If you are a Singapore Permanent Resident, one of the most financially impactful decisions you can make is what to do with the money accumulating in your CPF Ordinary Account. Honestly, most PRs leave their entire CPF OA balance sitting at 2.5% per annum — the default interest rate — year after year, unaware that they have the option to invest it in a broad range of approved instruments that may deliver significantly better long-term returns. This guide tells you exactly what your options are, what the research says about CPF investment strategy and how to get started.
The CPF Investment Scheme (CPFIS) allows Singapore Citizens and Permanent Residents to invest their CPF Ordinary Account savings above SGD 20,000 and Special Account savings above SGD 40,000 in a range of approved financial products — including ETFs, unit trusts, shares, bonds and endowment insurance. Understanding whether, when and how to use CPFIS is one of the most important personal finance decisions for long-term Singapore residents. This complete guide covers the CPFIS framework, the best investment options available, the Endowus platform that has transformed CPF investing in Singapore and an honest assessment of when CPF investment genuinely makes sense.
CPF Account Types — Quick Recap
Before investing CPF funds, understanding which account holds what money is essential. Read our complete CPF guide for expats for the full picture — here is the quick summary:
| Account | Default Interest | Primary Use | CPFIS Investable? |
|---|---|---|---|
| Ordinary Account (OA) | 2.5% p.a. | Housing, education, investment | ✅ Above SGD 20,000 |
| Special Account (SA) | 4.0% p.a. | Retirement savings | ✅ Above SGD 40,000 (limited products) |
| MediSave Account (MA) | 4.0% p.a. | Healthcare costs | ❌ Cannot invest |
| Retirement Account (RA) | 4.0% p.a. | CPF LIFE payouts | ❌ Cannot invest |
CPF Investment Scheme (CPFIS) — How It Works
The CPFIS allows you to invest your CPF OA balance above SGD 20,000 in approved investment products. Here is how the scheme works in practice:
-
Eligibility
You must be a Singapore Citizen or Permanent Resident with at least SGD 20,000 in your CPF OA (for OA investing) or SGD 40,000 in your SA (for SA investing). As a new PR, you need to build your CPF balance before CPFIS investing becomes available — this typically takes 1 to 2 years of contributions depending on your salary level. -
Open a CPFIS investment account
You need a CPFIS investment account with one of the three approved CPFIS agent banks — DBS, OCBC or UOB. This is separate from your regular bank account and specifically holds your CPF investment funds. Opening takes 15 to 30 minutes in-branch or online at your chosen bank. -
Transfer investable CPF funds
Once your investment account is open, transfer your investable CPF OA balance (the amount above SGD 20,000) to the investment account. This transfer can be done online through your CPF portal at cpf.gov.sg using SingPass. -
Select and purchase approved investments
Use your CPFIS investment account to purchase from the approved investment universe — ETFs, unit trusts, Singapore shares, bonds and more (detailed below). Investment decisions are yours — you are responsible for your own portfolio selection. -
Monitor and rebalance periodically
Review your CPFIS portfolio annually and rebalance if your allocation has drifted significantly from your target. Unlike your cash investment portfolio, you cannot access CPFIS funds until retirement age — so a long-term perspective is appropriate.
What Can You Invest In With CPFIS?
| Investment Type | OA Investable? | SA Investable? | Notes |
|---|---|---|---|
| ETFs (approved list) | ✅ Yes | ✅ Yes | Most popular CPFIS investment |
| Unit Trusts / Funds | ✅ Yes | ✅ Yes | Wide selection including global equity |
| Singapore Government Bonds | ✅ Yes | ✅ Yes | Low risk, modest returns |
| Singapore Shares (SGX) | ✅ Yes | ❌ No | Individual stocks — OA only |
| Singapore REITs | ✅ Yes | ❌ No | Listed on SGX — OA only |
| Endowment Insurance | ✅ Yes | ✅ Yes | Check carefully — fees can be high |
| Gold ETF | ✅ Yes (up to 10% of OA) | ❌ No | Limited to 10% allocation |
| Structured Deposits | ✅ Yes | ❌ No | Complex — generally not recommended |
Endowus — The Game-Changer for CPF Investing
Endowus has transformed CPF investing in Singapore and deserves significant attention in any honest CPF investment guide. It is the only MAS-licensed digital financial advisor in Singapore that allows you to invest your CPF OA and SA funds, SRS funds and cash all through one platform — with institutional-quality fund access and full rebating of trailer fees back to investors.
š¤ What Makes Endowus Different
Most unit trusts sold through banks and financial advisors include trailer fees — annual commissions paid to the distributor out of the fund's assets. Endowus rebates 100% of these trailer fees back to investors in the form of additional fund units. This single feature can add 0.3% to 0.7% per annum to your effective returns versus buying the same funds through a bank.
