OCBC CPF Investment Account

OCBC CPF Investment Account Review: Best for Mid to Long Term Investors

An OCBC investment account is an ideal place for your investments. Investors can invest in products ranging from low to high risks.  Moreover, most of the products are insured by the Singapore Deposit Insurance Corporation. They are suitable for mid to long-term investors. However, the account is only available to Singaporeans.

 

What is the CPF investment scheme?

If you are looking for an opportunity to invest with your nest egg, the Singapore CPF investment scheme is an ideal place to begin. The setup purpose of the CPF investment scheme is to help people save more for retirement. 

It comprises three accounts: ordinary account, special account, and Medisave account. Know more about CPF investment scheme here.

 

1. Ordinary account

An ordinary account caters to growing an employee’s savings and investment, education, and housing purposes. The ordinary account and special account combine to form a retirement account at age 55. An account holder can begin to withdraw most of their savings from that time on.

Besides earning a 2.5% rate interest per year, you will get an extra 1% interest per annum for a total balance of CPF accounts(ordinary and special accounts only) with the first combined balance of S$60,000, of which, at least S$20,000 are in an ordinary account. The benefit applies to members at or under age 55.

But you may wonder it may not be your investing goals beyond the return offers. The good news is the CPF ordinary account allows you to invest in more products beyond the S$20,000 limit. You can now invest in stocks, bonds, and even gold with an investment account.

 

2. Medisave account

A Medisave account is the savings a member saves for future medical expenses incurred, especially at retirement. It can also pay for outpatient and medical insurance premiums.

 

3. Special account

A special account fund is a funding account to pay for living expenses at retirement. Members fund the special account by buying retirement-related financial products.

 

What is an OCBC CPF investment account?

OCBC is one of a few agent banks offering CPF investment account services. The services they offer include:

  • The bank coordinates administrations with investing companies, e.g., insurance companies, stockbrokers, fund houses, and bond dealers related to clients’ activities. It reduces clients’ time and effort in settling with investing companies. 
  • OCBC provides updated investing information helping clients with their investments. Investors have a clear picture of their assets.

 

What can I invest with an OCBC investment account?

An OCBC investment account offers you various investment products according to CPF Board guidelines: 

The allowed investment products comprise:

1. Fixed Deposits

The deposit should be in a CPF Fixed Deposit Bank.

2. Singapore Government Bonds

  • The bonds are tradable in the primary and secondary markets
  • Traded by bond dealers

3. Singapore Government Treasury Bills

The procedures are the same as point 2.

4. Statutory Board Bonds

The procedures are the same as point 2.

5. Bonds guaranteed by the Singapore Government

The procedures are the same as point 2.

6. Annuities

  • Providers must be the insurance companies specified by CPFIS.
  • Members must be the insureds.
  • Only single premium and recurring single premium policies are allowed.
  • The endowment policy maturity date must expire before or on the member’s 62nd birthday.

7. Endowment Insurance Polices

The procedures are the same as point 6.

8. Investment-Linked Insurance Products

The procedures are the same as point 6.

9. Unit Trusts

  • The investing services providers must be appointed by CPFIS.
  • The fund managers should invest according to the investment guidelines set by CPF Board.

10. Exchange-Traded Funds

  • The funds should meet the guidelines set by CPF Board
  • The funds are listed on the Singapore Exchange – Securities Trading(SGX-ST).

11. Funds Managed Accounts

The funds should meet the guidelines set by CPF Board

12. Shares(not more than 35% of investable savings)

  • A company is incorporated in Singapore.
  • The ordinary, preference shares and corporate bonds are listed on the Singapore Exchange – Securities Trading(SGX-ST).

13. Property Funds(not more than 35% of investable savings)

The procedures are the same as point 12.

14. Corporate Bonds (not more than 35% of investable savings)

The procedures are the same as point 12.

15. Physical Gold and Gold ETFs (not more than 10% of investable savings)

The fund must meet the guidelines set by CPF Board and be listed on the Singapore Exchange – Securities Trading(SGS-ST).

Investable savings is the sum of the ordinary account balance and the withdrawn amount for investment and education purposes.

Investors can invest in foreign currencies of items 6,7,8,9,10,11 and 15 other than the Singapore dollars.

 

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Who is an OCBC CPF investment account for?

OCBC is ranked one of the five safest banks globally by “‘Global Finance Magazine.” The Asian Banker lists OCBC as the strongest bank for 18-19 and the fifth of the strong banks in the Asia Pacific. 

An investment account offered by OCBC offers administering and backup services for clients. Therefore, it is suitable for beginner investors and sophisticated investors.

1. Beginner Investors

A new investor uses the vital administration services by OCBC to better manage their investments. OCBC provides internet, phone, mobile, and ATM services in one stop to CPFIS members. Gaining access to the services 24 hours a day, they can focus on managing the investments hassle-free. Moreover, a financial advisor is an excellent partner to work with.

