To help grow the retirement nest egg, the Singapore government has implemented various CPF Investment Schemes to allow Singaporeans and Permanent Residents (members) to invest the savings in their Ordinary Account and Special Account. However, young members who just started working may not be able to participate in these schemes as they may not meet the required minimum sums in their respective accounts yet. Fret not, Heartland Boy would like to discuss the investment option of transferring savings from your CPF Ordinary Account into Special Account early.
Advantages of Transferring Savings from Ordinary Account into Special Account
1. Your savings works “harder” in the Special Account than in the Ordinary Account
- Savings in the Special Account earn a guaranteed 4% while savings in the Ordinary Account only earn a guaranteed 2.5%. The lower interest rate offered by OA is due to its wider usage. For instance, funds in OA are allowed to be utilised to fund child’s tertiary education as well as CPF member’s property purchase. Such uses of the CPF funds are not applicable to the Special Account and a higher interest rate is therefore provided to compensate for its restricted use.
2. Take full advantage of the extra 1% interest
- An extra 1% is paid by the CPF Board to the first S$60,000 in your combined Singapore CPF accounts, but limited to $20,000 from your Ordinary Account. Because of the way government allocates your CPF funds, you would inevitably find that your Ordinary Account accumulates faster than the rest of the accounts.
Therefore, even if you have S$50,000 in your Ordinary Account, only the first S$20,000 can earn 3.5% interest per annum while the remaining S$30,000 would earn the guaranteed 2.5% interest per annum. This is whereby a deliberate action of transferring from your OA to SA would allow a CPF member to benefit from the bonus 1% interest at an earlier stage.
3. Compound interest takes care of the rest
- As an illustration, a member aged 25 who transfers S$20,000 from his Ordinary Account to his Special Account, he would have a guaranteed S$22,917 more at the age of 55 compared to the default scenario of doing nothing and leaving his savings in the Ordinary Account. That is more than double the original principal and really illustrates the beauty of compound interest.
Table 2: Comparison of the impact of compounding interest on Ordinary Account and Special Account
- The illustration above only assumes a conservative 4% for the Special Account. It is obvious that the difference will be greatly magnified if you can take advantage of the extra 1% levied to the Special Account that would otherwise not be available in the Ordinary Account if your Ordinary Account already exceeds the S$20,000 savings. As aforementioned, this is a likely scenario as balances accumulate faster in your OA since a greater ratio of the employer and employee contribution goes into the OA. Therefore, it is imperative that you start as soon as possible to allow compound interest to work its magic. Alternatively, you can view this transfer as purchasing a long term, non-redeemable, triple AAA bond that does not pay annual dividends. Upon the age of 55 and after setting aside the savings for the Full Retirement Sum, you can withdraw the excess savings to enjoy the fruits of your labour. Find out how your CPF accounts are transformed when you turn 55, and how much money can you withdraw from them in this article.
Disadvantages of Transferring from Ordinary Account into Special Account
- Note that there is no tax relief for transferring from Ordinary Account to Special Account. However, the CPF Retirement Sum Topping Up Scheme offers tax relief for cash top-ups. Heartland Boy has written an article on what Heartland Girl did to minimize her tax expenses through the Retirement Sum Topping Up Scheme which you can check out here.
- The process is irreversible so it is better to start learning to live life with no regrets once you have done it.
- Before the age of 55, savings in the Special Account cannot be withdrawn and utilized for any purpose, including paying off your housing mortgages.
Why Young Members are Especially Eligible
You can transfer your savings from Ordinary Account into Special Account if you are
- Below 55 years old, and
- Do not have more than S$161,000 (Full Retirement Sum) in your Special Account. Note that the FRS increases every year and so it is better to check the prevailing FRS.
Apply To Transfer OA To SA Online
The process to transfer OA to SA is super easy and fuss-free. Here is a step-by-step guide on how to transfer savings from your OA to SA.
- Log on to cpf.gov.sg with your SingPass
- Select “My Request” from the panel at the left
- Expand the options under “Building Up My/ My Recipient’s CPF Savings
- Under “Using CPF”, select Transfer From My Ordinary Account to My Special Account
- Proceed to acknowledge the disclaimer and key in the amount that you would like to transfer
- Log in after a few days to confirm that your transfer was successful!
