Should I Invest CPF?

Last updated on May 23rd, 2018 at 10:17 am

Before you ask “Should I invest CPF“, you should ponder over these 2 questions:

1. “Do I have housing loan commitments if I Invest CPF?

If you are using your CPF for your mortgage payment, make sure you set aside fund for it first.
It is especially so if you are planning to take up a loan from HDB. Do you know that your entire CPF-OA will be drawn down as down payment for the house? Nothing will be left.
That means you cannot stop work because your monthly CPF-OA inflows need to meet your mortgage deduction. You may want to consider investing a portion of your CPF-OA in financial assets first before taking up the loan from HDB so that you can have “spare” amounts kept under the CPFIS. This is because the amount you invest through CPFIS will not be deductible by HDB when you take a loan from them. These financial assets can be liquidated anytime for future mortgage repayments if you decide to stop working. Typically it takes about 2 weeks to your CPFIS agent bank.

2. “How long am I comfortable to stay invested if I Invest CPF?

What is your holding power? Holding power is basically NO urgency to sell.

If you are currently below 45 years old, you may actually have strong holding power before your CPF-OA and CPF-SA is transferred to your CPF-RA when you are age 55. Anyway, CPF monies cannot be withdrawn out freely. If you can focus on the long-term and invest without too much worry of ups and downs (because it will happen), you will be rewarded handsomely with high return.

I guess your following question would be …

“Why Do I Invest CPF?”

Investing CPF-OA to get more than 2.5%p.a is REALLY NOT that difficult at all! 

You do not need to be a really savvy stock picker, go to some investment classes. The only thing you need to do is to buy a basket of equities. As easy as that!

But I should stress that equity prices will go through market ups and downs unlike a guaranteed 2.5% interest rate by CPF-OA. You may see -50% on your portfolio if you invested in 2008.

Hence, it requires enough time to get a good average return. As the saying goes…

“It’s not timing the market, but time in the market”

What I can invest CPF in?

If you are only interested in investing in Singapore, you can explore SPDR Straits Times Index ETF. It is the Only equity ETF that you can buy with CPF-OA.

At the point of writing, the fund achieved 7% p.a for the 5 years inclusive of dividends payout. (Yeah I know you are excited! It pays dividends)



Wait there’s more!!

There are easily 15 funds spread over different countries and utilizing various investment approaches achieved a 7% annualised return or more. Therefore, why narrow your risk to Singapore equities only?

These are some examples of the funds:




Do you know that if $50k in your CPF-OA, it will grow to $56.6k (with CPFOA interest at 2.5%).

But a 7% p.a. return will bring you to $70.1k from a $50k initial investment!

$14.5k more all by simple long-term compounding!


“Should I invest CPF in ALL equities or comprise Best funds of the year”?

Bankers and many agents frequently mis-sell CPF investment products by using past performance. I’ve heard the pitch of “ABC fund did 15% return in 2017!” It is a blatant attempt to get you to feel the F.O.M.O. Investing in last year’s best performer is often a bad idea.

Smart investing needs to be:

  1. Disciplined. When markets come down – buy more or at least hold on. When markets go up – don’t be greedy and diversify.
  2. Diligent. Review your portfolio regularly for methods to improve


That is where customisation and proper portfolio management comes in.

I did a Balanced and a Moderately Aggressive approach portfolio for my clients and they are quite satisfied with the result even though it is only 3 -4 years investment horizon.

Result 4.4%p.a. nett in a short 3years for a Balanced Approach Portfolio



















Result 6.8%p.a. nett in a short 4 years for a Moderately Aggressive Portfolio
















If you are interested to find out more on CPF investments, click below


“Should I Invest CPF Ordinary Account and not my CPF Special Account?”

My personal take is that you should consider leaving your CPF-SA alone reasons being :

1. CPF-SA gives a higher return of 4%pa which is very decent. You should keep it as your “safe assets” and invest aggressively your CPFOA and cash savings.

2. Investment products that qualify for CPFIS-SA are very limited. The list above does not apply and the available limited options often do not deliver significantly more than CPF-SA of 4%pa.


In conclusion, investing your CPF-OA does not affect your cash-flow and you have a good chance to do well especially if you think long term.


Click below to find out our fees and how you can start investing today!


Image credits:

Josh Tan Jian Liang (CHFC) Principal Author: REVIEWS: Practising financial planner with Promiseland Independent Pte Ltd. TJL100057681 EXPERIENCE: More than 14years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.
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