What You Can Use Your CPF For (Besides Retirement)

Ryan Ong



Either I’ve lost the ability to read English, or I’m looking at the CPF website. There are Scrabble boards that make more sense that this. I mean,, have you seen the info pages? They make War & Peace look like light reading. Let me do the work. Here’s some other uses of the CPF you might have missed:


What is CPF?

The CPF (Central Provident Fund) is a mandatory savings fund. Like if your piggy bank were alive, and could come at you with a night-stick and handcuffs for not saving.

You contribute 20% of your monthly pay to CPF, and your employer puts in another 16%. These savings are divided into three accounts:

  • Ordinary Account – Used for housing, insurance, investment, and education.
  • Special Account – Used for retirement and retirement-related investments
  • Medisave – Used for hospitalization and medical insurance

The Ordinary account appreciates at 2.5% per annum (as of 2013), and the Special and Medisave accounts at 4% per annum.

When you reach your draw down age (62 years) you can start raiding the coffers for retirement. But that aside, here are some other uses of CPF that some people miss:


1. CPF Works for Private Housing Too


Apartment block
The best thing about my pension? I’d have to say the air-conditioning.


Some Singaporeans think CPF can only be used for HDB flats, or only for HDB loans. Neither is true.

CPF can be used to purchase private property, so long as: (1) the property is freehold, or (2) there’s at least 30 years left on the lease.

If there’s 60 years or less on the lease, then the lease must have at least 30 years left, and last till the buyer is 80 years old.

Buyers using CPF must pay 5% of the valuation limit* in cash; the rest can come from CPF. You can also cover legal costs and valuation fees via CPF. That’s a big deal, since banks are no longer allowed to subsidise those.

There is a drawback to all this. When you sell the property later, you’ll have to repay the amount taken from your CPF, with the accrued interest. So make sure you get a good loan package, and avoid high interest eating into your capital gains. Try sites like MoneySmart to find the cheapest packages available.

*Valuation Limit = Lower of purchase price or market value of property


2. You Can Invest Your CPF Money


Bear market
Poor guy lost it all in a bear market. I hope this teddy cheers him up. (True story)


Some people complain about CPF growth rates. Maybe as the CPF board’s way of saying “Okay big mouth, you take the wheel,” you’re allowed to invest some of it.

To do this, you need more than $20,000 in your OA (Ordinary Account), and more than $40,000 in your SA (Special Account). You also need to open a CPF Investment Account, which most banks can do for you. From there, you can invest a portion of your CPF money in Exchange Traded Funds, Unit Trusts, Investment-Linked Insurance, etc.

Note that a portion of your SA can go into REITs, shares, and gold; the three more common fantasies in Singapore behind Zoe Tay. The amount that can be invested varies (e.g. up to 10% for gold, 35% for REITs).

When you sell the investments, the money goes back into your CPF investment account. NOT your bank account. But look on the upside: You’re making retirement investments without impacting your cash flow.


3. You Can Get Educated With It


Classroom whiteboard
The sooner you finish school, the sooner you can pay to go back in.


You can use your CPF to enroll in education courses, from approved institutions. The approved list is at the end of this application form (If you can’t find the name to tick, it’s not approved).

At the conclusion of the course, you’ll have to replace the money taken from your CPF. This includes the accrued interest, but don’t freak out. You can replace it over six years. And the best part is, it’s not lost money. It’s going back into what’s effectively your pension plan.

Between a bank loan and just using CPF, you’d need a very good reason to pick the bank (e.g. You’re going to a private university that’s off the approved list, you don’t have enough, etc.).


4. You Can Pay Your Insurance Premiums With It


Bandaged head
Uh, we have complaints that your insurance agents dress suggestively.


You can pay medical insurance premiums with your CPF.

Assuming you’re below 76, you can use up to $800 per month to cover premiums. For ages beyond 76, the cap is raised to $1,000 – $1,500. Besides covering premiums, there are other advantages.

I asked Ms. Henrietta Sim, who currently uses her CPF to cover premiums:

You can claim from either Medisave or your private insurer. So if one side doesn’t cover something, you can try to claim from the other. It’s a back-up. And if the pay-out from the private insurer is exhausted, you might be able to use Medisave as well.

So I think it’s generally a good use of CPF money. And what else can you do with the CPF money anyway?

So if you haven’t tried using your CPF money, go and poke around. Your access to it might be a lot less limited than you think. And if you want more updates on it, follow us on Facebook.


Image Credits:
bradipo, Thant Zin Myint, jenny downing, elemenous, NewsbiePix

How do you use your CPF money? Comment and let us know!

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.

Comments (1)

  1. , what about charges of your property? Like house tax and services charges by town council?

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