CPF Investment Scheme (CPFIS) – Here’s Why You’d Be Silly to Not Consider Using It

CPFIS CPF Investment Scheme

Peter Lin



One of the biggest complaints that Singaporeans have about their CPF savings? We never actually see the money we’ve saved. Sure, we receive yearly statements but what difference does it make if you cannot cash it out until you’re older? Then there’s the other complaint – that the interest rates of the CPF accounts are too low to combat inflation. Now, what if I told you there’s a way to increase the rate you grow your CPF? I’m talking about the CPF Investment Scheme.

Now, I’m one of those Singaporeans old enough to remember the glory days of video game arcades. Back then, it took skill to see how far you could go in a game while spending the least number of tokens. Well, those days are generally over – with console games and emulators, there’s no longer any challenge about finishing a game on the least amount of tokens.

It doesn’t cost a cent to get another “life” or “continue” when your character dies or is defeated. It’s the same with the CPF Investment Scheme – it doesn’t cost you a cent out of pocket, so you can (and should!) take advantage of it to earn more than the interest rates of the Ordinary Account and Special Accounts.


Who is eligible for the CPF Investment Scheme?

You have to be at least 18 years old, are not an undischarged bankrupt and have enough money in your CPF Accounts. The minimum amounts required are $20,000 in your Ordinary Account or $40,000 in your Special Account. Of course, if you want to take advantage of both kinds of CPF Investment Schemes (CPFIS), then you will need to have the minimum amount in both accounts.


What do you need to know before using your CPFIS?

The most important thing to remember is that any returns you get from your investments through the CPFIS will go back to your CPF accounts. That means you should ideally be investing with the future in mind.

You don’t want to risk squandering all your available CPF funds on a risky product if you’re still not going to be able to enjoy the fruits of your investments for another 20 to 30 years. That being said, CPF has already shortlisted investment products that are less volatile, which is good given Singaporeans’ penchant for.. um.. “risk-taking” (we mean gambling).


What can you invest in?

The CPF Investment Scheme – Ordinary Account allows you invest in a number of products. Here is the complete list:

  • Fixed Deposits
  • Singapore Government Bonds
  • Treasury Bills
  • Statutory Board Bonds
  • Bonds Guaranteed by the Singapore Government
  • Unit Trusts
  • Investment-Linked Insurance Products
  • Annuities
  • Endowment Policies
  • Exchange Traded Funds

Up to 35% of your available balance in your Ordinary Account can be used for:

  • Shares
  • Property Funds
  • Corporate Bonds

Up to 10% of your available balance in your Ordinary Account can be used for:

  • Gold ETFs
  • and other Gold products.

The CPF Investment Scheme – Special Account is much more restricted. You cannot invest in unit trusts or investment-linked insurance products that are considered higher risk. You also cannot invest in shares or gold products. If all this sounds like gibberish to you, start out by heading over to our Investing Learning Centre first.


What are the potential returns of CPFIS investments?

This isn’t an easy question to answer, of course, because of the range of products available. For example, bonds tend to be lower risk, lower returns, while unit trusts are generally higher risk, higher returns.

Ideally, you’d want your investments to at least earn more than the risk-free interest rates of the CPF Ordinary Account and Special Account, which are currently at 2.5% and 4.0% per year.

Also remember that there may be investment costs involved – including bank charges, brokerage charges and other miscellaneous fees. So your returns need to earn enough to pay for these as well.

Ultimately, you want to be looking at returns of at least 5% per year.


How do I apply to invest my CPF savings via CPFIS?

If you want to use your CPF Ordinary Account to invest, and have more than $20,000 in it, then you can open a CPF Investment Account with DBS, OCBC or UOB. Generally, it doesn’t matter which bank you open your Investment Account with, since the fees and charges are the same for all three.

This account is purely to allow whichever bank you choose to administer the funds. You will still need a brokerage account to actually invest the money, and it doesn’t necessarily have to be with the same bank as your CPF Investment Account i.e. you could buy a Unit Trust with PhillipCapital and they will liaise with, say, DBS, to use your CPF money to execute the purchase.

If you want to use your CPF Special Account to invest, and have more than $40,000 in it, you can just approach the investment product providers directly. These investment product providers include fund management companies or investment administrators.

Will you consider utilising the CPF Investment Scheme? Why or why not? We want to hear from you.


Related articles:

How to Decide Which Investment Brokerage in Singapore Is Best For You

5 Different Ways You Can Invest in Stocks and Bonds

Singapore Savings Bonds: Is It Better Than When It First Launched in 2015?

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.

  • GK

    Had invested 10k using cpfis thru an Investment linked IP focusing on american market 10 yrs ago. Now it’s worth 15k, do i cont to keep or encash to look for other opportunity? In the 1st few yrs, it was worth much less than the principal 10k only recent 2 yrs it’s rising due to america market rising..

    • Jeremy Chua

      Without going into too much technicalities, $15,000 from an original outlay of $10,000 ten years ago is at an approximate 4.13% return per annum. If this was from your ordinary account, it would be decent, but not so if it was from your special account.

      You have to decide if the .13% premium currently is worth the shot to take an extended risk moving forward.