CPF OA, SA, MA and RA Accounts and Interests Explained

As you probably already know, some of your money is automatically channelled into CPF every month. Also known as the Central Provident Fund, CPF is Singapore's national social security savings scheme. The portion of your monthly salary that is automatically channelled to this account will be divided into separate CPF accounts. There are 4 separate CPF accounts, and they all play different roles in helping you reach financial security. And understanding how these CPF accounts work is crucial in ensuring that you have enough savings for your financial security in the long term, even after retirement.

In this article, we’ll demystify the different types of CPF accounts so you can better figure out how to use them.

As a brief overview, these are the 4 types of CPF accounts: 

• Ordinary Account (OA):  for housing, insurance, and investment
• Special Account (SA): for retirement funding and retirement-related financial products (meaning you can’t make riskier investments such as in shares or Gold-related products)
• MediSave Account (MA): for hospitalisation expenses and approved medical insurance
• Retirement Account (RA): formed after age 55 for the  CPF LIFE annuity scheme using money from your OA and SA, so it’s not directly funded by your monthly contribution

Before we jump into the specifics of these accounts, let’s talk about one big factor that affects how you’ll contribute to each specific account – your age.

Here’s how your age affects the 4 accounts

Let’s get a quick refresher on how CPF works. Every month, both you and your employer contribute to your CPF.

For most people (under 55 years and earning less than $6,000 SGD a month), you’ll contribute 20% of your salary.

So if you’re getting paid $5,000 SGD per month, you’ll take home $4,000 SGD and contribute $1,000 SGD to your CPF.

On top of that, your employer will contribute 17% of your salary to CPF on your behalf. So if your monthly salary is $5,000 SGD, that means your employer will contribute a further $850 SGD.

Add both you and your employer’s contribution together, and that’s 37%. For the person earning $5,000 SGD, that’s $1,850 SGD going into CPF per month.

Still with us? Good.

Now, the first thing you need to understand is that the older you get, the lower the contributions you get from your employer. Check out the table below.

Contribution rates from 1 January 2022 for monthly wages of $750 SGD and above

Source: CPF Board

Why is the employer’s contribution lowered? The official rationale is so that older workers remain affordable for employers to hire.

The second thing you need to understand is that your age also affects the allocations of the contributions to your OA, SA and MA. 

Example: If you’re 35 or below, then 23% goes to your OA, 6% to your SA, and 8% to your MA. See below for the full allocation rates.

Ratio of your total CPF contributions to your OA, SA, and MA accounts by age

Source: CPF Board

You have more expenses like housing when you're younger, so more money will go towards your OA. As you get older, you’ll need to save more aggressively for retirement, so more will go towards your SA. Similarly, the allocation to your MA also goes up with age as your medical expenses are likely to increase.

(If you’re wondering why RA is not mentioned – it’s because your contributions don’t go directly into it. More on that later!)

How much interest does money in my CPF accounts earn? 

In most circumstances, the interest rates are:

• Ordinary Account (OA) Interest Rate – 2.5%
  
• Special Account (SA) Interest Rate – 4%
• MediSave Account (MA) Interest Rate – 4%
• Retirement Account (RA) Interest Rate – 4%

Unlike the contribution rates, your age doesn't affect the interest rates. But it's worth remembering that these interest rates aren't fixed, as the CPF Board reviews these rates each quarter.

How does extra interest work?

On top of the rates listed above, the government also pays extra interest, with the amount based on your age.

If you’re 55 and below, you’ll earn an extra 1% on the first $60,000 SGD of your combined CPF balance, capped at $20,000 SGD for the OA.

So if you have $20,000 SGD in your OA and $50,000 SGD in your SA, the full sum in your OA ($20,000 SGD) and part of your SA ($40,000 SGD out of $50,000 SGD ) will earn that extra interest.

But if you have $40,000 SGD in your OA and $30,000 SGD in your SA, only a part of your OA (the cap of $20,000 SGD) and the full sum in your SA ($30,000 SGD) will earn that extra interest.

That extra interest that your OA earns then flows into your SA to enhance your retirement savings.

