Complete Guide to the CPF Investment Scheme: Build Strong Retirement Fund

Your CPF savings can earn a reliable interest rate of up to 5% per annum if you are under 55, and up to 6% per annum if you are 55 or older. However, if you are keen to explore alternative methods to grow your retirement fund, the CPF Investment Scheme (CPFIS) offers a range of investment options to enhance your savings. This scheme allows you to invest a portion of your CPF Ordinary Account (OA) and Special Account (SA) in various products with different risk and return profiles.

For those who are less inclined to actively manage investments, CPF provides a stable and secure option. However, for individuals aiming to optimize their savings and achieve higher returns, CPFIS presents a valuable avenue to consider.

So what is CPFIS?

The CPF Investment Scheme (CPFIS) is designed to give you greater control and flexibility over how you grow your CPF savings. It is divided into two distinct schemes: the CPF Investment Scheme-Ordinary Account (CPFIS-OA) and the CPF Investment Scheme-Special Account (CPFIS-SA).

• CPFIS-OA allows you to invest the savings from your Ordinary Account.
• CPFIS-SA permits the investment of funds from your Special Account. 

These schemes enable you to diversify your investment portfolio beyond the standard CPF interest rates.

Current CPF interest rates

Before considering investing your CPF savings, it's crucial to understand the current interest rates offered by your CPF accounts. This will help you evaluate whether you can achieve higher returns through the CPF Investment Scheme (CPFIS).

Below 55 years old:

55 years old and above:

How to invest with CPFIS

To participate in the CPF Investment Scheme (CPFIS), you must meet the following criteria:

• You must be age 18 and above
• You cannot be an undischarged bankrupt
• You have more than S$20,000 in OA
• You have more than S$40,000 in SA

Additionally, you are required to complete the CPFIS Self-Awareness Questionnaire (SAQ) to ensure you understand the risks involved in investing. This step is mandatory before you can start making investments through CPFIS.

CPFIS-OA

To invest your OA savings, you need to open a CPF Investment Account with one of the CPFIS agent banks, including — DBS; UOB; and OCBC.

CPFIS-SA

Investing your SA savings is simpler, as there is no need to open a separate CPF Investment Account. Instead, you can directly approach the product providers to buy or sell your investments. 

What can I invest in using CPFIS?

Investing CPFIS-OA

To invest your OA savings, you need to retain at least $20,000 in your OA. Additionally, there are specific limits on how much you can allocate to stocks and gold:

• You can invest up to 35% of your investible savings in stocks.
• You can invest up to 10% of your investible savings in gold. Investible savings are defined as the total of your OA balance and any CPF funds you have withdrawn for investment and education purposes.

Investing CPFIS-SA

For the SA, you must keep a minimum of $40,000 in your SA before you can start investing the remaining funds.

Different investment options available

The CPF Investment Scheme allows you to invest in a variety of financial products to enhance your retirement savings. However, it is important to note that the CPF Board does not endorse any product providers or specific investment products under the CPFIS.

It's essential to remember that all investments carry risks. If you are uncertain about investing, it might be wiser to keep your money in your CPF accounts, where it earns risk-free interest.

While the CPF Investment Scheme provides a broad range of investment options, it restricts high-risk products to ensure the safety of your retirement savings. Here’s a summary of what you can invest in, ranked from least to most restricted:

Note: "Investible savings" refers to your account balance plus any amounts withdrawn for housing and education. For example, if you’ve withdrawn $30,000 for housing and/or education and currently have $70,000 in your OA, your investible savings would be $100,000. Therefore, you could invest up to $35,000 (35%) in shares and property funds and up to $10,000 (10%) in gold.

Where Can I Check Available OA and SA Savings for CPFIS?

To determine the amount of your Ordinary Account (OA) and Special Account (SA) savings available for investment through the CPF Investment Scheme (CPFIS), you can use the following methods:

Online via My CPF Digital Services

1. Log in to the My CPF digital services using your Singpass.
2. Navigate to "My CPF".
3. Select "My Dashboards".
4. Click on "Investment" to view your available OA and SA savings.

CPF Mobile App

1. Open the CPF Mobile app on your device.
2. Log in with your Singpass.
3. Select "My Investment" to check your available OA and SA savings.

In-Person at a CPF Service Centre

1. Visit any CPF Service Centre.
2. Present your identity card to the service officer.
3. Request information on your available OA and SA savings for investment.

Factors to Consider Before Investing with CPFIS

Investing your CPF savings through the CPF Investment Scheme (CPFIS) requires careful consideration of several key factors to ensure your investment strategy aligns with your financial goals and risk tolerance. Here are some important factors to keep in mind:

1. Investment Goals

Clearly defining your investment goals is crucial. Your objectives might include saving for retirement, purchasing a home, or achieving financial independence. The importance and urgency of these goals will help shape your investment strategy. For instance:

• Long-Term Goals: If you are young and saving for retirement, you may have a longer investment horizon, allowing for potentially higher-risk investments.
• Short-Term Goals: If you are saving for a near-term need, such as buying a home, you might prefer a more conservative approach to steadily grow your capital.

2. Investment Horizon

Your investment horizon, or the time frame within which you plan to use the invested money, is essential to consider. Longer horizons allow you to ride out market fluctuations and possibly take on higher risks. Conversely, shorter horizons might necessitate more conservative investments to protect your capital.

3. Risk Tolerance

Understanding your risk tolerance is vital. This refers to the level of risk you are comfortable with and can afford to take. Factors influencing risk tolerance include:

• Age and Income: Younger individuals with fewer commitments might opt for higher-risk investments, while those with family and housing loans might prefer safer options.
• Personal Comfort: Assess your ability to handle short-term losses and your overall financial resilience.

4. Risk-Return Trade-Off

Higher-risk investments generally offer the potential for higher returns, but this is not guaranteed. It’s important to align your investment choices with your risk tolerance and financial situation. While CPFIS allows for potentially higher returns, remember that CPF savings offer risk-free interest, which can provide a stable foundation for your retirement savings.

5. Diversification

Diversification is key to managing investment risk. Spreading your investments across different asset classes (such as stocks, bonds, and gold) and geographic regions can help mitigate the impact of poor performance in any single investment. This strategy helps smooth out the overall returns of your portfolio.

6. Cost of Investment

Investing through CPFIS may incur additional costs, such as brokerage and transaction fees. These expenses can affect your total returns, so it’s important to factor them into your investment decisions. Ensure that the potential returns justify the costs involved.

Withdrawing Your CPFIS Investments Upon Reaching 55

You can withdraw your CPFIS-OA and CPFIS-SA investments, as well as the cash balance in your Investment Account, after setting aside the Full Retirement Sum (FRS) in your Retirement Account (RA). The FRS can be set aside in full with cash, or partially with cash (at least the Basic Retirement Sum) and property.

Once your withdrawal application is approved, your CPFIS investments will be transferred to you. Importantly, this process does not require the liquidation of your investment holdings, allowing you to retain your investments as they are.

How to Withdraw

1. Log In Online: Access the My CPF digital services using your Singpass.
2. Navigate to Investment Dashboard: Select "My CPF" > "My Dashboards" > "Investment".
3. Submit Application: If you meet the eligibility conditions, you will see a link to submit your withdrawal application through the Investment dashboard.

Processing Time

Your online application will generally be processed within one working day from the day it is received.

Follow-Up Actions

After your application is processed, your agent bank and/or product providers will contact you to arrange the transfer of your investments. This ensures that your investments are securely transferred without the need for liquidation, maintaining the structure and potential of your retirement savings.