How To Invest Using Your CPF

By just leaving your money in your CPF accounts, you face no risk of capital loss, but the interest payable may not be as attractive as the rate of return on other investment instruments.

The CPF Investment Scheme (CPFIS) is designed to allow you to invest your CPF savings from your Ordinary Account (OA) and Special Account (SA) in a variety of investment products to enhance retirement savings and meet your long-term objective of post-retirement financial security.

Under the scheme, anyone can invest your CPF savings, as long as you meet the following criteria:

  • At least 18 years of age;
  • Not an undisclosed bankrupt;
  • Have more than $20,000 in their OA; and/or
  • Have more than $40,000 in their SA; and
  • Have completed the CPFIS Self-Awareness Questionnaire (SAQ)*

*The CPFIS SAQ is applicable to new investors with effect from 1 October 2018 to access if you have basic financial knowledge and whether CPFIS is suitable for you.

CPFIS Accounts: A Summary

The table below summarises the differences between investing using the CPFIS-OA and CPFIS-SA:

CPFIS AccountCPFIS-OACPFIS-SA
How much can you invest?You can invest your entire OA savings after setting aside $20,000 in your OA.

Additionally, you can invest up to 35% and 10% of your investible savings in stocks and gold respectively.  
You can invest your entire SA savings after setting aside $40,000 in your SA.
How to start investing using CPFIS?To invest your CPF savings, you need to open a CPF Investment Account with the following CPFIS agent banks with your CPF statement:

– DBS Bank Ltd (DBS)
– Overseas-Chinese Banking Corporation Ltd (OCBC)
– United Overseas Bank Ltd (UOB)*  

*Only UOB offers gold products (excluding gold ETFs). If you wish to invest in gold, you will need an investment account with UOB.  

Subsequently, you can approach approved product providers directly to buy or sell investment products  
To invest your CPF savings, you do not need to open a CPF Investment Account and can simply approach approved product providers directly to buy or sell investment products.  
What other documents are needed?You will need to bring along your identity card and a copy of your CPF statement for the agent bank to verify your CPF account number.

The agent bank will also require you to declare your SAQ status and/or ask to view a copy of your SAQ status.  
You will need to bring along your identity card and a copy of your CPF statement for the product provider to verify your CPF account number.

The product provider will also require you to declare your SAQ status and/or ask to view a copy of your SAQ status.
What happens after you start investing?Your agent banks will liaise with the CPF Board and the various product providers to settle your purchase and sale of investment, and keep track of your investment holdings and transactions in your CPF Investment Account.  The CPF Board will liaise with the various product providers to settle your purchase and sale of investment, and keep track of your investment holdings and transactions.

Source: CPF Board

For your convenience, you can find out how much of your OA and SA savings you can invest by logging into My CPF Digital Services or downloading the CPF Mobile App. Alternatively, you can contact the Service or Product Providers for more information on how to invest using CPFIS. Note that you can only maintain one CPF Investment Account at any time.

What Happens When You Turn 55?

When you turn 55 years old, a Retirement Account (RA) will automatically be created for you and money from your SA and OA will be transferred to this account. Once you have set aside the Full Retirement Sum (FRS) or Basic Retirement Sum (BRS) with sufficient property charge/pledge in your RA, you can withdraw your CPFIS-OA and CPF-IS investments as well as the cash balance in their Investment Accounts.

Withdrawals

To submit a withdrawal application, you can submit a request using My CPF Digital Services. Once the withdrawal application is approved, the CPFIS investments will be transferred to you by your agent bank and/or respective product providers. The withdrawal will be processed within one working day and will not result in the liquidation of your investment holdings.

If you wish to continue to use the monies from your Ordinary Account or Special Account for investments, you can do so as long as you set aside the first $20,000 in your Ordinary Account and the first $40,000 in your Special Account. This is to enable you to earn the extra 1% interest per year on the first $60,000 of your combined CPF balances.

Conclusion

Investing through CPFIS can help you to grow your retirement nest egg and achieve your post-retirement goals more efficiently. However, before rushing to invest your funds, you should always consider the risks of investing and conduct proper due diligence. It is always recommended to exercise caution and prudence when making financial decisions.

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MoneyGrowth

MoneyGrowth

Sharing news, tips and insights on how to grow your wealth in Singapore.
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