Heartland Boy Transferred Savings from his Ordinary Account into his Special Account
Heartland Boy did a transfer of the savings from his Ordinary Account into his Special Account after settling the 5% down payment for his Build-to-Order (BTO) purchase in early 2015. As a prudent measure, he did not transfer the entire savings in his Ordinary Account into his Special Account. Instead, he set aside the other 5% down payment that could be due in another 3 years. For couples who are about to collect the keys to their long-awaited HDB flats, do note that HDB would empty all the savings in your Ordinary Account before extending you a HDB loan on the remaining unpaid balance. Therefore, transferring savings from your Ordinary Account into Special Account may be one way to prevent this from happening.
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Insightful post! Didnt know we can do that! But for someone like myself where ALL of my monthly ordinary account goes into the payment of my resale hdb flat, how can i then capitalize on the attractive interest rates by the special account? Or will i not be able to?
Thank you for your kind words and welcome to Heartlandboy.com! If your current Ordinary Account has already been emptied out, you will not be able to transfer to Special Account. Therefore, you may want to wait for your Ordinary Account to start to accumulate again, either by monthly savings or annual bonuses, before you transfer to Special Account to take advantage of the higher interest rates! I guess this post is more appropriate for couples who have a long waiting period before their HDB BTO flat is ready.
Hi! I stumbled on your article and found it very insightful. I actually had the same question as Scottie.
I already have got my BTO recently and have emptied my OA. I too am considering to maximise the additional 1% savings in the OA / SA. Assuming that i don’t mind having my money locked up in the SA, am i able to do a lumpsum cash top up to the SA (eg. Cash > SA)? Or must I contribute to the OA before i can transfer to SA (cash>OA>SA)?
I have some spare savings in my bank, the other thing I’m thinking about is whether I should (1) do a 20k prepayment of my HDB loan, or (2) top up my OA with the same amount and get 3.5% interest, or (3) top up my SA with the 20k. I’m not sure if there are regulations to stop me from doing 2 & 3.
Thanks for your compliments. I am glad you enjoyed my website.
1) You can use cash to top up your SA by participating in the CPF Retirement Topping-Up Scheme if you are eligible. You can read my article on it here (https://heartlandboy.com/reduce-your-income-tax-expense-cpf-retirement-topping-up-scheme/)
2) You cannot contribute to OA only. By participating in the CPF voluntary contribution scheme, your voluntary cash contribution gets channeled into the OA,SA and MA according to your age group. Note that there is an annual CPF Contribution Limit.
3) With regards to your situation, it depends on whether you are comfortable with being saddled with debt. For myself, it will top up my SA especially if I have not crossed the $60,000 for my combined balances.
Bro, i appreciate your message about the higher interest rate in the special account.
However i suggest refining the calculations and assumptions
only up to $60,000 in combined accounts qualify for extra 1%,
– table 1 has calculations with the extra interest even for balances past $60,000
– the table also has an implicit assumption that there is no balance in the medisave account, on top of $0 in the ordinary account
A more conservative calculation would be to use 4% instead of 5%
The $20,000 transfer will leave a balance of $64,868 at 55 years old.
Still $22,917 more than leaving it in the ordinary account.
Thank you for pointing out my mistakes. I agree with you and have edited the article accordingly. Part of the objectives when I started this website was to hone my personal finance knowledge and I am glad I have readers like you who guide me along!
Hi thanks for sharing . Anyway I’m 45 and plan to transfer some of my OA to SA to max it at 161k… So What happens when we have reached the max 161k in our SA.. Where with the interest from that max SA goes to ? Will it overflow to OA?
I believe the interest remains in SA. But it’s best to check with CPF on your query.
Hi the interest remains in SA after 161k. You will not be able to top up by cash or OA already so only monies going to SA is either your monthly pay contribution and interest from SA.
Thank you for your article. I had a great time reading it. Just have a few questions that i hope you can enlighten me on.
A little bit about my current situation. I am 35 this year. Currently… i have an outstanding housing loan of about $120k. My OA has about $15k, and my SA has about $27k. My wife and i have done a calculation and we should be able to finish paying for our flat in 4 years.
This is what i have in mind. Pls do give an assessment of its the correct way to make use of the cpf accounts. After finshing to pay for the flat, my OA will be wiped out and we plan to transfer any subsequent OA funds into SA funds. We do not foresee a need to have any OA funds as we will not be getting a 2nd property or upgrade.
(Q) Is it possible to transfer the OA to SA every month? Or do we have to wait to do it yearly? This is to enjoy 4% interest rather than 2.5%.
