Using CPF to Invest

Using CPF to Invest: Everything You Need to Know

Investing can help provide for your needs during retirement and help your family. By planning your future, you can diversify your investments. Your Central Provident Fund (CPF) Ordinary and Special Accounts help you plan your retirement. While they have a high-interest rate guaranteed, you can place your money in other products with different risks or advantages. Click here to know more about how to use CPF to invest in Singapore.

Learn all about using your CPF account cash and grow your money possibly higher than OA and SA can.

What is a CPF Investment Account? 

The Central Provident Fund (CPF) is a compulsory savings plan component of the Singaporean social security system. All employers in Singapore contribute to this fund and are usually used to provide a source of retirement income or as an emergency savings fund.

There are four kinds of CPF accounts: Ordinary Account (OA), Retirement Account (RA), Medisave Account (MA), and Savings Account (SA). 


4 Things to Know Before Using Your CPF Account to Invest

Using the available CPF Investment Scheme (CPFIS) for OA and SA accounts is tempting. However, the scheme has inherent risks and policies that can be confusing or have you lose your savings. You should know four pointers before using your CPF cash savings for investment.

1. Only CPF Ordinary and Special Accounts Can Make Investments

Both Ordinary Accounts and Special Accounts can invest in a wide variety of investments. CPF creates your RA by the time you reach the country’s official retirement age. Therefore, both MA and RA cannot be used for investing.

2. Your CPF RA Uses Your Special Accounts First To Build Itself

The CPF RA uses your Special Account savings to build itself upon reaching your retirement. This explains the SA’s high interest rate of 4% because once you reach retirement age, the SA can build a huge chunk of your RA if you’ve saved up early for retirement.

3. All CPF Investment Schemes Use United Overseas Bank (UOB)’s Services

UOB is the primary investment account facilitator of all CPF OA and SA. You’ll need to go through a UOB account opening process when opening a CPF Investment Scheme account. In this light, you may also use UOB’s financial advisors when deciding which investments to use for your needs.

4. Returns Aren’t Guaranteed Once You Start Investing

CPF savers must understand that the offered investments in both OA and SA do not guarantee any returns. OA investors expose themselves to investments with high risks of zero returns, which also means they can potentially have higher returns. Special Accounts do not permit CPF savers to invest in CPF-deemed high-risk investments though both have parallel financial instruments.

In the next section, you can check the differences and similarities between CPF OA and SA.


CPF Ordinary Account vs Special Account Differences and Similarities

Both CPF Ordinary Accounts and Special Accounts allow you to save for retirement and invest your money in various assets. However, Special Accounts have a higher minimum balance requirement and interest rates but restricts you from investing in many high-risk financial products. 

This table will show you a summary of requirements and assets indicated on the CPF website.

Account type Annual interest rate Minimum Balance Required Investment Products
Ordinary Account (CPFIS- OA) 2.5% S $20,000
  • Singapore Government Bonds
  • Treasury bills
  • Annuities
  • Endowment policies
  • ETFs
  • Unit trusts
  • Investment-linked insurance products
  • Fund management accounts
  • Corporate bonds
  • Shares
  • Property funds
  • Gold ETFs
  • Other gold products
Special Account (CPFIS-SA) 4% S $40,000
  • Singapore Government Bonds
  • Treasury bills
  • Annuities
  • Endowment policies
  • ETFs
  • Unit trusts
  • Investment-linked insurance products


CPF Ordinary Account

The CPF Ordinary Account is a savings account that members of the Central Provident Fund (CPF) can open to start saving for a house or college funds for the family’s offspring. It has a fixed interest rate of 2.5% per annum.

CPF funds in your Ordinary Account have a wide range of applications and allow you to invest your CPF savings into various assets we’ve mentioned above (which we’ll dive into further detail in the next section).

CPF Special Account

The CPF Special Account has a base interest rate of 4%, making it one of the most preferred way to save for retirement. However, Singaporeans can only use their Special Accounts on mostly low-risk assets because of its retirement-oriented intent. The CPF Retirement Account uses Special Account funds before your OA savings upon retirement age.


Where Can I Invest My CPF Account?

Here are all the assets you can invest in using your CPFIS-OA and CPFIS-SA. We’ll discuss each of them further after the table.

