Investing your CPF Money in Singapore – Be Smart

A survey in 2014 found that most Singaporeans are worried about the state of their retirement. Let’s face it, somewhere at the back of our mind, we’re all worried we’ll end up like that one old woman in ‘Money No Enough’, and perhaps we should be worried. We don’t have to tell you that Singapore is facing a rapid aging population – elderly Singaporeans are working to support themselves in whatever way possible, from selling packets of tissues to driving taxis well into their late 60’s.

Investing your CPF Money in Singapore

Living in Singapore isn’t cheap and neither will retirement be. With CPF interest rates staying unchanged at 2.5% in this quarter, some of you may be looking for ways to get more bang for your CPF buck. The CPF Investment Scheme (CPFIS) is a great program that allows you to invest your CPF money in approved assets. The idea is that if you can earn more than you would in CPF and you don’t mind taking the risk, then you can do so – with certain conditions, of course.

So do I meet these conditions?

Generally the most basic conditions are:

1. You have more than:
   1. $40,000 in your CPF Ordinary Account (OA) – If you intend to use your OA funds for investment.
   2. $20,000 in your CPF Special Account (SA) – If you intend to use your SA funds for investment.
2. You are not an undischarged bankrupt.
3. You’re at least 18 years old.

Ok, so how do I get started?

So, if you were nodding your head while reading the CPFIS conditions, then congratulations, you qualify to invest through CPFIS. For those of you who intend to invest money from your OA, you’re going to have to setup an account with one of the three local banks – DBS, UOB or OCBC.

Once your account is set up, you’ll be ready to open accounts with a broker of your choosing to invest through, most of these banks have their own brokerages, but for those who don’t mind, Kim Eng Securities boasts an award winning mobile trading platform and KE Trade Pro is definitely a great online system for trading stocks.

For those of you using your SA to invest, you can approach product providers directly – or if you see an insurance agent on the street, they’ll probably approach you directly.

What’s the difference between using my OA and SA to invest?

Investments made under OA and SA are both governed by different restrictions, generally investments made using funds from your OA can be used for a wider variety of investments, while investments made using your SA are more restricted to “Safer” asset classes. Here are more details:

Things to take note of

1. Investments made under CPFIS are not guaranteed by the CPF board, so do your own homework and be mindful of the risks that you’re putting yourselves in.
2. Any profits made by investments under CPFIS will be returned to your CPF account. Once the profit has been returned to your CPF account, it will be treated the same way as any other funds in your CPF account.

Not all stocks can be purchased using CPFIS, to find out which stocks you can purchase using CPFIS, take a look here.

Find out how much you need to retire with our Retirement Calculator!