(Q) Lets say i have hit $161k (min sum), 7% of my salary will still be credited into my SA? Does it mean to say that i will not be able to transfer from OA to SA if the min sum has been met, but the interest earned from SA will continue to earn 4% interest?
Thank you for your time.
Thanks for dropping by my site. Based on my interpretation of the CPF regulations, here are my replies to your questions:
(Q) Is it possible to transfer the OA to SA every month? Or do we have to wait to do it yearly? This is to enjoy 4% interest rather than 2.5%. [Yes, I believe it can be done anytime and repeatedly within a year. The interest is computed monthly so there is added incentive to do it early.]
(Q) Lets say i have hit $161k (min sum), 7% of my salary will still be credited into my SA? [Yes] Does it mean to say that i will not be able to transfer from OA to SA if the min sum has been met, but the interest earned from SA will continue to earn 4% interest? [Yes, you cannot transfer from OA to SA after the FRS has been reached]
However, I suggest that you should email CPF to get a definite answer. I email CPF occasionally and they always reply my queries.
Hi there! Thanks for this insightful article! However, I’ve got 1 question, you mentioned that the interest for SA is 4%. However, 4% of 20K is 20,800 but your table shows that it’s 21,000. Why is that so
Thanks for letting me know. It was a typo. I have edited that row. The end result is still the same.
Hi there! I’ve been working for 4 years but only recently came to know about the benefits of transferring OA to SA, slow huh 🙁 I have already bought my BTO, a 3 room flat. They wiped out my OA of about 45k. Sadly I didn’t manage to do any transferring into SA. My question is, assuming my OA contribution per month is around $1.4k, and my monthly housing loan instalment is $650, should I transfer whatever ‘excess’ I have into SA, or use it to pay a lump sum towards my housing loan? I guess it should be pretty straightforward because SA offers a higher interest than the interest I’m paying for my loan (3.16%). Is there any other reason to keep some funds in my OA? Thanks!
I think you still have a relative headstart compared to your peers, so not to worry! Regarding your question, a few things that you would have to check first:
1) Does your bank allow you to make partial payments to your home loan without levying any prepayment penalty?
2) Do consider building an emergency CPF and cash fund. This is to insure you against any unexpected events such as job loss.
3) The first $20,000 in your OA can still earn interest of 3.5%. This is already higher than the interest that you have to pay for your home loan.
Thanks for your reply!
1) I am taking a HDB loan, with a view of re-financing to bank loan in future. The interest rate is at a non-concessionary rate, hence 3.16% (long story). No issue for partial payments for HDB loans, but I’ll remember to check with the bank if/when I do re-finance!
2) Yup yup. After spending big on reno (no installments taken), my first goal is to build up a cash emergency fund. Any excess cash I intend to put into SA. But for CPF, is it necessary to have an OA emergency fund?
3) Ah. So… it will be logical to leave $20,000 in OA as an emergency fund? And the rest to SA?
Thanks very much for the help.
I didn’t know that there are non-concessionary loans from HDB, guessed I learnt something new today. Yes, I think it is equally important to have OA emergency funds- treat it as an insurance for your home mortgage.. Cash is the most liquid and you may use it for other purposes, such as hospitalisation fees etc. If I am in your position, i would only consider transferring from OA to SA after I have set aside 20K in my OA. 3.5% interest is not too shabby either.
Thanks again, for your input 🙂 truth be told your background sounds similar to mine, having parents depend on me for retirement etc. Will be following your blog closely from here on!
Thanks Alicia. All the best on your financial journey
Hi, thank you for this useful article. I’m not savvy for numbers so hope you can shed some light for me. Thanks in advance.
I’m 50, I have about $170k in the OA and $35K in SA. So, in order to maximise my earnings, should transfer $130k from the OA to SA ?
It depends on your circumstances. Do you rely on your OA to service any outstanding mortgage of your home? Do note that in 5 years, savings from your SA and OA (if there are insufficient funds from SA) will be transferred to form your RA.
Thanks for your reply. No, I don’t any outstanding mortgage.
Some calculation on interest rate if you r able to help.
After setting aside my FRS, my OA stands at 150k and SA stands at 100k. What will be the yearly interest rate earn every year after 55. Tys
Based on my understanding, 6% for first 30K in RA, next 30K at 5% and remaining at 4%. OA should be 2.5%, SA should be 4%.
You may refer to this article: https://heartlandboy.com/cpf-extra-interest-rate-retirement-accounts/
Hi, may i know the risks/catches of transferring from OA to SA?
Is it that you cannot use the money in SA to buy houses?
