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All You Need to Know About CPF

The Central Provident fund or CPF, a mandatory social security savings scheme funded by both employers and employees. CPF can benefit us immensely during retirement, housing and for healthcare needs. Payroll Processing Companies.

Pros and Cons of CPF

More funds are added into the Ordinary Account when we are younger but as we age more funds will be added to the Special Account and Ordinary Account so that we can be more prepared for our retirement and healthcare needs. After 55, the Retirement Account available for our retirement needs. Get more information about CPF interest rates here

These are some pros and cons of each type of CPF account listed below.

1) Special Account


– Interest rate beats the inflation rate which are are around 5% and 3% respectively. Interest rate increases to 6% if you are above 55 years.

– Safest long term investment in Singapore

– Creditors cannot take your CPF funds in case of bankruptcy

– Funds can be used to make investments


– Funds are locked and cannot be used for home down payment 

– It cannot be used to make education loans

– Funds transferred from ordinary account to special account cannot be reversed

2) Ordinary Account


– Can be used for home purchases and education


– Beneficial only for the short term

3) MediSave Account


– Interest of at least 4%

– Top ups are tax deductible


– Only be used for medical expenses & health insurance and not for retirement

1) CPF members have the option to invest using the CPF Investment Scheme to get higher expected returns. However, some find that they don’t manage to beat the CPF interest rate while others even lose some money.

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