CPF Schemes Singaporeans should be aware of

The Central Provident Funds (CPF), is a “social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, home ownership, family protection and asset enhancement.”

“CPF Overview”. Cpf.gov.sg. N.p., 2016. Web. 29 Mar. 2016.

While most people believe that CPF is only meant for the aged, there are some aspects of the CPF that are worth looking at when we are young. One particular aspect that we find especially important is something we call “compounding interest”.

What are some of the schemes that we should know about?

  1. CPF Education Scheme

This scheme allows you to use your Ordinary Account (OA) savings to pay for your own, children’s or spouse’s subsidised tuition fees. Applications can also be made to use CPF savings to pay for your sibling’s or relative’s subsidised tuition fees, but will be assessed on a case-by-case basis.

However, a point to note is that this is effectively a loan from the CPF account that you are using to pay for your education. Hence, it is necessary to return this loan with interest. The effective interest rate payable is pegged to the OA interest rate, which is adjusted quarterly.

The student has to begin repaying the loan one year after graduation or termination of studies, whichever is earlier. Repayment must be made in cash either in one lump sum or via monthly instalment over a maximum of 12 years. The minimum monthly instalment is $100 and the rate will be computed for the student based on the loan amount and repayment period.

  1. CPF Investment Scheme

As we graduate and take on our first job, it is imperative to consider investing for retirement. This scheme allows you invest your Ordinary Account (OA) and Special Account (SA) savings in a wide range of investments.


There are some conditions to be met before you can adopt this scheme:

  1. Applicant must be at least 18 years old;
  2. Applicant must not be an undischarged bankrupt;
  3. Applicant must have more than $20,000 in their OA; and/or
  4. $40,000 in their SA.

The schemes that are applicable for investment can be found here. One of the investments include Exchange Traded Funds (ETFs) which our blog greatly advocates.

“CPF Investment Schemes”. Cpf.gov.sg. N.p., 2016. Web. 29 Mar. 2016.

  1. CPF Nomination Scheme


The CPF Nomination Scheme might be the last thing that comes to mind for those in their 20s or 30s, but it is an important scheme that should not be overlooked. As suggested within its name, the CPF Nomination Scheme is a process of nominating a beneficiary of your CPF savings after death.


Why is this important? CPF had recently released a statement, stating that CPF Funds, unlike conventional assets or liquidity, will not be covered under a will.


What is covered under the CPF Nomination Scheme?


Covered under CPF Nomination Not covered under CPF Nomination
  1. CPF savings in your Ordinary, Special, Medisave and Retirement Accounts
  2. Unused CPF LIFE premiums, if any
  3. Discounted SingTel shares
  1. Properties bought using your CPF savings
  2. Payouts from Dependants’ Protection Scheme (DPS)
  3. Cash and investments held in the CPF Investment Account under the CPF Investment Scheme-Ordinary Account (CPFIS-OA)
  4. Investments held under the CPF Investment Scheme-Special Account (CPFIS-SA)

The nomination is required in order for CPF savings to be distributed.

Savings in the CPF are not covered legally upon death. Thus all funds in the CPF account will be distributed via
      a) a CPF nomination; or
      b) a public trustee if you do not have a nomination in place.

A will does not affect the distribution of CPF Funds.

Which means that even if the manner of distribution of CPF funds is stipulated in a will, it will not be recognised by CPF Board. A will states all your assets as estates; your debtors will have claim over these estates and the excess will only then be distributed to your dependents. CPF funds are covered under a nomination and are not part of your estate. These funds will therefore be distributed directly to your dependants or nominees upon your death and cannot be claimed by your debtors.

Paying of Debts becomes Optional.

Your CPF nominees may use the your CPF funds to repay your outstanding debt. However, this is optional and they are under no legal obligation to repay any such debt using the CPF money they receive.

What if I do not make a nomination before my death?
If you did not make a nomination, your CPF savings will be distributed via means of Public Trustee. If distributed in this manner, the funds may not be in proportion of what you may have wanted it to be in.


How do I make a nomination?

The nomination procedure is very simple.

All you have to do is fill in a form found on the CPF Nomination Website.
Download the form, fill it up and submit it to CPF Board.

More information can be found here: https://www.cpf.gov.sg/Members/schemes/schemes/other-matters/cpf-nomination-scheme


The CPF is an scheme meant for everyone. It is not a fund meant solely for the aged or the retired. It is a scheme that provides benefits from the time we start work and should be utilised to its fullest extent.  

Article by Chee Siang


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