What Is CPF Special Account? 9 Things Every Singaporean Ought To Know About It

CPF Special Account: 9 Things Every Singaporean Ought To Know About – 2020

Bowen Khong
Bowen Khong

Singaporeans have one of the most comprehensive social security mechanisms in the world called the Central Provident Fund (CPF).

Not only that, Singaporean employees also have the CPF Special Account.

If you are one of those who are not familiar with either CPF or the CPF Special Account, then this article is for you. 

We have a comprehensive guide on CPF Special Account to help you understand this extremely helpful system. But before we jump into that, let us first cover the basics of its foundation, the CPF and why it's so important that YOU as the reader understand it. 

What is CPF exactly?

CPF, otherwise known as the Central Provident Fund (Board), is a mandatory investment scheme for all employed Singaporeans. It is a comprehensive social security system that allows working Singapore Citizens and Permanent Residents to appropriate funds for retirement.

CPF Funds are split into the following accounts:

  • Ordinary Account (OA) – This is meant for housing, insurance, investment and education
  • Special Account (SA) – This is meant for old age and investment in retirement-related financial products
  • Medisave Account (MA) – This is meant for expenses in hospitalisation and other approved medical insurances.
  • Retirement Account (RA) – This is created on your 55th birthday


Your CPF Savings account can earn a guaranteed interest rate each year. Initially, your OA’s interest rate is 2.5%, while the rest is at 4% i.e Special Account and Medisave Account.

However, there will be an additional one percent added to all of the accounts only for the first $60,000 CPF balances, of which $20,000 limited to your OA.

In other words, if you have a balances of $70,000 you will be earning 1% more from the $60,000 (the 1% extra in OA is limited to $20,000), and the remaining $10,000 follows the guaranteed rate. 

Savings in your CPF accounts earn what is called a floor interest rate since these are invested under Singapore Government Securities. This is guaranteed itself by the Singapore Government.

What is CPF Special Account?

Now that we’ve familiarized ourselves with the basics of CPF, let us now head on to one of its specific usage: CPF Special Account.

We found out before that the CPF Special Account is meant for financial needs after retirement as well as for the investment in retirement-related financial products.

It primarily exists to gear Singaporeans to save for future retirement needs since it enjoys a higher interest rate of 4%. 

What are the features of CPF Special Account?

The CPF Special Account features the following:

  • Savings will be for regular income after retirement and for investing in approved investment products. The full list as of 2018 can be found here
  • Savings in Special Account will be guaranteed absolute, reliable returns. at a floor rate of 4%. and up to 5%. 
  • CPF Special Account’s interest rate will not be affected by inflation. People would consider this as a better alternative of investing money than stock-related instruments and those offered by insurance policies.
  • CPF Special Accounts savings cannot be withdrawn before the age of retirement.

What are the uses of CPF Special Account?

The savings in CPF Special Account beyond its minimum amount of S$40,000 can be invested in any of the approved investment schemes. It could also be invested in the following financial instruments:

Unit trusts
○ Investment-linked insurance products
○ Annuities
○ Endowment Policies
○ Singapore government bonds
○ Treasury bills

Note that you will not be able to invest in high risk financial instruments using the monies available in your CPF Special Accounts since the primary goal of the CPF Board is to ensure you have sufficient funds for your twilight years. Risking your capital is in direct conflict with the directive that the CPF Board wishes to go in as well in order to take care of Singaporean Citizens in their later years. 

The following financial products also cannot use the savings from CPF special account:

○ Shares
Corporate bonds
○ Property funds
○ Gold ETFs
○ Physical gold

If a person reaches the age of 55, the savings from the special and/or ordinary account will be transferred to the retirement account. This can then be used to join CPF Life which offers lifelong monthly payouts to CPF members.

Once the retirement sum is settled, the rest of the total amount left in both the ordinary and special accounts can be withdrawn or kept in the CPF account to earn attractive interest rates.

How to get the most out of Singapore CPF

Did you know that you can actually earn a million dollars with your CPF accounts? If your answer is no, then we’ll tell you how.

In its most basic sense, getting a million dollars would entail you to move the money from your OA into your SA. The reason for this is that the OA only gets you a guaranteed interest rate of 2.5%. Compare that to the SA which gets 4%.

