Your CPF savings already earn interest, so the idea of investing them to earn even more can sound appealing. That is what the CPF Investment Scheme, or CPFIS, allows in general terms. But CPF investment in Singapore comes with an important catch: because your CPF savings already pay a risk-free return set by the Government, any investment you make with them has to do better than that just to be worthwhile, and it can also lose money. This guide explains how investing CPF generally works, what to weigh, and why many people are perfectly right to leave their CPF untouched. This is general information, not financial advice, and all investing carries risk, including the loss of capital.
What the CPF Investment Scheme Is
The CPF Investment Scheme is a framework, run under rules set by the CPF Board, that lets eligible members use part of their CPF savings to invest in a range of approved products. Rather than leaving all your CPF sitting in your accounts earning the standard interest, CPFIS gives you the option to channel some of it into investments in the hope of a higher return over time.
The scheme generally applies to savings in the Ordinary Account (OA) and, historically, the Special Account (SA), though the rules around which accounts can be used and how have been reviewed and changed over the years. There are also thresholds involved: you can typically only invest savings above a set amount that must remain in the account, so that a base of your CPF stays put and keeps earning the usual interest. Those threshold amounts, the list of approved products, and the account rules are all set by the CPF Board and change over time, so treat this article as an explanation of the mechanics rather than a source of current figures.
To take part, members generally need to open a CPF Investment Account with an agent bank for OA investments, and to meet eligibility conditions such as a minimum age and having completed a self-awareness step designed to check you understand the risks. Confirm the current requirements with the CPF Board before doing anything.
The Risk-Free Interest Hurdle
This is the single most important idea to grasp before investing any CPF money. Your CPF savings already earn interest, and that interest is effectively risk-free because it is backed by the Government. The Ordinary Account earns a base rate, and the Special and Retirement Accounts generally earn more, with additional interest on the first portion of your combined balances under CPF rules. The exact rates are set by the CPF Board and adjusted from time to time, so check the current figures on the official CPF website.
Here is why that matters. If you take CPF savings out to invest, you give up that guaranteed interest for as long as the money is invested. So your investment does not just need to make a positive return. It needs to beat what your CPF would have earned anyway, and it needs to beat it by enough to justify the risk of loss. Clearing a low-risk, guaranteed hurdle consistently is harder than it sounds, especially after costs.
In plain terms: investing CPF only makes sense if you have good reason to believe your chosen investment will, over your time horizon, outperform the CPF interest you are giving up, and you accept that it might not, and that you could lose part of your capital. There are no guarantees.
What You Can Generally Invest In
Under CPFIS, the approved products are chosen to be broadly suitable for retirement savings, and the list is defined and updated by the CPF Board. In general terms, approved investments have historically included things such as:
- Selected unit trusts and investment-linked insurance products
- Certain exchange-traded funds and shares, within limits
- Fixed deposits with approved institutions and Singapore Government Securities
- Gold in certain approved forms
There are also caps on how much of your investible savings can go into higher-risk categories such as shares and gold, precisely to limit the damage a bad bet can do to your retirement savings. Not every product on the open market is allowed, and the specifics of what is approved, the limits, and the fees involved all change, so verify the current list and rules with the CPF Board and the MAS-regulated product provider before investing.
Whatever the product, the usual investing principles still apply. Costs eat into returns, diversification spreads risk rather than removing it, and your time horizon matters. Past performance is never a promise of future results.
Weighing It Up: Invest or Leave It
For many people, the sensible answer is to leave CPF savings where they are. That is not a failure of ambition; it is a rational response to a guaranteed return that is hard to beat safely. The table below lays out considerations against what to weigh for each, in general terms.
| Consideration for investing CPF | What to weigh |
|---|---|
| Potential for higher returns | Your investment must beat the risk-free CPF interest you give up, after costs, or you are worse off |
| Using OA or SA savings above the threshold | A base amount must stay in the account; only savings above set thresholds can be invested |
| Choosing approved products | The list, limits, and fees are set by the CPF Board and change; products should be MAS-regulated |
| Your knowledge and time horizon | Investing suits those who understand the risks and can stay invested through ups and downs |
| Risk of loss | Capital is at risk; a poor outcome directly reduces your retirement savings, unlike leaving CPF untouched |
| Doing nothing | Leaving CPF in your accounts keeps earning the guaranteed rate with no market risk |
The honest conclusion many financial educators reach, including the national MoneySense programme, is that a large share of members are better off simply leaving their CPF to compound at the guaranteed rate, particularly if they are not confident investors or do not have a clear, long-term plan. Investing CPF is an option, not an obligation, and choosing not to invest is a perfectly valid decision.
Getting the Basics Right First
Before anyone thinks about investing CPF, a few foundations matter more. Understand what CPF is and how its interest works, so you know exactly what return you would be giving up. Make sure your everyday finances and cash savings are in order, since CPF is retirement and housing money, not a fund for quick wins. And be honest about your own risk tolerance and knowledge.
If you do decide to explore CPFIS, take the self-awareness steps seriously, read the product documents, pay attention to fees, and consider speaking to a licensed financial adviser. Never act on a figure, threshold, or rate you have not confirmed with the CPF Board, because these are exactly the numbers that change.
This article is general information about how investing CPF savings works in Singapore, not financial advice, and not a recommendation of any product. All investing carries risk, including the loss of capital, and CPF investing has its own rules under CPFIS. Consider your own circumstances and consult the CPF Board or a licensed financial adviser before deciding.
Explore more
Before you think about investing it, make sure you understand the system itself with our guide on understanding your CPF in Singapore, which explains the accounts and how CPF interest works. If you are new to investing generally, our investing basics for beginners in Singapore covers risk, return, diversification, and time horizon in plain language.