Type of investment CPFIS-OA CPFIS-SA
Singapore Government Bonds Yes Yes
Treasury bills Yes Yes
Annuities Yes Yes
Endowment policies Yes Yes
ETFs Yes Low-risk assets only
Unit trusts Yes Low-risk assets only
Investment-linked insurance products Yes Low risk assets only
Fund management accounts Yes No
Corporate bonds Up to 35% of investible savings No
Shares Up to 35% of investible savings No
Property funds Up to 35% of investible savings No
Gold ETFs Up to 10% of investible savings No
Other gold products Up to 10% of investible savings No


Analyzing Investment Graph

1. Singapore Government Bonds

Singapore Government Bonds are bonds issued by the government of Singapore, which are sold to investors for a certain interest rate. A government bond is a loan by a government to an individual or company. As such, they are less risky than stocks and bonds that are lower in the risk scale. The government will pay back the amount they borrowed in full plus interest to the individual or company they purchased the product.


2. Treasury Bills

Treasury bills are short-term securities backed by the federal government. They are often issued in certain denominations and have a maturity date of one year or less. Plus, they can be purchased through banks and brokerage firms.

T-Bills are considered a high-risk investment, but they can also be a highly effective tool for generating income. Treasury bills circulate for a specified time and can be purchased at the current market price, allowing you to purchase them when they are not as risky for your portfolio.


3. Annuities

An annuity is a contract between two parties that guarantees a stream of payments (either lifetime or annual) throughout most or all of the life of one or more parties. Annuities are excellent investments because they are attractive to investors because they offer guaranteed returns.

Some examples of annuities in Singapore are municipal annuities, life annuities with periodic payments, and unit-linked annuities. Examples of annuities in Singapore include fixed-term annuities where the fixed term is for a specified number of years and term annuities where the fixed term is for a specific period.


4. Endowment policies

Endowment policies are a type of life insurance policy that typically come with a cash value, similar to a savings account. The cash value is added to the beneficiary’s account and can be withdrawn at any time.

By offering the cash value option, insurers can target individuals who may not otherwise be able to afford an insurance policy or individuals who are not aware of the benefits of purchasing an insurance policy in the first place.


5. ETFs

An exchange-traded fund (ETF) tracks a basket of assets, such as stocks, bonds, commodities, and currencies. ETFs allow investors to gain exposure to a specific market or sector without investing in individual securities. For example, an ETF can track the S&P500 index to maximize its gains.

ETFs are a relatively new investment vehicle that became available in the 1980s and have grown steadily in popularity since then. ETFs are usually passively managed and are bought and sold on stock exchanges.

Most ETFs come at varying risks, which is why the CPFIS investments for SA do not permit investors to use high-risk ETFs. Here’s a quick guide to knowing if you’re investing in a low or high-risk ETF.

Low Risk ETFs

  • Price is the key driver of performance
  • Low volatility, low expense ratio

Higher Risk ETFs

  • Price is not a key driver of performance
  • High volatility, high expense ratio


6. Unit Trusts

A unit trust is an investment that pools investments from many investors and then invests these funds in assets like stocks, bonds, and property. The goal of unit trusts is to provide more diversification to the investor portfolios.

Unit trusts help investors diversify their portfolios because they can invest in many different individual investments without putting up a large sum at the start. Even though unit trusts have the potential for high returns, they are typically not very risky. Plus, they have a longer time frame and offer enormous potential for high capital growth. 


7. Investment-Linked Insurance Products

Investment-linked insurance products link themselves to specific investment instruments. They allow the investor to mitigate the risks of any investment at any particular situation while exposing them to high potential returns..

For example, an investor can purchase a life insurance policy that guarantees a payout if their investment crashes. They can buy a term insurance policy that provides a payout if their investment tanks over a certain period. Many investors purchase these types of policies to diversify their investment portfolio and reduce the risk that their investments will not pay out.


8. Fund Management Accounts

Fund management accounts are an account where investments can be made that are managed to benefit an individual or organization. This type of account is useful for investors who wish to have a greater degree of control in their investments than they would have with a standard brokerage account.

The goal of the account is to enable investors to diversify their assets and make gains over time. It is typically run by an investment firm and can be managed by an individual or team of individuals. The assets in the account are typically invested in a group of stocks, bonds, mutual funds, or other securities to minimize risk.


9. Corporate Bonds

A corporate bond is a debt security issued by a corporation. This fixed-rate bond pays out interest for a predetermined period. Bonds are often issued in the primary market by corporations. Corporate bonds are usually rated by investment-grade credit rating agencies and are traded in secondary markets such as the New York Stock Exchange or Nasdaq.

The interest rate on these bonds is usually lower than those for other types of bonds, so they make a good investment for people who want to invest their money for the long term.



