8 Types Of Investments You Can Make Using Your CPF OA Monies Via The CPFIS-OA

Our CPF Ordinary Account (OA) balances earn a floor rate of 2.5% per annum. Apart from using our OA balances to pay for our home down payment and monthly home loan, we can also choose to invest via the CPF Investment Scheme (CPFIS).

The aim, if we do invest our OA balances, is to better the 2.5% interest rate return that CPF already pays us. While this may be possible, we also have to understand that we will be taking on some investment risk.

Today, 1 million CPF members (or close to one-quarter of all CPF members) have collectively invested more than $25.4 billion via the CPFIS-Ordinary Account. Moreover, there are also over 248,000 CPF members with about $5.7 billion of their CPF SA balances invested via the CPFIS-Special Account.

In this article, we will focus on investing our OA balances as it earns 2.5% per annum, compared to our SA balances, which earn a higher floor rate of 4.0% per annum.

Read Also: 6 Investments In Singapore That Provide Guaranteed Principal And Returns

What Is CPFIS?

The CPFIS is an investment scheme by CPF – and not to be confused with the Supplementary Retirement Scheme (SRS), which is a separate scheme to invest for your retirement. CPFIS gives us the option to invest both our OA and SA balances to boost our retirement nest egg.

When we invest our OA balances, we need to apply for a CPFIS-OA account with one of the three local banks – DBS, OCBC, UOB – but we can invest in a variety of investments managed by other financial institutions. Similarly, when we invest our SA balances, we are utilising the CPFIS-SA scheme, but there is no need to open any specific CPFIS account. Instead, we can buy and sell the products directly with the providers.

Unlike keeping our money in our CPF accounts, taking on investment risk can mean earning higher returns, but it can also mean losing money on our investments.

To invest our CPF balances, we need to be eligible:

• at least 18 years old
• not an undischarged bankrupt
• have more than $20,000 in our OA
• have more than $40,000 in our SA
• complete Self-Awareness Questionnaire (SAQ) (from 1 October 2018)

The two requirements on minimum balances, allowing us to only invest CPF balances above the first $20,000 in our OA and $40,000 in our SA are to enable us to enter CPF LIFE automatically. CPF LIFE is Singapore’s annuity scheme that provides a lifelong monthly payout during our old age, and requires us to have $60,000 flowing into our Retirement Account (RA) when we turn 55.

Moreover, we also earn an additional 1% per annum returns on the first $60,000 of our CPF balances, of which $20,000 can come from our OA. In effect, the restrictions to keep $20,000 and $40,000 in our OA and SA before being allowed to invest also enable us to fully enjoy the additional 1% per annum that CPF pays on top of the floor rates for each account.

Another thing we need to note when investing our CPF balances is that there are costs involved. From October 2020, the CPF Board has mandated the removal of all sales charges, and capped annual wrap fees at 0.4% per annum. This reduces costs for those investing our CPF monies, which should translate into better returns.

Here are 8 types of investments we can make with our CPF OA balances.

Read Also: CPF Top-Ups VS SRS Top-Ups: Which Should You Choose?

#1 Approximately 100 Unit Trusts

We can invest in a broad range of over 100 unit trusts with our OA funds. We can invest in majority of the unit trusts individually, while about 10 of them have to be invested into via Investment-Linked Products (ILPs).

The unit trusts that we can invest in with our OA funds are also typically managed by reputable fund managers such as:

• Aberdeen Asset Management
• Allianz
• Amundi
• Dimensional
• Eastspring Investments
• Fidelity Investments
• Franklin Templeton Investments
• JP Morgan
• Lion Global Investors
• Manulife Asset Management
• Natixis
• Nikko AM
• PineBridge Investments
• Schroder
• UOB Asset Management

Read Also: Beginners’ Guide To Start Investing Using The CPF Investment Scheme (CPFIS)

#2 Insurance Products With 8 Insurance Companies

There are approximately 110 funds that we can also invest in via 10 insurance companies’ products. These products include Investment-Linked Products (ILPs), annuities and endowment policies.

The 10 insurance companies include:

• AIA
• Great Eastern
• HSBC
• Income Insurance
• Manulife
• Prudential
• SingLife
• Tokio Marine

Read Also: CPFIS: 5 Reasons Why You Should Not Rush To Invest Your CPF Monies

#3 Singapore Government Bonds (SGBs) & Treasury Bills

We can invest our OA funds into Singapore Government Bonds (SGBs) and Treasury Bills as well. These investments have been gaining in popularity since mid-2022, following a steep rise in global interest rates, while the interest rate paid by CPF OA has remained flat at 2.5% per annum. For example, the latest 6-month T-bills (issued in February) have a cut-off yield of 2.75% – which does not make it a very attractive investment currently using OA funds.