As a result, the combined effect of 4% per annum can build up your cash reserves faster.

It must also be noted that there is a cap. to your Medisave Contribution (which is up to $49,800 as of 2016) and Special Account (which is up to S$166,000 as of 2018).

Finally, getting a million dollars is not time specific. It will take everyone a different amount time to actually get the amount. This depends, of course, on how much a person earns.

Advantages of Placing More Money in CPF Special Account

1. Guaranteed Absolute Return

As stated above, in the features of Special Account part, CPF Special Account beats inflation. It does not get affected nor fluctuate according to the index it is pegged to. This sets it apart from mutual funds or Exchange Traded Funds.

Usually, when you invest in something, you will most likely only get a chopped down return. What is worse, this scenario can happen again. It would take you a number of bad days to get through the good ones.

However, with CPF, you are guaranteed that the returns are absolute. You will get what the allocated percent presented to you. In relation of SA, you will get five percent; nothing more and nothing less.

2. Inflation-proof Interest Rate

Since CPF Special Account is a retirement fund, the interest rate must beat inflation for it to be useful. It can’t just go down until all you are left with is nothing. After all, what will its use be?

Fortunately, CPF does none of that. Being that it is by the Singapore government, CPF Special Account interest rate cannot be affected by inflation. It will not ever change.

Your five percent will remain to be five percent. No matter the financial situation of Singapore, you will definitely get the absolute and guaranteed rate.

This is far from other investment options where you only get around four percent. Furthermore, with Singapore Savings Bonds, you will get between two or three percent.

Therefore, CPF Special Account does not only beat inflation, it also beats other investment options.

3. Away from Creditors

If you are an active investor, then you might find this third advantage as tempting. Being involved in ForEx trading and other business could get you in risky situations—one with creditors who are willing to line up to get from you.

But with CPF, you can find a refuge from all of that. No one can take money from your CPF. Even if you go bankrupt, your CPF savings will remain safe.

Disadvantages of Transferring Money from Ordinary Account to Special Account

As everything goes, with advantages come disadvantages. And even transferring money from ordinary account to special account is not exempted. No matter how safe it is, it could still have its own negative side. These are as follows:

1. No Tax Relief

Transferring money from Ordinary account to your Special account does not exempt you from tax relief. You will still be subject to it typical tax reliefs unless you top up your account with cash. You can learn more here

2. Transfers are Permanent

While transferring cash into your CPF Special Account to earn a higher interest rate might sound positive, things can take a turn for the worse if you have a sudden need for cash . The process of transferring your savings from Ordinary account to Special account is irreversible. You can’t undo it. Be sure to have enough money on hand for your current and future needs prior to plunking money into your special account. 

3. Withdrawal Requirement

As mentioned above, savings in CPF Special Account cannot be withdrawn before the age of 55. It also cannot be withdrawn and utilize for other purposes like paying off mortgages of housing.

Ordinary Account to Special Account Savings Transfer Calculator

Before you go and spontaneously transfer your OA savings to SA, it helps to know the estimates of the amount to be transferred.

With the online calculator provided by the government, you can find the estimate to the additional interest that you might earn when you do transfer your savings from Ordinary Account to Special Account.

To do that, simply go to this website and fill in the required fields: https://www.cpf.gov.sg/esvc/web/schemes/oatosatransfer/oatosatransfer

Good luck and remember to always tweak things in a way that maximizes your benefits while mitigating your downsides!

Bowen Khong
Bowen Khong
Coffee, reading and big podcast follower.
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79 thoughts on “CPF Special Account: 9 Things Every Singaporean Ought To Know About – 2020”

  1. Hi, the additional 1% interest is only for the first 60k in the combined accounts (up to 20k from OA; the additional $200 in interest from OA will go into SA and MA) and not from the 60k onwards amount as stated in your article.

    See below for the information from the cpf website:

    These interest rates include an extra 1% interest paid on the first $60,000 of a member’s combined balances (with up to $20,000 from the OA). Extra interest received on monies in the OA will go into the member’s SA or RA to enhance his or her retirement savings. If a member is above 55 years old and participates in the CPF LIFE scheme, the extra interest will still be earned on his combined balances, which includes the savings used for CPF LIFE.

