By Shawn Lee
If you’ve only got a minute:
- You can potentially grow your retirement savings faster by earning higher returns on your CPF Ordinary Account (OA) and Special Account (SA) when you invest via the CPF Investment Scheme (CPFIS).
- You can invest your CPF savings in a wide range of unit trusts offered under the CPFIS, which covers various asset classes and geographies.
- You can transfer funds from your OA to your SA to earn a higher interest rate of 4% but remember that this transfer is irreversible, and SA funds have restrictions on their use.
Your Central Provident Fund (CPF) savings are a key component of your retirement plan. If you are employed and under 55, you are likely contributing 20% of your salary, while your employer contributes 17%. This means your CPF receives funds totalling up to37% of your gross pay, each month.
In Q3 2024, the total balance held in all CPF accounts reached S$593.5 billion, highlighting how crucial it is to maximise your CPF savings to help fund your retirement.
Growing your CPF
Savings in your CPF Ordinary Account (OA) earns at least 2.5% in interest p.a, while your Special Account (SA) earns at least 4% p.a. Do note that you earn extra interest on the first S$60,000 of your combined CPF balances.
To potentially earn more interest, you can move money from your OA to SA. Just remember that while the interest earned on the SA is higher, this transfer cannot be reversed. Moreover, you can only use OA funds for housing loans or property purchases, and SA funds cannot be used for housing or education expenses.
For CPF members aged below 55, you can estimate your CPF LIFE monthly payouts with “Your CPF” in digibank.
Investing with CPF
The CPF Investment Scheme (CPFIS) allows you to invest your OA and SA balances. You can invest OA savings above S$20,000 and SA savings above S$40,000.
As of Q3 2024, more than 1 million CPF members had invested their OA funds through CPFIS, with total holdings exceeding S$2.6 billion.
With the OA interest rate at 2.5% p.a, you can consider investing your OA balance to potentially earn more than this base rate. For example, by investing a one-time amount of S$50,000, the difference between getting a return of 6.0% p.a compared to 2.5% p.a would be an additional S$182,296 more for your retirement nest egg in 30 years.
A larger nest egg offers more options for your retirement lifestyle. So do consider making full use of the magic of compounding by investing your CPF OA savings.
The main objective of CPF is to save up for your golden years. As the monthly lifetime payouts from the national annuity scheme CPF LIFE start from age 65, it means that you have a long-time horizon before you draw down from your CPF.
If you do not have any short-term needs for your OA, by investing over the long-term and potentially enjoying a higher rate of return, you can better mitigate against longevity, inflation and healthcare risks in retirement.
There is a growing suite of products that you can invest with your OA such as unit trusts, annuities, endowment policies, exchange traded funds, shares and gold ETFs. Unit trusts allow you to invest in a basket of stocks which can diversify your investments. This helps to ride out market volatility while potentially achieving higher returns than the OA base rate.
Your investment choices will depend on your risk tolerance, time horizon, financial knowledge, and investment objectives.
Before you begin investing, ensure you understand your financial goals and when you may need the funds. Consider your ability to absorb short-term losses and assess your overall financial situation.
Investing with POSB
POSB offers a wide range of CPFIS-approved unit trusts that you can invest with ease. These funds from reputed global investment managers have undergone due diligence by the CPF Board’s appointed consultant, Morningstar.
The availability of a wide variety of asset classes, geographies, including narrowly focused region and sector funds provide the flexibility to construct an investment portfolio according to your preferred asset allocation and make your CPF savings work harder for you.
Top 10 CPFIS-approved funds available at DBS Bank (as at 7 Jan 2025),
Fund Name | 5Y Annualised Returns |
|---|---|
| Franklin US Opportunities Fund - SGD - Acc | 35.30 |
| PineBridge US Large Cap Research Enhanced Fund - A5CP - SGD - Acc | 34.09 |
| Allianz Best Styles Global Equity - ET - SGD - Hedged - Acc | 30.83 |
| Abrdn Singapore Equity Fund - SGD - Acc | 26.66 |
| Schroder Singapore Trust - SGD - Qdis | 26.10 |
| Allianz Global Artificial Intelligence - ET - SGD - Acc | 24.38 |
| Allianz GIPF -Aillianz Global High - SGD - SAdis | 21.77 |
| Schroder Isf Sustainable Asian Equity - F - SGD - Acc | 21.12 |
| Abrdn India Opportunities Fund - SGD - Acc | 19.90 |
For the full list of CPF Funds available via DBS, click here.
Getting Started
1. Open a CPF Investment Account (CPFIA)To invest your OA savings, you can easily do so online. Apply for your CPFIA with the
2. Invest at your convenience online with digibank or link your CPFIA to your DBSVickers Account
a. For digibank users, go to “Invest” to get started: [Login]
b. Alternatively, if you have a DBS Vickers Account, choose CPF as your settlement mode: [Login]
Happy growing your CPF!