Annual advisory fee: 0.25% to 0.60% p.a. depending on portfolio size
Website: endowus.com
š Endowus CPF Portfolios
Endowus offers a range of evidence-based CPF portfolios constructed from low-cost institutional share classes of global equity and bond funds. The Core portfolios range from 100% equities (highest risk, highest expected return) to 20% equities / 80% bonds (lowest risk). Choose based on your investment timeline and risk tolerance — most CPF investors with 15+ years to retirement can tolerate the 60% to 100% equity portfolios.
š” Endowus Fund Smart
Beyond the managed portfolios, Endowus also allows you to invest CPF funds in specific approved unit trusts — the "Fund Smart" feature. This gives you access to institutional share classes of funds including Dimensional Fund Advisors (DFA) funds which are otherwise inaccessible to retail investors. DFA funds are evidence-based, academically grounded and very competitively priced.
⚙️ How to Access Endowus
Register at endowus.com using SingPass. Connect your CPF account through the CPF portal. Select your preferred portfolio and transfer your investable CPF OA balance. The entire process takes approximately 30 minutes and your investment is typically activated within 2 to 3 business days. Minimum investment is SGD 1,000.
Best ETFs Available Through CPFIS
If you prefer to invest directly in ETFs rather than through Endowus managed portfolios, here are the most commonly used CPFIS-approved ETFs:
| ETF | What It Tracks | TER | Why Consider It |
|---|---|---|---|
| Nikko AM STI ETF | Straits Times Index (Singapore) | 0.30% p.a. | Singapore equity exposure, low cost |
| SPDR STI ETF | Straits Times Index (Singapore) | 0.30% p.a. | Alternative to Nikko STI ETF |
| Nikko AM Shenton Short Term Bond SGD | SGD short-term bonds | 0.30% p.a. | Conservative, low-risk allocation |
| Lion-OCBC Securities Hang Seng TECH ETF | Hong Kong technology stocks | 0.69% p.a. | Asia tech exposure — higher risk |
| Global X China Electric Vehicle ETF | China EV sector | 0.68% p.a. | Thematic — high risk, high volatility |
The OA vs SA Investment Decision
One of Singapore's most debated personal finance topics is whether to invest your CPF OA or leave it at 2.5%. Here is the honest framework:
š The Case for Investing CPF OA
Over long investment periods (15+ years), diversified global equity has historically delivered annual returns of 7% to 10% — significantly above the 2.5% OA rate. If you are a younger PR (under 45) with many years until retirement, the long-term compounding advantage of higher returns on your CPF OA balance is substantial. A SGD 100,000 CPF OA balance growing at 2.5% for 25 years becomes SGD 185,000. At 7% it becomes SGD 543,000 — a difference of SGD 358,000.
š”️ The Case for Leaving OA at 2.5%
The 2.5% CPF OA rate is risk-free and government-guaranteed. Investment returns are not guaranteed — equities can fall 30% to 50% in bear markets and take years to recover. If you plan to use CPF OA for housing in Singapore, those funds need to be stable and available. For older PRs closer to retirement, the risk-adjusted case for equity investment weakens. Some financial advisors argue that for CPF OA specifically, the guaranteed 2.5% is not as inferior as it appears given the zero risk.
CPF Special Account — Investment Considerations
Your CPF Special Account earns a guaranteed 4% per annum — significantly higher than the OA rate and comparable to or better than many fixed-income investments. This makes the CPF SA investment decision different from the OA decision:
- The 4% SA rate is already competitive with most bond funds and many balanced investment portfolios after fees
- SA funds can only be invested in a limited range of instruments — primarily unit trusts and certain endowment products
- SA funds invested outside CPF lose the 4% guaranteed return — any investment must reasonably be expected to beat 4% risk-adjusted to be worth doing
- Most financial advisors recommend leaving SA in the default 4% unless you have very long investment horizon (20+ years) and high risk tolerance for equity exposure
- SA Shielding — a strategy of maxing out SA before age 55 to protect the higher SA interest rate — is worth understanding for long-term Singapore residents
CPF LIFE — Understanding Your Retirement Payout
For Singapore PRs planning to retire in Singapore, understanding CPF LIFE (Lifelong Income For the Elderly) is essential context for all CPF investment decisions:
- What it is: A national annuity scheme that provides monthly payouts from age 65 for life
- How it works: At age 55, your OA and SA are combined into a Retirement Account. At age 65, CPF LIFE begins paying a monthly income for life based on your RA balance
- Full Retirement Sum (FRS): The target RA amount for standard monthly payouts — approximately SGD 200,000 as of 2026, revised annually
- Basic Retirement Sum (BRS): Lower target for those with Singapore property — approximately SGD 100,000
- Monthly payouts (FRS, CPF LIFE Standard Plan): Approximately SGD 1,500 to SGD 1,700 per month from age 65
Understanding your projected CPF LIFE payout helps you determine how much additional retirement savings you need to accumulate through your cash investment portfolio. Read our complete investment guide for expats for the cash investment strategy that complements your CPF retirement planning.