Many people still hold company shares as investments because companies’ share price often has a high value. In addition, company shares are usually liquid and usually available for purchase on the stock market.

Shares and ETFs are good investment vehicles for a portfolio but have a few key differences. Shares are a personal investment, like a stock in a company, whereas ETFs are designed to be traded like stocks and engage in market-making activities. Stocks have the potential for gains or losses and dividends, whereas ETFs don’t have those risks.


11. Property Funds

Property funds invest in many property assets, including residential and commercial properties. Commercial properties are likely to have a greater level of demand than residential properties because the returns on commercial properties are generally higher than residential properties.

By investing in property, an investor is likely to have a greater level of diversity and can increase their chances of earning capital gains from rising property values.

However, property funds aren’t as well-diversified as company shares and ETFs. The funds may also fluctuate in value more than company shares depending on the current real estate market status.


12. Gold ETFs

Gold-anchored ETFs have a guarantee or promise that their assets are backed with physical gold. This gives investors the peace of mind that the value of these ETFs won’t drop in an economic crisis. Regular ETFs have no such guarantees, and will drop in value if the price of gold goes down.

The risks of investing in gold-anchored ETFs largely depend on the sudden rise or fall of the gold prices. If the price of gold doesn’t rise as you would expect, the investment is most likely in trouble. If the ETF unit value fluctuates over time, then the gold-anchored ETF faces immense risks.


13. Other Gold Products

Other gold products you can invest in using your Ordinary Account include physical gold, gold certificates, and gold savings accounts. Keep in mind that you can’t invest your CPFIS-SA funds into these high-risk commodities.


Who is Eligible To Participate in CPF Investment Schemes?

Singaporeans can use the CPFIS provided that they comply with the following requirements.

  • Already at least 18 years old
  • Have no history of being an undischarged bankrupt
  • Had saved up more than S $20,000 in their CPFIS-OA
  • Had saved up more than S $40,000 in their CPFIS-SA
  • Completed the compulsory Self-Awareness Questionnaire

The Self-Awareness Questionnaire is helpful because it gives starting CPF investors the tools and knowledge needed to mitigate risks and invest wisely without losing a huge chunk of their savings.


Investment Graph and Earnings

What Are the Potential Returns of Participating in CPF Investment Scheme (CPFIS)?

Both CPF-OA and SA have excellent guaranteed interest rates, making them a cut above the industry average. Therefore, even the wisest investor will understand that the 2.5% OA and 4% SA guaranteed interest is something to ponder on before deciding to use your CPF to invest.

To avoid losses and maximize your risks, you’ll want to keep in mind the following investment tips:

  • Factor in your time horizon
  • Calculate the potential of your average returns when investing
  • Make sure you have a solid plan to beat OA’s 2.5% and SA’s 4% interest.


How Can You Start Investing Your CPF Savings?

  • (For CPFIS-OA) Open your CPF investment account with DBS, OCBC, or UOB (whichever you prefer): These three local banks make it easy to start investing using your Ordinary Account. An investment account will funnel any profits you gain from your broker straight to your CPF account. You won’t need to do this for Special Accounts because they can get brokerage profits straight to your SA account.
  • Open an investment brokerage account: The brokerage gives you access to all the assets mentioned above. Most brokerages can work with investment accounts and Special Accounts, such as DBS Vickers, OCBC Security, and Phillip Capital. You won’t need to choose the same investment account and brokerage brand.
  • Follow the brokerage account’s instructions: From here on, you’ll need to follow the steps to start investing and managing your funds according to the brokerage’s interface and instructions.
  • Alternative: Use a Robo Advisor: You can follow the steps above for OA and SA but skip the third step and invest using a robo-advisor. These automated investment brokerages manage your financing using artificial intelligence, and many investors have seen success using them. You can use an Endowus account or leveraged FX for your robo advisor-led investing.



CPF investing with your Ordinary Account and Special Accounts is a freedom that any Singaporean can enjoy. However, keep in mind that the high OA and SA interest rates can be challenging to beat with regular investments, so have a concrete plan in place before using the CPF Investment Scheme.

  • CPF allows you to use your OA and SA to grow your money beyond their guaranteed high interest rates
  • Some investment products available in CPFIS-OA are limited or completely unavailable in CPFIS-SA
  • Many CPFIS-OA investment products have high risk and require an experienced investor to grow their full potential and mitigate losses.
  • For novice investors, there’s a high chance that CPFIS investment products can eat away at your savings rather than grow them, so plan accordingly.

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