Maximising Your Retirement: When to Transfer from CPF OA to SA

The Central Provident Fund (CPF) is a mandatory savings scheme in Singapore that helps citizens and permanent residents save for retirement, healthcare, and housing. The CPF system is divided into several accounts, each serving different purposes: the Ordinary Account (OA), Special Account (SA), MediSave Account (MA), and Retirement Account (RA).

Optimising CPF savings is essential for a comfortable retirement, given Singapore's high cost of living and increasing life expectancy. By strategically managing CPF funds, individuals can ensure they have sufficient savings to support their retirement needs.

Transferring funds from the CPF OA to the SA is a strategic move to maximise retirement savings. The SA offers higher interest rates than the OA, allowing for greater growth through compounding interest. This transfer helps focus savings on retirement, ensuring long-term financial security.

Recap of CPF OA vs SA

Note: The Government has extended the 4% floor rate for interest earned on all Special, MediSave, and Retirement Account savings until 31 December 2025. ​

For more detailed information on CPF interest rates, you can visit the official CPF Board website. ​

The CPF Ordinary Account (OA) is a versatile account that serves multiple purposes, including housing, education, insurance, and investments. The OA earns a base interest rate of 2.5% per annum. Additionally, members earn an extra 1% interest on the first $60,000 of their combined CPF balances, with up to $20,000 from the OA. This means the OA can earn up to 3.5% per annum on eligible balances. 

The CPF Special Account (SA) on the other hand is specifically designed for retirement savings. Its primary purpose is to help individuals accumulate funds for their retirement years. The SA offers a base interest rate of 4% per annum. Members earn an extra 1% interest on the first $60,000 of their combined CPF balances, which can include amounts in the SA. For members aged 55 and above, an additional 1% interest is paid on the first $30,000 of their combined balances, bringing the total possible interest to 6% per annum on eligible balances. This higher interest rate, combined with the power of compounding, makes the SA an excellent vehicle for growing retirement savings over the long term. 

So, What are The Advantages of Moving OA to SA

A Safe & Secure Way to Grow Your Retirement Savings

Transferring funds from your CPF Ordinary Account (OA) to your Special Account (SA) is a secure and effective strategy to boost your retirement savings. The SA offers a higher interest rate, currently at 4.0%, compared to the OA's 2.5%. This difference might seem small, but over time, it significantly increases your savings due to the power of compound interest. 

This higher return is particularly beneficial since there are not many risk-free investment options that can match the SA's rate. Moreover, your CPF savings are backed by the Singapore government, making them one of the safest places to park your money.

Maximising the Power of Compound Interest

One of the biggest advantages of transferring from the OA to the SA is maximizing the benefits of compound interest. Let's consider the impact over 20 years:

• Ordinary Account (OA): At an interest rate of 2.5%, $10,000 would grow to approximately $16,386
• Special Account (SA): At an interest rate of 4.0%, the same $10,000 would grow to approximately $21,911

This shows a difference of $5,525 due to the higher interest rate and compounding effect.

If we scale this to a larger amount, such as $30,000:

• OA: $30,000 would grow to approximately $49,158 over 20 years.
• SA: $30,000 would grow to approximately $65,734 over 20 years.

Here, the difference is around $16,576, demonstrating how significantly more your money can grow in the SA.

Achieving the Full Retirement Sum (FRS) Faster

The CPF Full Retirement Sum (FRS) is a benchmark set by the CPF Board to ensure that Singaporeans have sufficient savings for a basic retirement. For 2025, the FRS is $213,000. This amount increases yearly by about 3.5% to account for inflation and is projected to continue until at least 2027.

Source: CPF

* From 1 Jan 2025, the ERS was increased to four times the BRS to allow members to commit more savings for higher payouts.