Common CPF Investment Mistakes to Avoid
- Investing CPF OA needed for housing: If you plan to purchase Singapore property using CPF, keep sufficient OA balance available. Using CPFIS funds for housing purchases requires selling your investments — potentially at an unfavourable time.
- High-fee endowment products: Some endowment insurance products sold as CPFIS-approved investments have high fees and surrender charges that significantly erode returns. Always check the Total Expense Ratio (TER) and any surrender charges before committing CPF funds to any insurance-linked product.
- Over-trading: CPFIS is a long-term retirement fund. Frequent trading based on market timing consistently destroys value versus a passive buy-and-hold approach. Set your allocation, invest systematically and review annually — not monthly.
- Ignoring the SA top-up benefit: Before investing CPF OA, consider whether topping up your SA or your spouse's SA (via cash voluntary contributions) delivers better returns — the guaranteed 4% SA rate is compelling and SA top-ups provide additional income tax relief. Read our Singapore income tax guide for the tax relief implications.
Frequently Asked Questions
Yes. Singapore PRs can invest their CPF Ordinary Account balance above SGD 20,000 and Special Account balance above SGD 40,000 through the CPF Investment Scheme (CPFIS). You need to open a CPFIS investment account at DBS, OCBC or UOB and register your investment account with CPF Board. New PRs need to build their CPF balance through monthly contributions before the SGD 20,000 threshold is reached — this typically takes 1 to 2 years depending on salary level.
Endowus is a MAS-licensed digital financial advisor that allows you to invest your CPF OA and SA funds, SRS funds and cash through one platform. Its key advantage is 100% rebating of trailer fees from unit trusts back to investors — adding 0.3% to 0.7% per annum to effective returns versus bank-distributed funds. Endowus offers globally diversified CPF portfolios from 100% equities to conservative balanced allocations. Advisory fee is 0.25% to 0.60% p.a. depending on portfolio size. Minimum investment SGD 1,000. Website: endowus.com.
It depends on your investment timeline and housing plans. If your timeline is 15 or more years, you do not plan to use CPF for housing, and you can tolerate investment risk — investing your CPF OA surplus above SGD 20,000 in globally diversified equities through Endowus has historically delivered significantly better long-term returns than the 2.5% default rate. If you plan to use CPF for property, need stability or are closer to retirement, the guaranteed 2.5% risk-free return is a genuinely good outcome. There is no universally correct answer — the right decision depends on your specific circumstances.
If you permanently leave Singapore and give up PR status, you can withdraw your entire CPF balance including any CPFIS investments — the investments are sold at prevailing market prices and the proceeds plus your CPF balance are paid out to you. If you leave temporarily but retain PR status with a valid Re-Entry Permit, your CPF and CPFIS investments continue running normally while you are away. Tax implications on CPF withdrawal depend on your tax residency situation and home country tax treaty with Singapore — consult a tax professional before making this decision.
CPFIS-OA allows you to invest the CPF Ordinary Account balance above SGD 20,000 in a broader range of products including ETFs, unit trusts, Singapore shares, REITs and bonds. CPFIS-SA allows investment of the Special Account balance above SGD 40,000 but in a more limited range — primarily unit trusts and certain endowment products — and only those on the CPFIS-SA approved list. SA investments must convincingly beat the guaranteed 4% SA interest rate to be worthwhile, which makes the investment bar significantly higher than for OA investing.
Official Resources
- š° CPF Board — CPFIS: cpf.gov.sg/cpfis
- š° CPF Approved Investment Products: cpf.gov.sg/approved-products
- š Endowus Singapore: endowus.com
- š️ MAS — CPFIS Regulations: mas.gov.sg
Final Thoughts
The CPF Investment Scheme gives Singapore PRs a genuinely powerful tool for accelerating long-term wealth accumulation — if used thoughtfully and with appropriate investment products. The key is understanding exactly what you are trying to achieve, selecting low-cost globally diversified investments through a platform like Endowus and maintaining a long-term perspective that CPF funds are primarily for retirement rather than short-term financial goals.
Do not let your CPF OA balance simply sit at 2.5% by default without at least considering whether CPFIS makes sense for your situation. The compounding difference over a 20 or 25-year working career in Singapore is substantial — this is one of the most impactful personal finance decisions available to Singapore PRs and it takes less than an hour to set up correctly.
Questions About Investing Your CPF Savings?
Drop a comment below — CPFIS mechanics, Endowus experience or specific investment questions. Browse more Singapore finance guides at ExpatWiki.
Comments
Post a Comment