Are you making the most of your CPF savings, or are they just sitting idle? While CPF offers risk-free interest of up to 6%, many Singaporeans wonder if they could earn more by investing. With the CPF Board confirming extra interest rates for 2025, it’s time to ask: should you invest your CPF savings or let them grow at a fixed rate?
Through the CPF Investment Scheme (CPFIS), you can invest in unit trusts, stocks, bonds, ETFs, and gold to potentially achieve higher returns. But investing isn’t without risks. Without the right strategy, you could lose money instead of growing your wealth.
This guide will help you navigate CPF investments wisely. You’ll learn who can invest, the best options, potential risks, and smart strategies to maximize returns. Make informed choices and grow your CPF savings effectively.
What is the CPF Investment Scheme and How Does it Work?
The Central Provident Fund or “CPF” is a government savings scheme that enables Singaporeans to put away 20% of their salary to go towards a MediSave account, retirement account and other purposes.
What many people don’t know, however, is that it’s entirely possible to invest your CPF funds into stocks, shares and exchange traded funds using the increasingly popular CPF Investment Scheme CPFIS, too.
By moving your Ordinary Account or Special Account to the CPFIS, you can invest in a broad and varied range of investment products, with any returns automatically paid back into your CPF accounts as and when you earn. That said, you won’t be able to withdraw your earnings until age 55 and you will need an Ordinary Account balance of at least $20,000 or a Special Account balance of more than $40,000 to be eligible for the scheme.
To be eligible for CPFIS, you must:
- Be a CPF member above 18 years old.
- Have at least $20,000 in your Ordinary Account (OA) and/or
- Have at least $40,000 in your Special Account (SA)
- Complete the CPFIS Self-Awareness Questionnaire (SAQ)—a requirement introduced in 2018 to ensure members understand the risks before they start investing. You can take the SAQ here.
Your investible savings determine how much CPF money you can invest. This amount is calculated as your OA balance plus any CPF funds already withdrawn for investment or education. While CPFIS offers the opportunity to build wealth, it’s important to weigh the potential rewards against the risks and fees involved. Proper planning ensures that CPF investments align with your long-term financial goals.
Best CPF Investent Options & How They Work
The CPF Investment Scheme (CPFIS) offers a variety of investment options to help Singaporeans grow their retirement savings. Here’s an overview of these options, along with their risk levels and potential returns:
Insurance Products
Insurance-based investments under CPFIS include endowment plans and annuities, which offer a mix of protection and wealth accumulation. These products are designed for long-term financial stability, providing either a lump sum payout upon maturity or a steady income stream during retirement.
- Endowment Plans: These are savings plans that provide a lump sum upon maturity or death. They offer low to moderate risk and stable returns, making them suitable for conservative investors.
- Annuities: These products provide a steady income stream during retirement. They carry low risk and are ideal for those seeking predictable payouts.
While they are generally low-risk compared to stocks and unit trusts, returns can be lower, making them ideal for conservative investors who prioritize capital preservation and guaranteed returns over aggressive growth.
Unit Trusts
Actively managed funds that pool money from multiple investors to invest in a diversified portfolio of assets. Risk levels vary depending on the fund’s investment strategy, ranging from low to high. Potential returns are linked to market performance and the fund manager’s expertise.
Fixed Deposits
Low-risk investments where you deposit a sum for a fixed period at a predetermined interest rate. They offer predictable but modest returns, suitable for risk-averse individuals.
Bonds
Bonds are fixed-income securities that offer steady returns with lower risk compared to stocks. Under CPFIS, members can invest in government bonds, which are backed by the Singapore government and provide stable, low-risk returns, or corporate bonds, which carry slightly higher risk but offer potentially better yields depending on the company’s credit rating.
- Government Bonds: Issued by the government, these are considered low risk and provide steady returns.
- Corporate Bonds: Issued by companies, these carry moderate risk, with returns depending on the company’s creditworthiness.
Bonds are suitable for CPF investors seeking predictable income while preserving capital.
Shares (Stocks)
Investing in individual companies listed on the stock exchange. While they offer high return potential, they come with higher risk due to market volatility. Under CPFIS, you can invest up to 35% of your investible savings in stocks.
Exchange-Traded Funds (ETFs)
Passive investment funds that track specific indices. They provide diversification and generally have lower fees. Risk and return levels vary based on the underlying assets.
Gold ETFs
These funds invest in gold or gold-related assets, serving as a hedge against inflation. They carry moderate to high risk due to price fluctuations. CPFIS allows investment of up to 10% of your investible savings in gold products.