Monthly Payouts:

Setting aside these amounts in your Retirement Account (RA) at age 55 can provide the following estimated monthly payouts from age 65:​

• BRS: Approximately $840 - $900​
• FRS: Approximately $1,560 - $1,670​
• ERS: Approximately $2,280 - $2,450

Impact of CPF Contribution Rate Increases (From 1 Jan 2026)

The CPF contribution rates for older workers (aged 55 to 65) will increase by 1.5 percentage points starting 1 January 2026. This means a higher percentage of your salary will go toward CPF savings, particularly into your Retirement Account (RA), helping you reach the FRS faster.

📌 The additional contributions will be fully allocated to the Retirement Account (RA) to boost retirement savings directly.

How This Helps You Reach FRS Faster

• Higher contributions from 2026 → More savings directed into CPF accounts, accelerating FRS accumulation.
• CPF interest rates (up to 6%) → The extra savings grow faster through compounding effects.
• CPF Transition Offset → The government will cover half of the increase in employer contributions in 2026 to help businesses manage costs.

What Happens When You Reach the FRS?

Once you accumulate the FRS in your Retirement Account (RA):

✅ No need to transfer funds from your Ordinary Account (OA) to Special Account (SA) or make cash top-ups.

✅ Continued CPF SA contributions beyond the FRS, growing your savings further.

✅ Higher CPF LIFE monthly payouts when you retire.

What about The Disadvantages of Moving OA to SA

Transfer is Irreversible

While the higher interest rates of the SA are appealing, it's crucial to remember that the transfer from OA to SA is irreversible. Once the funds are moved, you cannot use them for housing down payments, monthly mortgage payments, or investments. If a significant portion of your OA funds has recently been used for a housing down payment or you rely on your OA for future mortgage payments, transferring these funds to the SA may not be advisable at this time.

Loss of Potential Investment Options

Transferring funds to the SA means losing access to certain investment opportunities available through the OA. While SA funds can still be used for some investments, there are stricter limitations compared to the OA. For instance, OA funds can be invested in individual stocks and REITs on the SGX market, providing potentially higher returns and more flexibility. However, SA funds cannot be used for these types of investments, limiting your investment options.

Higher Mortgage Payments for Future Housing Upgrades

The irreversible nature of the transfer from OA to SA can lead to higher mortgage payments if you plan to upgrade your housing in the future. If you intend to sell your first flat after the Minimum Occupation Period (MOP) and have transferred your OA funds to SA, you might face higher mortgage payments if the new property is more expensive. With fewer funds in your OA to cover the new property's down payment, you may need to take out a larger housing loan, resulting in higher monthly payments.

To avoid this scenario, ensure that your net sale proceeds and remaining OA funds are sufficient to cover a portion of the cost of the new property. Proper planning is essential to prevent significantly higher mortgage payments when upgrading your home.

Steps to Transfer from CPF OA to SA

Transferring your CPF funds from the Ordinary Account (OA) to the Special Account (SA) is a straightforward process. Here’s a step-by-step guide to help you through the transfer:

Step 1: Log in to CPF Online Services

• Visit the CPF website (www.cpf.gov.sg) and log in using your SingPass credentials.

Step 2: Navigate to the Transfer Service

• Once logged in, go to the “My Requests” section.
• Select “Building Up My CPF Savings.”
• Click on “Transfer my OA savings to SA.”

Step 3: Review Eligibility and Information

• Review the information provided on the transfer page to ensure you understand the terms and conditions.
• Confirm that you meet the eligibility criteria for the transfer.

Step 4: Calculate Transferable Amount

• Use the CPF transfer calculator available on the website to determine how much of your OA savings you can transfer to your SA.
• This calculator will consider factors such as the current balance in your accounts and the Full Retirement Sum (FRS) limit.

Step 5: Initiate the Transfer

• Enter the amount you wish to transfer from your OA to your SA.
• Double-check the entered amount and confirm the transfer.

Step 6: Confirmation and Acknowledgment

• After submitting your transfer request, you will receive a confirmation message.
• An acknowledgment will also be sent to your registered email address.