    CPF members aged 55 and above will also earn an additional 1% extra interest on the first $30,000 of their combined balances (with up to $20,000 from the OA). As a result, CPF members aged 55 and above will earn up to 6% interest per year on their retirement balances.

  2. Hi,

    You made a mistake. Excess of your Special Account (which is up to S$166,000 as of 2017) does not go to your OA. The S$166,000 is the limit to enjoy tax relief for cash top-up to your SA.

  3. Hi, can i know, what will happen if my special account has reach $166k when i was 45 yrs old,
    what will happen to my interest yearly??
    just curious to ask, Thank u

  4. This is a very informative article, thanks!
    Can i clarify what it means for the below point extracted from Special Account (SA) Advantages:
    “This is far from other investment options where you only get around four percent. Furthermore, with Singapore Savings Bonds, you will get between two or three percent.”

    Does it mean we can invest say $10K from SA and the total interest received will be 5%(from CPF SA interest) + 2%(from Singapore Savings Bonds interest) = total of $700 interest a year?
    Or when SA is used to pay the bond premium, that amount is no longer calculated for SA interest, ie total of $200 interest a year? If so, it is better to leave the monies in SA rather than buying the bond?

    • Hi Michelle,

      You cannot use SA to invest in SSB. even if you can, you are giving up 4% or 5% interest for 2% interest. not worth it

      Louis Koay

  5. Hi, at age 55 if your OA+SA balance exceeds the FRS/ERS etc., what % of OA and SA is transferred out to create the RA? Or is it in sequence (e.g. OA used up first, then SA)?

    Would be good to know in order to estimate how much OA is left for mortgage payments, or in SA gaining the 5%+ interest.

    Thank you!

  6. Can someone (63 years old) with a full Retirement Sum transfer from ordinary account to own special account or top up cash into own special account

  7. What happen when we hit the special account ceiling? Does it mean that the monthly CPF contribution will now goes only to OS and MSA?

  8. i need to withdraw 200k from CPF to tide over January month urgently, but I want to shield my SA for the highinterest it earns. Should I buy a annuities using the SA ,current bal is 51k, the (51k-40k)11 k and withdraw the 200k from SA and OA
    if there are sufficient bal in the combine oa and sa accounts.

    • Hi Lily,

      Assuming that your combined balance of OA and SA is above minimum sum, you can consider to use SA to invest in a fund to shield your SA for higher interest after age 55. At age 55, balance from OA will be transferred to RA for minimum sum. Once the transfer is done, you can choose to sell your SA investment and park it back to SA account.

      Louis Koay

  9. Hi,
    Can I use my medisave for my sister? She is recently hospitalised in Philippines due to haemoragic outburst aneurysm. Due to financial burden, hospital bills shoot up very high.

  10. Age :52
    SA : 230K
    OA :100K

    Want to take new housing bank loan now and do a deferred payment. for the bank loan after 55 yo… can I use the OA and SA to pay for the bank loan after setting aside the FRS/MRS after 55yo….?

    • Hi Micheri,

      My understanding is after age 55 and assuming you have set aside MS, your cash in OA and SA can withdraw anytime as cash. You can then use the cash to pay for your bank loan.

      Louis Koay

  11. Hi,

    I am wondering if I can transfer from OA to SA through mail or phone. I am not eligible to have an electronic account due to ex-PR issue. I have left Singapore for many years. Thanks!

  12. Hi,
    thank you very much for sharing this useful information.

    May I ask one question which really confusing me. as we know the CPF capped $37,740 annually. if I reached 37,740 by work contribution, am I still able to top-up $7,000 to my SA? or this top-up amount will be caculated into cap amount (for example, my current work contribution is $35,423, and I can only top-up $2,317)? in this case, if I already top-up $7,000, and lateron my work contribution will over the cap amount, will I still able to get the CPF contribution from my employer?

    Many thanks for your kindly reply

  13. SA=240k
    1. Turning 55, should I opt for ERS ($271k) when I reach 55 or just opt for FRS and top up to ERS later?
    2. I was advised to invest from SA and let the FRS taking from OA, so that when my investment is returned to SA, I have higher SA which earn a higher interest. Is it advisable?