Comparison of Investment Types
| Investment Option | Risk Level | Potential Returns | Notes |
| Endowment Plans | Low to Moderate | Stable | Suitable for conservative investors |
| Annuities | Low | Predictable | Ideal for steady retirement income |
| Unit Trusts | Varies (Low to High) | Market-dependent | Diversification benefits |
| Fixed Deposits | Low | Modest | Predictable returns |
| Government Bonds | Low | Steady | Backed by the government |
| Corporate Bonds | Moderate | Variable | Depends on issuer’s creditworthiness |
| Shares (Stocks) | High | High | Subject to market volatility |
| ETFs | Varies | Depends on index | Lower fees, diversification |
| Gold ETFs | Moderate to High | Variable | Hedge against inflation |
CPF Investment Limits & Restrictions
The CPF Investment Scheme (CPFIS) provides opportunities to grow your retirement savings, but there are limits on how much you can invest and where you can allocate your funds. These restrictions help safeguard CPF members from excessive risk while ensuring their savings are used responsibly.
1. Stock Investment Cap: 35%
CPF members can invest up to 35% of their investible savings in approved individual stocks and corporate bonds. This cap ensures that CPF funds are not overly exposed to market volatility, reducing the risk of significant losses.
2. Gold Investment Cap: 10%
Investments in gold-related products, including Gold ETFs and gold certificates, are limited to 10% of investible savings. Gold is often used as a hedge against inflation, but its price fluctuations make it riskier compared to traditional assets.
3. CPF Funds Cannot Be Used for High-Risk Investments
CPF savings cannot be used to invest in cryptocurrency, foreign exchange, leveraged products, or derivatives. The CPF Board restricts speculative and high-volatility investments to protect members from excessive financial risk.
4. Only CPFIS-Approved Providers
All CPF investments must be made through CPFIS-approved agent banks, brokers, and fund managers. This ensures compliance with CPF regulations and provides investors with a controlled, structured investment environment.
How Can I Invest Using My CPF Investment Account and CPF Savings?
If you want to invest your CPF savings effectively, you’ll need to follow the important steps we have outlined below:
Step 1: Meet the Requirements
First up, you’ll need to meet the eligibility criteria we shared in the previous section of this article. So, you’ll need to have a minimum balance of $20,000 in your CPF OA and/or $40,000 in your CPF SA. Any CPF monies you have above these limits are defined as “investible savings” in CPFIS investments terminology. This money is essentially free for you to use for whatever investments you please: but there are some limitations.
Step 2: Determine How Much Money you Have for Your Investments
Next up, you’ll need to determine how much money you have saved in your CPF accounts overall. You can do this by:
- Logging into MyCPF Online Services or CPF Mobile using your SingPass
- Visiting the “My Statement” tab to check your account details
You can also check your balance in person at any CPF Service Center. It’s worth noting that there will usually be limits set dictating how much money you are able to invest in certain products. For example, if you are using a CPF OA account, you can only invest up to 10% of your money in gold or up to 35% in stocks: so be careful with this!
Step 3: Know Which Financial Products You Can Invest Your CPF Funds In
Once you’ve established how much money you have in your Ordinary Account OA or CPFIS SA, it’s time to examine the investments market to figure out what types of investments are available to you: and what account types are eligible for each investment option. The table below outlines everything you need to know:
| Investment Type | Ordinary Account OA Eligible? | Special Account SA available? |
| Singapore Government Bonds | Yes | Yes |
| Annuities | Yes | Yes |
| Treasury Bills | Yes | Yes |
| Endowment Policies | Yes | Yes |
| Exchange-Traded Funds ETFs | Yes | Yes, but never high-risk ETFs |
| Unit Trusts | Yes | Yes, but never high-risk Unit Trusts |
| Investment-Linked Insurance Products | Yes | Yes, but never high-risk Insurance Products |
| Fund Management Accounts | Yes | No |
| Eligible Retail Bonds | Yes, up to 35% of investible savings can be used | No |
| Shares | Yes, up to 35% of investible savings can be used | No |
| Property Funds | Yes, up to 35% of investible savings can be used | No |
| Gold ETFs | Yes, up to 10% of investible savings can be used | No |
| Other Gold Products | Yes, up to 10% of investible savings can be used | No |
As you can see, you will have more investment options available to you if you are using a CPF OA to invest: but you may only be able to put a certain percentage of your investible savings toward certain investments.
