons? These are optional costs that you will need to discuss with your partner if the family is able to afford them.

Now that you understand what the key expenses of raising a child in Singapore are, find out how you can stretch your CDA dollars and be a smart parent!

Savvy parenting: how to stretch your CDA dollars

And now for the good news! You can maximise the Baby Bonus Scheme and leverage your child’s Child Development Account (CDA) effectively to help lighten your load.

With the Baby Bonus Scheme implemented by the Government, children born on or after 26 Aug 2012, will receive a Cash Gift of:

  • $6,000 for 1st and 2nd child
  • $8,000 for 3rd and 4th child

With payouts into your account within the first 12 months from the birth of your baby, the load of new parents are lightened with the costs of bringing up a child in Singapore reduced.

Following the recent National Day Rally announcement, PM Lee Hsien Loong shared that babies born from 1 Jan 2015 will enjoy the enhanced Baby Bonus Scheme which is as follows:

  • $$8,000 for 1st and 2nd child
  • $10,000 for the 3rd child and subsequent child

The CDA is part of the Government’s Baby Bonus initiative which encourages parents to save for their children. For children born on or after 17 Aug 2008, families are entitled to receive Government-matching deposits in their Child Development Account (CDA) up to:

  • $6,000 for 1st and 2nd child
  • $12,000 for 3rd and 4th child
  • $18,000 for 5th and subsequent child

You can use the CDA funds at Baby Bonus Approved Institutions to pay for:


  • Child care centres, kindergartens and special education schools.
  • Providers of early intervention programmes.
  • Providers of assistive technology devices.


  • Your child’s medical-related expenses or purchase MediShield or Medisave-approved private integrated plans. The top 3 expense categories you are bound to spend on can also be reduced with the OCBC CDA. That means mini mising the need for you to fork out cash.

With the increased financial commitments of a new family, OCBC understands it all to play a proactive partner in your parenting journey, which led to the development of the OCBC CDA account.

Exclusive benefits of being an OCBC CDA holder help you further reduce those expenses while you save:

  • 2% p.a. on the first S$36,000* in your OCBC CDA;
  • Higher interest rates of up to 0.8% p.a. with the Mighty Savers® Programme, a kids savings programme that helps teach your child the importance of saving. Join the Programme now by signing up for the OCBC Monthly Savings Account^;
  • Discounts with the OCBC Baby Bonus Card at bookstores, optical shops, enrichment courses and other merchants like MindChamps and Kinderland;
  • 3% cashback on medical spend with the OCBC 365 Credit Card, on top of existing card benefits such as cashback at Esso service stations, online spend and grocery stores.

Moreover, on the family protection front, OCBC also takes care of pregnant mums by offering $108 CDA cash gift with the MaxMaternity Care pregnancy protection plan, for sign ups within 2015. Some benefits of MaxMaternity Care:

  • OCBC is the first maternity insurance plan that covers you as early as 13 weeks into your pregnancy.
  • Mothers will be protected from 8 types of pregnancy complications.
  • Children will be protected from 18 congenital illnesses

If you take up selected life insurance plans, a $100 CDA cash gift is yours while you grow your savings alongside insurance coverage. For peace of mind, insurance for the family should start early.

OCBC offers 40% off premiums for ShieldWise, a personal accident protection which protects not just your child but also you as a parent.

Parents, do remember that being savvy and smart is the key to enjoying the advantages of raising a family in Singapore. Every subsidy and dollar saved helps manage the stress and costs of bringing up a child. With the Baby Bonus scheme and OCBC CDA, things can be better if we live within our means and choices. Happy parenting!

Visit Baby Bonus Online and choose OCBC Child Development Account.

Apply now


By The Asian Parent | This article was first published in on 22 September 2015

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