Step 7: Monitor Your Account

• The transferred amount should reflect in your SA within a few working days.
• Log in to your CPF account to verify the transfer and check the updated balances in your OA and SA.

Other Tips for Maximising Retirement Savings

Aside from transferring your CPF OA funds to your SA, there are several other effective strategies to grow your retirement payouts. 

1. Make Cash Top-Ups to Your CPF Special Account (SA) or Retirement Account (RA)

Voluntary cash top-ups to your CPF SA (if you are below 55) or RA (if you are 55 and above) can significantly boost your retirement savings due to the power of compounding interest. Additionally, such top-ups may qualify for tax relief. However, starting from 1 January 2025, there are important changes to note:​

• Tax Relief Eligibility: You can enjoy tax relief of up to $8,000 per calendar year for cash top-ups made to your own SA or RA. An additional tax relief of up to $8,000 per year is available for top-ups made to your family members' accounts, totaling a maximum of $16,000 per year. 
• Matched Retirement Savings Scheme (MRSS): Cash top-ups that attract the MRSS matching grant will not qualify for tax relief, as the matching grant itself is a significant benefit.

2. Leave Your CPF Savings Alone to Grow Your Retirement Income

When you reach 55, it can be tempting to make a lump sum withdrawal from your CPF savings. However, if you don't have an urgent need for that money, consider leaving it in your CPF accounts. By doing so, you allow your savings to continue growing through compound interest, which can significantly enhance your retirement income.

Payouts will be higher if members do not make a lump sum withdrawal before age 65. For members eligible to start their payouts at age 65 under the CPF LIFE Standard Plan, delaying withdrawals ensures that their retirement savings benefit from additional years of interest accumulation. It's important to note that age 70 is the latest payout start age.

Making withdrawals from age 55, such as the unconditional withdrawal of up to $5,000 or any withdrawals exceeding the required retirement sums, can reduce the overall amount available for future payouts. By refraining from these withdrawals, you maximise the growth potential of your retirement savings, resulting in higher monthly payouts when you eventually start receiving them.

3. Defer Your Retirement Payouts

Did you know that you don’t have to start your CPF payouts as soon as you turn 65? You have the flexibility to choose when to begin receiving your payouts anytime between the ages of 65 and 70. If you have other sources of income and don't need the CPF payouts immediately, deferring them can be a smart move.

By delaying your payouts, you give your retirement savings more time to grow. This means you will eventually receive larger monthly payouts. For each year that you defer, your payouts can increase by up to 7%. This additional growth can make a significant difference in your financial security during retirement.

Interestingly, an increasing number of CPF members have opted to defer their payouts in recent years, recognizing the benefits of allowing their savings to compound further. By waiting a few more years, they ensure a more substantial and steady income stream in their later years, enhancing their overall retirement planning strategy.

Source: CPF

Secure Your Retirement Today

Retirement is a crucial milestone, but the journey to get there is equally important. Balancing current needs while saving for the future starts with small steps, like the ones mentioned above.

Each small step you take can make a significant impact over time. Start growing your future savings today – your future self will thank you.

Deciding whether to transfer your OA funds to your SA depends on your housing plans. If you rely on your OA for mortgage payments, ensure you have 2 to 3 years of payments saved in your OA before transferring any excess to your SA. This maintains flexibility for unexpected financial situations.

If you don't foresee using your OA funds for housing or other expenses before age 35, transferring them to your SA can significantly boost your retirement savings. Achieving the Full Retirement Sum (FRS) early allows your funds to grow more effectively, especially if you continue working and contributing to your CPF.

For those with a low-risk appetite, the SA offers a secure way to earn higher returns on your CPF funds. Alternatively, investing in T-bills can provide a safe option for higher returns without transferring to the SA.

In conclusion, thoughtful management of your CPF funds today can ensure a secure and comfortable retirement. Start making informed decisions now to build a stable financial future.