Conversely, investing via your CPF SA is a little more limited, and risk appetite is very important with certain types of investment: as putting your money into anything deemed “high-risk” might be prohibited. You can find more information about what is included under the CPF Investment Scheme CPFIS on the CPF website here.
How to Choose the Best CPF Investments for Your Needs
Choosing the right CPF investment depends on your financial goals, risk appetite, and investment timeline. CPFIS offers a variety of investment options, but selecting the best one requires careful planning.
1. Define Your Investment Goals
Ask yourself: What do I want to achieve?
- Long-term growth: Stocks, ETFs, and unit trusts may offer higher returns but come with market risk.
- Passive income: Bonds and annuities provide stable payouts over time.
- Capital preservation: Fixed deposits and government bonds offer low risk, steady returns.
2. Assess Your Risk Tolerance
High-risk investors may prefer stocks, ETFs, or corporate bonds, which offer higher potential returns but greater volatility. On the other hand. low-risk investors should focus on fixed deposits, government bonds, or insurance products to protect their CPF savings.
3. Consider Your Investment Horizon
- Short-term (less than 5 years): Conservative investments like fixed deposits, endowment plans, or low-risk unit trusts are better.
- Long-term (10-20+ years): Investors can afford to take on more risk with stocks, ETFs, or high-growth unit trusts.
4. Diversify Your Portfolio
Avoid putting all CPF funds into one investment. A mix of stocks, bonds, and unit trusts can help balance risk and returns.
5. Understand Fees & Charges
- Unit trusts: Management fees can reduce returns.
- Stocks: Trading fees apply with every buy/sell transaction.
- Liquidity: Some investments, like annuities, lock funds for years.
By aligning investments with your financial goals and risk appetite, you can maximize CPF returns while protecting your retirement savings.
Common CPF Investment Mistakes to Avoid
Investing CPF savings can be rewarding, but common mistakes can lead to losses or missed opportunities. Here’s what to watch out for:
- Investing Without Understanding Risk: CPF investments are not risk-free. Always assess risk levels before committing funds.
- Ignoring CPF Limits & Rules: Exceeding CPFIS caps (35% for stocks, 10% for gold) or misunderstanding withdrawal policies can disrupt financial planning.
- Chasing Past Performance: A fund’s past success doesn’t guarantee future growth. Evaluate long-term potential instead.
- Overpaying Fees: High management or trading fees can eat into returns. Compare costs before investing.
- Lack of Diversification: Spreading investments across multiple asset classes reduces risk. Avoid putting all funds in one type of investment.
FAQs About CPF Investment
1. Can I Withdraw CPF Investments Anytime?
No, CPFIS investments cannot be withdrawn at any time. CPF members can withdraw their CPFIS-OA and CPFIS-SA investments, along with the cash balance in their Investment Account, only after turning 55—but only if they have set aside the Full Retirement Sum (FRS) in their Retirement Account (RA). The FRS can be met using cash or a combination of cash and property. You can learn more about withdrawing your investments here.
2. hat Happens To CPF Investments At Retirement?
When CPF members turn 55, their Special Account (SA) will be closed, and the savings will be transferred to their Retirement Account (RA) to set aside the Full Retirement Sum (FRS). Any remaining balance will be credited to the Ordinary Account (OA).
For CPF investments:
- Members can continue holding existing CPFIS-SA investments until they sell them or they mature.
- The transferred balance in their OA savings account can still be invested under CPFIS-OA.
3. How do I Check my CPFIS Investment?
You can find your CPF Investment Account CPF IA number or check the status of your investments at any time using MyCPF online services or by logging into CPF’s website or apps. Simply navigate to the “My Statement” page and locate “Section C”, where you should find all the information you need clearly displayed. You can also keep track of your CPF shares by clicking the “Discounted Singtel Shares” section.
Conclusion
Investing your CPF savings can be a smart way to grow your retirement funds, but it requires careful planning and understanding of the risks involved. By choosing the right investment options, diversifying your portfolio, and staying within CPFIS limits, you can make informed decisions that align with your financial goals.
Key Takeaways:
- CPF members can invest their OA and SA savings in stocks, bonds, unit trusts, ETFs, and gold to potentially grow their retirement funds.
- CPFIS caps stock investments at 35% and gold investments at 10% of investible savings, and funds cannot be used for high-risk products like cryptocurrency.
- P Understanding risk tolerance, investment horizon, and fees is crucial to making informed CPF investment decisions and avoiding costly mistakes.
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