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Usage of CPFOA

Updated: Apr 8, 2020

In Singapore, the Central Provident Fund (CPF) is a compulsory savings plan for working Singaporeans and Singapore permanent residents (SgPR) primarily to fund for their retirement, housing, and healthcare needs. The contribution into your CPF account derives from your gross income and the contribution rate differs across age bands. For example, those who are 55 years and below will contribute 20% of your gross income into your CPF account, while your employer contributes 17%. Out of this total 37%, 20% goes into your Ordinary Account (OA). What can you do with your OA money? OA money caters for our life milestone needs. You can use your OA money for the purchase of a residential property, to pay for your child’s education fees, and eventually, accumulate for your retirement nest. Decades ago, you may utilize OA money to fund for some insurance policies. Currently, this feature is no longer available except for the purchase of your mortgage loan insurance arranged by Housing and Development Board (HDB). While you are accumulating the money in your OA, you earn an interest rate of 2.5% per annum. The first $60,000 of your combined balances (up to $20,000 from the OA earns an extra 1% per annum interest.


Ordinary Account money caters for our

life milestone needs.


In addition, you may also maximize the returns of your OA money by investing the money in CPF approved investment tools such as Unit Trust, Stocks and Gold. Do note that capital invested is not protected and returns are not guaranteed. Thus, it is important that you understand your risk appetite before you decide on investing your OA money. Do manage the usage of your OA money wisely as it builds towards your golden years. If all your funds are dump into servicing a luxurious house, then be prepared to work for longer years to save for retirement. Maybe not, because lastly, you may do Voluntary Contribution (VC) to all 3 CPF accounts up to the annual maximum limit. Your mandatory annual CFP contribution and VC cannot exceed $37,740. In summary, usage of OA:

  • purchase of residential property

  • pay for child’s education fees

  • retirement fund

  • investment growth

  • voluntary contribution

More details can be found on CPF.gov.sg

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