And if you’re above 55, you can earn an extra 2% on your first $30,000 SGD and an extra 1% on the next $30,000 SGD of your combined CPF balance, capped at $20,000 SGD for the OA.

And here’s one final point: your combined balance is made up by adding the balance of your accounts in the below order:

1. RA, including any CPF LIFE premium balance
2. OA, with a cap of $20,000 SGD
3. SA
4. MA

A deep dive into the different CPF accounts:

1. Ordinary Account (OA)

Interest rates for the Ordinary Account

• Age 55 and below: 3.5% on the first $20,000 and 2.5% for the rest.
• Above age 55: It depends on how much you have in your RA. The interest rate can vary between 3.5% and 4.5% on the first $20,000, and 2.5% for the rest.

Ordinary Account allocation by age

 Purpose of the Ordinary Account

• Housing: You can use this account for your down payment, stamp duties, legal fees, and monthly mortgage payments.
• Insurance: You can pay for your Dependants’ Protection Scheme (DPS) and Home Protection Scheme premiums.
• Investments: you can buy financial products such as ETFs, unit trusts/digital advisors, annuities, and others that’s part of the CPF Investment Scheme (CPFIS). 
  
• Education: You can take an education loan through your OA to pay for your own/children’s/spouse’s/siblings’/relatives’ education.
  

Check out our guide on all you need to know about the OA for more details on investment rules.

2. Special Account (SA)

Interest rates for the Special Account

• Age 55 and below: 5% for a portion of your SA (depending on how much you have in your OA) and 4% for the rest.
• Age 55 and above: The interest rate can vary between 5% and 6% for a portion of your SA (depending on how much you have in your RA and OA) and 4% for the rest.

Special Account allocation by age

Purpose of the Special Account

• Retirement savings: Your SA returns higher interest rates than your OA does, helping your retirement funds grow at a faster pace.
• Retirement-related financial products: You can use your SA to invest in "safer" financial products like unit trusts and annuities but not stocks and Gold-related investments, unlike the OA.

Just remember that transferring money from the OA to SA earns you a higher interest rate, but that any transfers you make into your SA are irreversible.

MediSave Account (MA)

Interest rates for the MediSave Account

• Age 55 and below: 5% for a portion of your MA (depending on how much you have in your OA and SA) and 4% for the rest.
• Above age 55: Between 5% and 6% for a portion of your MA (depending on how much you have in your RA, OA, and SA) and 4% for the rest.

Medisave Account allocation by age

Purpose of the Medisave Account

• Medical expenses: You can use your MA for any hospitalisation, day surgery, and certain outpatient costs at approved medical facilities.
• You can also use your MA to pay for medical expenses for approved dependants, including your spouse, children, parents, grandparents, and siblings.
• Health insurance: Your MA can pay for Integrated Shield Plan and Medishield Life premiums.

Just note that there’s a cap for the amount of money that you can have in your MA, and this amount is reviewed each year. Currently, once you reach the cap of $63,000 SGD, the rest will flow into your SA or RA.

Retirement Account (RA)

The Retirement Account doesn’t exist at the start of your CPF journey, but it’s created for you once you turn 55. Here’s how it works:

At age 55, you decide how much you want your monthly payout to be under CPF LIFE. That determines the amount of money you have to contribute to your RA. There are 3 retirement sums you can choose from: the Basic Retirement Sum, Full Retirement Sum, or Enhanced Retirement Sum.

Funds from your SA will channel into your RA to make up your chosen retirement sum. And if that’s not sufficient, your OA will kick in to continue funding your RA.

You’ll still earn interest on your RA, too. That amount is 6% on the first $30,000 SGD, 5% on the next $30,000 SGD, and 4% for the rest.

Then, once your RA has been funded, you can do a CPF withdrawal on whatever’s left from your OA and SA. Once you reach this milestone, you can finally tell your friends, “I collected my CPF!”.

You may also be interested in:

• CPF Retirement Sum: The Key to Your Golden Years
• What is the Supplementary Retirement Scheme, or SRS?
• How Much Do You Need to Save for Retirement?