2. Sophisticated Investors

Experienced investors benefit from the wide range of products offered by OCBC. The risks rank from the highest gold ETFs to the lowest government bonds. Members can create strategies by combining investment tools with different levels of risks based on investing preferences.

 

Comparisons of brokerage accounts from investment account providers

You need to open a brokerage account for investing your money while the trading fees are different from DBS/POSB, OCBC, and UOB Kay Hian.

OCBC Securities DBS UOB Kay Hian
Min. commission for the US Stocks US$20 US$25 US$20
Min. commission for SG Stocks SG$25 US$25 US$18
Min. funding for an account 0 0 0
Access to Markets 15 markets worldwide The US and Singapore exchange The US Singapore exchange
CDP account registration Not necessary Not necessary A CDP account is necessary to trade SG stocks

 

Though the OCBC minimum commission for Singapore stocks is higher than UOB Kay Hian, it can access more international markets for stock, futures, and warrants trading. If investors trade more than the minimum bar, they have more geographic and administrative advantages in international investing. 

 

What are the detailed charges?

Investors should beware of other fees banks may charge as this may affect the return from investments. The following table lists the main charges OCBC levies on the investment account:

Transaction Charges In Singapore Dollars
Fixed Deposits, Funds Managed Accounts and Insurance Policies $2.50 per transaction
Gold: Safety Custodian Charges 0.25% per annum, based on the highest balance during the month subject to a minimum of $2 per month

Shares/ Loan Stocks/ Unit Trusts

a. Purchase, Sale, Rights Application, Excess Rights Application (successful or unsuccessful), Cash Offer, Conversion of Loan Stock, and IPO Allotment

b. Right’s application for warrants using cash

1. $2.50 per 1000 shares/units or part thereof, subject to a maximum of $25.00 per transaction. 

2. $15.00 per transaction

Singapore Government securities

– Purchase and Sale transactions

$2.50 per transaction

Statutory Board Bonds

– Purchase and Sale transactions

$2.50 per tradable lot or part thereof, subject to a maximum of $25 per transaction

Other transactions

1. Interbank transfer of accounts

2. Cancellation of trades

3. Application for initial public offering by

4. Electronic share applications

5. CPF cashier orders

1. $3.00 per 1000 shares/units or part thereof, subject to a maximum of $30.00 per transaction. For other investments, $3.00 per transaction

2. $5.00 to process each unsuccessful transaction, e.g., Due to insufficient funds, holdings, or cancellation of trades

3. $2.00 per transaction(for items1 and 2)

Service Charges
Shares/ Loan Stocks/ Unit Trusts/ Singapore Government Securities / Fixed Deposit/ Fund Management Accounts. Insurance Policies/ Statutory Board Bonds  $2.00 per counter per quarter
CDP settlement fees $0.35 per transaction
Share transfer charges $10.00 per counter

 

A Goods and Services Tax rate(GST) applies to members with a residential address.

 

More information about the OCBC CPF Investment Account

1. How to apply for an account with OCBC?

If you intend to apply for an account, you should read the following information:

a. Who can apply?

  • Singaporeans and permanent residents at or over 18 are eligible.
  • An applicant is not bankrupt.
  • An applicant who has an investment account with another bank can also apply and transfer existing assets to an account with OCBC.

b. A self-awareness questionnaire

  • An applicant must fill out the questionnaire from the CPF investment scheme.

c. Additional documents required

  • Phone bills
  • Half-yearly statements
  • Bank statements

 

2. What are the procedures for applying?

  • Download the OCBC app or go to the bank’s website, select “apply”; select “CPF Investment Account/CPFIS Account.”
  • Use a one-time password through SMS.
  • Proceed the application
  • Fill up personal details
  • Review and confirm your details
  • Submit

 

3. What if I have an investment account with another agent bank?

If you plan to transfer your assets with another bank, you should go to one OCBC branch and arrange to transfer your assets. You should not request to close an investment account beforehand.

 

4. What is a Deposit Insurance Scheme?

The assets of CPF investment accounts are under the protection of the Singapore Deposit Insurance Corporation. A member can insure his assets under the scheme for up to S$75,000 if the assets are not in other currencies or structured products.

 

5. How to close an OCBC Investment Account?

The bank will close and transfer the proceeds in a client’s investment account to another agent bank specified upon the client’s instruction.

If there is a deposit of physical gold with OCBC, the bank will sell the gold and transfer the sale proceeds subsequently.

OCBC may close a client’s account if there are no activities for two consecutive months. The bank will transfer the money to the client’s ordinary account after the close.

 

Final Words

OCBC is among the few banks offering CPF investment account services. The bank has a solid financial background and extensive branches and is the safest, trustworthy bank for investors. The following are some takeaways:

  • OCBC provides efficient banking support, e.g., internet banking, ATMs, Mobile phone services, and excellent coordination administration services to support investors.
  • A wide range of low to high risks products is available to new and advanced investors.
  • Most of the products are insured(a client should consult the authority for more information).
  • It is suitable for mid to long-term investors.
  • One can maximize the benefits of the investment scheme by setting up a CPF investment account to grow more. 

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