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6 things to note about CPF contributions in Singapore
Your guide to Singapore's Central Provident Fund (CPF).
By Dee Lim
SINGAPORE – The Central Provident Fund (CPF) was started by the Singapore government in 1955 as a key pillar of the country's social security system. It is run by the CPF Board, made up of a chairman and 14 other members, who oversee the organisation's budget and performance.
On a wider scale, CPF is part of the ongoing effort in Singapore’s social policies to promote active government support for its citizens to be self-reliant particularly in their later years. Here's what you need to note about the CPF:
1. What is CPF?
CPF is part of an initiative to make sure that all Singaporeans and permanent residents have enough funds set aside for retirement. This mandatory retirement savings scheme was designed to help everyone achieve three main goals: a fully paid-up home, adequate insurance and savings for healthcare, and a steady stream of lifelong retirement income.
The money in your CPF comes from two main contributions: your employer and your own monthly salary. These are funnelled into three different accounts: Ordinary Account (OA), MediSave Account (MA), and Special Account (SA). A Retirement Account (RA) is created when you turn 55 years old.
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2. How much is the CPF contribution each month?
The total contributions each month depends on your age. It ranges from 12.5 per cent to 37 per cent of your monthly salary, and is applicable only for those whose monthly salary is more than S$750.
For those who earn above S$50 but under S$750 per month, your employer is still required to pay their share of the CPF contributions, but there is no employee's share of the contributions.
Here is the percentage of contribution each month:
Employee's age (years) | By employer | By employee | Total (% of wage) |
55 and below | 17 | 20 | 37 |
Above 55 to 60 | 15 | 16 | 31 |
Above 60 to 65 | 11.5 | 10.5 | 22 |
Above 65 to 70 | 9 | 7.5 | 16.5 |
Above 70 | 7.5 | 5 | 12.5 |
3. How to calculate CPF deduction from my salary?
To calculate how much is going into your CPF account each month, use the handy CPF contribution calculator.
4. How can you check your CPF nomination?
As the money from your CPF is considered to be part of your estate, it will be paid out and distributed upon your death. If you have done a CPF nomination, it will be distributed to the nominee(s) stated. Without a nomination, your CPF savings will be transferred to the Public Trustee for distribution according to the laws of Singapore.
To check on your CPF nominations, go to the CPF Nominations page and log in with your Singpass. If you have not done so, follow the online guide to make your nominations. You will also be able to update your nominations here.
If your details are not available online, you can submit a request with your Singpass, and that should be processed within four working days.
5. How can you invest your CPF funds?
The CPF Investment Scheme (CPFIS) allows you to invest your CPF funds to possibly make it grow even more. You will need to set up a CPF Investment account with a registered bank such as DBS, OCBC or UOB. This will give you access to invest the money in your OA. You don't need to open a CPF Investment Account to invest your SA savings.
Keep in mind that you will have to maintain a minimum of S$20,000 in your OA and S$40,000 in your SA before you can invest in the CPFIS.
You'll be able to invest in a range of products, such as shares, REITs, Exchange Traded Funds, bonds, gold, insurance products, unit trusts, Treasury Bills (or T-bills) and Singapore Government Bonds, and fixed deposits. However, the CPF Board does not endorse any product providers or investment products that are included under the CPFIS.
6. How to buy property with CPF funds?
When it comes to property, you can use your CPF OA to buy a Housing and Development Board (HDB) flat, or buy or build private residential property.
There are terms and conditions to using your CPF for housing, and also some limits. Broadly speaking, this is what you'll need to know, but always check with CPF for the finer details.
For those buying HDB or DBSS flats, or private residential property, this is what you can use your OA for:
As direct downpayment on the purchase price of your flat
As repayments of your housing loan whether in part or to pay the monthly loan amount
To pay stamp duty and legal fees incurred during the purchase or mortgage of your property
To pay Home Protection Scheme premiums (for HDB flats only)
You won't be able to use your CPF to pay for booking fees, option fees or deposits, or for the monthly service and conservancy charges that you'll need to pay to your town council. Any taxes imposed on your flat is also ineligible to be paid by CPF. Renovation costs are also not covered by CPF, and you won't be able to use your OA if your purchase price is above the lower of the purchase price or the valuation of the property.
You should also note that there's a withdrawal limit when using your CPF towards your HDB or DBSS flat, or private residential property, depending on the age of your property and when it was purchased.
Check the CPF website for the maximum amount of CPF funds that you can use towards your property purchase.
For those who are 54, you can apply to have your savings remain in your OA, so that it doesn't transfer to the Retirement Account when you turn 55 years old. You should consider this if you're currently using your OA to repay an existing housing loan or thinking of using it to finance the payment on the purchase of your next property.
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