The Central Provident Fund (CPF) is a compulsory social security system that allows Singapore citizens and permanent residents to set aside money to take care of our retirement, housing, and healthcare.
The monthly CPF contributions that both employers and employees make go into three different accounts:
Ordinary Account (OA); Special Account (SA); and MediSave Account (MA).The accounts earn interest at various rates, as shown below:
Account TypeAnnual Interest Rates OA2.5% (up to 3.5%) SA4% (up to 5%) MA4% (up to 5%)
There is an extra 1% interest on the first S$60,000 of our combined balances in CPF. Of this S$60,000, S$20,000 is for the OA.
Those of us with more than S$20,000 in our OA can invest the remaining money in a scheme called the CPF Investment Scheme (CPFIS). That money would be earning 2.5% interest if left untouched.
The CPFIS allows
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