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Did you know that despite popular beliefs, you can actually “touch” your CPF money? Find out what else you can do with your CPF money by reading this article!

Understanding CPF

The Central Provident Fund, or also known as CPF, helps Singapore Citizens and Permanent Residents to set aside funds for retirement and secure life goals. It is a mandatory social security saving that is funded by contributions from employees and employers. CPF also helps with homeownership and healthcare protection. To live a comfortable life after retirement, you will need to focus on these three basic needs:

  • Homeownership
  • Insurance and savings for healthcare
  • Retirement income

And these three basic needs can be covered via your CPF money. CPF has a comprehensive savings system—as you make your CPF contributions, you will accumulate savings in these accounts:  

  • Ordinary Account (OA)
  • MediSave Account (MA)
  • Special Account (SA)
  • A Retirement Account (RA) will be created for you once you reach the age of 55.  

How much you contribute to your CPF depends on your age and monthly income. CPF contribution rates can range from 12.5% to 37% of your monthly income. And besides opening CPF accounts via employer contributions, you can also open them when the CPF Board receives cash top-ups or government grants.

What about CPFIS?

CPF Investment Scheme (CPFIS) is an investment scheme by CPF. Through CPFIS, you have the option to invest your OA and SA balances to increase your retirement savings. To invest your OA balances, you will need to apply for a CPFIS-OA account using local banks such as DBS, OCBC, and UOB. However, you have the option to invest in a variety of investments from other financial institutions. 

However, if you wish to invest your SA balances, there is no need to open any specific CPFIS account. In the CPFIS-SA scheme, you can buy and sell the products directly from the providers. To be eligible for CPF investments, you must meet the following:

  • At least 18 years old
  • Not an undischarged bankrupt
  • Have more than $20,000 in your OA
  • Have more than $40,000 in your SA
  • Complete Self-Awareness Questionnaire (SAQ) (from 1 October 2018)

Different ways to invest via the CPFIS OA

  1. Approximately 85 unit trusts 

With your OA funds, you can invest in a range of approximately 85 unit trusts that are managed by reputable fund managers. You can invest into the majority of the unit trusts individually while investing about 10 of them via the Investment-Linked Products (ILPs).  

  1. Singapore Government Bonds (SGBs) and Treasury Bills

You can also invest your OA funds into SGBs and Treasury Bills. However, do note that the interest rates of these bonds tend to be lower than what you could receive in your CPF. You could proceed with this investment if you want to carry out the CPF Shielding hacks as it only requires low charges for investment and carries a low risk of losing your money.

  1. Five Exchange Traded Funds (ETFs) 

These five ETFs that you can invest in using your CPF OA funds are: 

  • ABF Singapore Bond Index Fund
  • Nikko AM SGD Investment Grade Corporate Bond ETF
  • Nikko AM Singapore STI ETF
  • SPDR Straits Times Index ETF
  • SPDR Gold Shares (subject to 10% investible OA savings limit)
  1. Fixed deposits, statutory board bonds, bonds guaranteed by the Singapore government 

Since any products made available will be offering significantly lower interest rates than what you could get from your CPF OA funds, there are currently no available products for this investment. 

  1. Shares, property funds, and corporate bonds

You can only invest up to 35% of your OA savings in shares, property funds, and corporate bonds. And when making such investments, you will need to trade with a brokerage.

As you can see, there are plenty of ways for you to grow your money via your CPF accounts. But although there are many options for you, you must understand that investing requires proper planning and execution. The best way for you to figure out the best course of action is to seek professional advice. For more tips and tricks to grow your wealth, get in touch with me!