In terms of risk, Singapore Government Bonds and T-bills carry virtually the same risk levels. Hence, when interest rates were higher in the past few years, more individuals had invested in the T-bills.

#4 Exchange Traded Funds (ETFs)

There are currently only 6 ETFs that we can invest in with our CPF OA funds. They allow us to invest in equities, REITs, bonds and gold.

They are:

• ABF Singapore Bond Index Fund
• Nikko AM SGD Investment Grade Corporate Bond ETF
• Nikko AM Singapore STI ETF
• NikkoAM-StraitsTrading Asia ex Japan REIT ETF
• SPDR Straits Times Index ETF
• SPDR Gold Shares (subject to 10% investible OA savings limit)

These investments have an expense ratio of between 0.24% and 0.55% per annum.

#5 Fixed Deposits

While none of the banks are offering fixed deposits under CPFIS, OCBC and Maybank had previously offered them when the interest rate environment was higher.

Read Also: OCBC Is Now Offering 3.4% P.A. For CPFOA Fixed Deposit, But What’s The Catch?

#6 Statutory Board Bonds, Bonds Guaranteed By Singapore Government

While these are investments we can make with our OA funds, there are currently no products available.

#7 Shares, Property Funds & Corporate Bonds

We can only invest up to 35% of our investible OA savings in shares, property funds and corporate bonds listed on the Singapore Exchange (SGX). 

We can view the entire list of such securities on the SGX page – and the list is quite extensive.

When making such investments, we need to trade via one of the following 10 brokerages.

• CIMB Securities
• DBS Vickers Securities
• iFast Financial
• KGI Securities
• Lim & Tan Securities
• Maybank Kim Eng Securities
• OCBC Securities
• Phillip Securities
• UOB Kay Hian

Read Also: Singapore Online Stock Brokerage Account Fees Comparison

#8 Gold Products (Other Than SPDR Gold ETF)

We can also invest up to 10% of our investible OA savings in gold products. This limit is for all our gold investments, which include any amounts we invest in the SPDR Gold ETF.

If we want to invest in gold products such as gold certificates, gold savings accounts or physical gold, we can only do so via UOB. As such, we must open our CPFIS-OA account with UOB.

Read Also: 4 Ways Singapore Investors Can Invest In Gold

We Can Invest Our CPF Savings With Endowus

Another way we can invest our CPF OA monies is via Fund Management Accounts. Endowus is one fintech player that currently enables us to invest in the best-in-class global funds at the lowest possible costs.

Endowus also allows us to invest in a mix of globally diversified equity and fixed-income funds depending on our risk appetite.

On its Flagship portfolio, there are six risk profiles, from very conservative to very aggressive that we can be categorised into. Depending on our risk profile, we will gain investment exposure in a combination of the following Equity and Fixed Income funds:

• Amundi Index MSCI World Fund (Equity)
• Dimensional Global Core Equity III Fund (Equity)
• Amundi Prime USA Fund (Equity)
• Dimensional Emerging Markets Large Cap Core Equity III Fund (Equity)
• Schroder Global Emerging Markets Opportunities Fund (Equity)
• Amundi Index Global Aggregate Fund (Fixed Income)
• Dimensional Global Core Fixed Income III Fund (Fixed Income)
• UOBAM United SGD Fund (Fixed Income)
• Eastspring Singapore Select Bond Fund (Fixed Income)

We can also invest in over 40 individual funds that are eligible for CPF-OA investments via its Fund Smart investment – giving us broad global exposure.

Transferring Our OA Balances To Our SA (Or RA) To Earn A Higher Return Instead

If we do not want to take on investment risk, we can transfer our OA balances to our SA or Retirement Account (RA) to earn 1.5% more per annum (i.e. from 2.5% in our OA to 4.0% in our SA).

However, once we do this, we lose the flexibility to bring back these funds into our OA – to use for our housing, children’s education or insurance schemes such as the Dependants’ Protection Scheme (DPS) and Home Protection Scheme (HPS). This is unlike investing our OA balances. Once we sell our investments made with our OA balances, the funds go back into our OA – and we can use them for our housing or education needs.

Read Also: 5 Practical Ways To Use Money From Your CPF Ordinary Account (CPFOA)

Monies Invested Via CPFIS Will Be Considered Part Of Our Estate

Cash and investments held in our CPFIS-OA and CPFIS-SA are not covered under our CPF Nomination. This means that such investments go straight into our estate after we pass on. Therefore, when making our CPF Nomination, an additional consideration is that our investments are not part of it. Similarly, when we make a will, we need to know that our CPF investments will fall under it.

Read Also: 10 Investments You Can Make With Your Supplementary Retirement Scheme (SRS) Account

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