Deputy Prime Minister Lawrence Wong announced during Budget 2024 that the Special Accounts (SA) of CPF members aged 55 and above will be closed. On 19 January 2025, the government officially announced the closure of these accounts, with the Full Retirement Sum (FRS) of S$213,000 transferred to members’ Retirement Account (RA). Any excess savings above the FRS will be transferred to the Ordinary Account (OA), which attracts an interest rate of 2.5%. Members can choose to transfer their OA balance to the RA to earn a higher interest rate of 4%, but the transfer is irreversible as the balances in the RA will be used to compute the payouts for CPF Life. Also, there is a maximum limit for the RA which is the Enhanced Retirement Sum (ERS) of S$426,000 for 2025. Hence, any excess funds flowing to the RA will, instead, be channelled to the OA.

Two options to choose from

This CPF change may seem minor, but it makes a difference...