    • Hi OK,

      1. if you opt for ERS at age 55, your CPF LIFE payout will be higher as compared to the other option
      2. Yes. this is possible. this is call SA shielding. your SA will be temporary invested. when reach age 55, your OA will be transferred to RA. You can then sell your SA investment and return the money back to SA.

  14. By the time of 65 yrs old will hit over 1 million in RA account, do you advise opt for ERS ( the highest scheme)? What about the balance sum in RA can be cash out anytime? What is your advise if you have over 1M inside your RA account and how would you plan?

    • Hi Eileen,

      It is really depending on how much you want to park in CPF LIFE. if you opt for ERS, you will receive higher payout for lifetime but you lose out on the liquidity as you cannot withdraw all ERS in lump sum.

      If I have 1M in CPF. I will opt for ERS as I believe that the balance will be more than enough for liquidity purpose. this is for me, you may have different preference.

      Louis Koay

  15. Hi, I am above 55 of age and has some cash to invest. I do not have high risk appetite. Can I put my cash into my SA (assuming I already set aside ERS)? How much interest will I earn from my SA and can I withdraw cash from my SA account?

    • Hi Kamal,

      If you are above 55, you cannot transfer from OA to SA. when you withdraw, you have to withdraw from SA first. 4% interest for SA.

      Louis Koay

  16. Hi Bowen,

    As of 7 Mar 2020, I just checked CPF’s website, there are no suitable ETF for investment using the CPFIS-SA.

    • You are right based on the Jan 2020 update. ETFs, Fixed Deposits and Stat Board bonds are still allowed just that there are no products available right now. We have amended it. Thanks for highlighting!

  17. Hi Bowen,

    Special account: What interest rate does the excess above the 2020 Full Retirement Sum of S$181,000 earn?

    Thank you.

  18. Age : 56
    OA : 102K
    SA : 42k
    RA : FRS+interest

    Should I do CPF transfer to RA to reach ERS or draw cash (from OA) then top up to RA ? To preserve SA balance and get 7K tax relief ?

    • Hi Soheng,

      Yes. 4% for RA savings. RA maximum amount is ERS, the excess will be in SA which you will be getting 4% interest as well

  19. Hi Lous,

    if my SA now hit the FRS $181k, where will my monthly contribution to SA go to, SA or OA?

    Then my SA end of year interests will go to OA or SA?


  20. I m age 55 and intend to pledge my property (full paid up) to meet FRS
    OA= $ 100,000
    SA= $ 40,000
    1) am I right this will be the balance after meeting my FRS?
    OA= $50,500
    SA = $0
    RA = $90,500

    2) can I transfer my OA money ($50,500) to RA to earn the 4%?
    3) if (2) is yes, am I allowed to withdraw that $50,000 and interest earned when I reach 64 or anytime?

    • Hi KK,

      1) yes.
      2) cannot. you cannot transfer OA to SA after age 55.
      3) you can withdraw CPF balance anytime after age 55 and set aside minimum sum.

      Louis Koay

    • Hi Eric,

      cannot. for age 55 and above, maximum top up is ERS – RA balance. you already have ERS, then top up is not allowed

      Louis Koay

  21. Hi, Since one cannot transfer from OA to SA to earn higher interest after age 55, could the person do it in 2 steps 1/ withdraw excess in OA, then 2/ top up SA? Wouldn’t the result be the same?

    • Hi Lily,

      Maximum that you can top up to RA is ERS – RA balance. Yes. you can transfer from OA to RA to hit ERS or withdraw from OA and top up cash to RA to hit ERS. the result will be the same

      Louis Koay

  22. Hi,

    Is there a ceiling of limit for Medisave Account? If so what is the ceiling? What happens to the contribution to MA beyond the ceiling?

  23. Hi. I am 59 years old and a retiree. I have fulfilled the maximum amount required in my RA. I have some spare cash of $100k which i am earning from bank fixed deposit account which the interest is very low. Can I transfer from my bank deposit account of $100k into my SA instead to earn the 4% interest? If yes, can I withdraw the $100k plus interest accumulated after 1 year from my SA? Tks.

    • Hi Lisa,

      Can you trf frm your bank deposit into your SA directly? NO.

      There are two ways you can transfer your funds from your bank to your CPF to enjoy the higher rates though;

      1) If you have used your CPF OA previously to fund for your property (assuming it is already fully paid) you may ‘return’ your CPF OA along with the additional accrued interest rates by making a lump sum transfer. All the money will go to your OA though and will not be possible to transfer them from OA to SA but its still better than banks rates.

      2) You can make a voluntary contribution to your CPF up to the maximum annual limit and the funds wil be deposited to your OA, SA and MA according to the allocation rates for your age. Ideal case would be if your MA has already reached the BHS so all your contributions will go to your OA & SA.

      And yes, since you have already met the ERS and you are above 55 you are free to withdraw the money in your CPF OA SA as and when you like!

  24. hi,
    I am about to turn 55.
    OA: $500k
    SA: $218k
    MA : $58k

    Can I empty OA via investment, and SA (left aside $40k) before 55, and fund the short fall of FRS with cash upon creation of RA?

    In short, I would like to take advantage of RA/SA high interest.
    What are ways I can do?

  25. Hello, I am 56. Is it true that once my minimum sums are satisfied, I can withdraw from the SA as well as the OA? If so, apart from interest, what advantage is there in keeping funds in SA? Thank you for your time.

    • Hi ML,

      yes. you can withdraw once you hit minimum sum and above age 55.

      Apart from the interest, you can choose to transfer SA to RA to ERS for higher CPF LIFE payout if you want to

  26. Hi ML,

    yes. you can withdraw once you hit minimum sum and above age 55.

    Apart from the interest, you can choose to transfer SA to RA to ERS for higher CPF LIFE payout if you want to

  27. Hi, if I set aside FRS for my RA at age 55, can I continue to top it up using cash to ERS before I turn 65? Thanks.

  28. I am 56. FRS in RA. Still have 80K in SA.

    Question: should I transfer the remaining 80K in SA to RA, or leave it in SA ? I hesitate since SA and RA both have 4% interest rate.

    Thanks in advance !

    • Hi J.S,

      if you transfer to RA account, you will join CPF LIFE with higher amount of payout from your higher amount in RA. whether you should transfer from SA to RA is depending on whether you want to have flexibility to withdraw from SA or to have higher payout from CPF LIFE

      Louis Koay

      • I am 49yrs, OA 150k, SA 152k, what goes into FRS? I understand SA and OA forms the RA towards FRS. I have been topping up cash $7k to my SA, and also OA SA account have earn interest, will the top.up amount and interest earned count into part of the FRS at age 55?
        After age 55, does it still make sense to make cash top up to RA? Considering the cpf monthly pay out is pooled interest that i may not received if I passed on earlier.

  29. Hi Oh,

    At your 55th birthday, RA account will be created and CPF SA will first transfer to RA to meet FRS. if CPF SA has less than FRS, CPF OA will then be transferred to RA to meet FRS.

    after age 55, whether you should top up to RA is depending on whether you want to park more fund in RA and for CPF LIFE. There will be bequest payout to your beneficiary should you passed on earlier. You can check out the CPF LIFE payout and bequest here:

    Louis Koay

  30. Hi,

    I want to invest my CPF SA fund before it is transferred to my RA. Can you advise the following:
    (1) Is a good idea to invest the fund in the Singapore Government Bond?
    (2) If so, which Singapore Government bond is recommended?
    (3) How much of my CPF SA fund can I use to invest in the bond and how can I invest in it?
    (3) Can I sell Singapore Government bond easily?

    Thank you.

    • Hi Lawrence,

      I shall not give recommendation on investment in public domain, here are my takes:
      1) find a fund that is stable for short term holding. you can find ETF that invest in good investment grade bond. Government bond may not has liquidity for you to buy and sell in short term
      2) suggest to look for ETF that invest in bond.
      3) first 40k in SA cannot be invested. the rest you can invest. You just have to find a platform that can invest with your CPF SA, traditional brokers and banks should allow you to invest with your CPF SA.
      4) liquidity might not be there for you to do short term buy and sell.

      Louis Koay

  31. I am 51yrs, OA 350k, SA 200k (stop working). Wife (not working-living abroad) OA 5k, SA 2k. What would be the best options to maximize our CPF for 55yrs and beyond? Thank you

    • Hi Ah Tee,

      There are too many options available and all have different pros and cons.

      I suggest you make an appointment with CPF board and discuss with the officer on the available options

      Louis Koay


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