I am a 27yo guy who just started working for about 2 years. I am currently renting my own room due to family issues and am not sure if i would buy a HDB when i turn 35 given that i am most likely remaining single.
Any advice on whether this transfer from OA to SA is appropriate for my case?
You will not be allowed to use the funds in your special account for housing or education purposes. So this is a major disadvantage and you would like to think more holistically before making the decision.
Though transferring OA to SA is something that is not new, many find it daunting to transfer as it is a “one-way trip” and won’t see it until he/she turns 55.
I’m turning 28 and have been working for 3 years. I am fortunate to accumulate quite a sum in my CPF account and have paid 1st 5% downpayment for my BTO with my SO. Recently, I just transferred some of my OA to SA and my current SA is >40k.
I understand that I will be able to earn extra 1% for the 1st $60K combined with up to $20k coming from OA. So my question is, if in the scenario(assumption) that the SA reaches $60k and OA has $0, will I still get to earn the extra 1%?
The answer is yes.
Congratulations of securing your BTO with your SO!
I do not contribute to CPF but only medisave. 45yo this year
I have a HDB paying cash every month. OA only $400 hahaaa
I’m interested in the CPF life, thinking getting my daughter to credit $500 every month to SA.. Can I still make it for the CPF life? If I cannot make it to the BRS, can I sign up for the CPF life for lower payout?
To my understanding, there is no “minimum amount” for CPF LIFE. If your SA is still below the FRS, your daughter is able to make monthly contributions. If you start today, you will credit 10X12X500 = $60,000 into your SA in total. This does not take into account interest rates.
I transferred all the available/allowed amount from the ordinary to special account in January 2016.
This is a decision which I do not regret at all.
Great. I have transferred from my OA to SA periodically as well.
Hope this blog is still active as I have a burning question.
I have just obtained our new BTO flat and is paying about 1300/month for our mortgage through my CPF OA. I am currently working freelance with variable income.
I am considering transferring my CPF OA to SA for myself and my spouse as we have sold our resale flat and the proceeds are back into my account.
My plan is like this :
1. Set aside 5 years of Mortage payment : 78,000 for 5 years
2. balance transferred to my SA first since I am reaching 55 in 6 years time.
3. set aside 50k for CPF- investment to take advantage of equity market in SG – preferably REITS or blue chips like DBS , Singtel ,etc
But I am confused, what is the difference between topping up CPF SA and CPF MA since both earn 4% interest ?
Your long answers are much appreciated.
Thanks for dropping by. This blog is absolutely active. An article is published once a week on average.
1. To better understand the mechanics of cash topping up MA, please refer to this blog article (https://heartlandboy.com/tax-relief-contribute-cpf-medisave/)
2. To better understand the mechanics of a cash top up to SA, pls refer to this article (https://heartlandboy.com/reduce-your-income-tax-expense-cpf-retirement-topping-up-scheme/) Note that transferring funds from OA to SA is not a CASH top up to the SA.
3. I would always top up MA over SA first as it is more liquid, i.e. I can access MA funds more readily such as for approved medical use. However, for your case, SA funds need not be as illiquid as you are reaching 55 in 6 years time. Should you meet the FRS then, you may be able to withdraw your SA funds, subject to meeting certain requirements. Withdrawal limits can be understood in this article. (https://heartlandboy.com/money-withdraw-from-your-cpf-at-55/)
I find your blog very informative. Thank u.
I have a question bothering me.
We all have HDB loan which we are trying to pay off asap.
Looking at this made me wonder if I have extras in OA after the monthly HDB repayment, should I be transferring them to SA instead of using them to pay off HDB loan.
Cause I am thinking about the accured interest CPF made us pay if we sell the HDB.
Thank you for your compliments. For my own scenario, I ensure that I have at least 6 months worth of mortgage sitting inside my OA to act as emergency funds. Most importantly, I am not a financial advisor and am not licensed to provide financial advice.
Hi there, I’m considering use of my cpf OA to pay for my outstanding mortgage with the bank. There will be interest owing to own cpf accounts hence. Assume I don’t ever pay this (principal and interest accrued) back into cpf, but have the FRS amount in my SA by the time I’m 55, does this mean I won’t have to “pay back” what’s owing to my OA by then?
To my knowledge, I understand that one only need to pay back the accrued interest if one sells their property.
Ricky Law says
hi, I am seeking for some advices here… for reference, I am 37 years old, my OA has 25K, SA has 20K
I recently bought a resale HDB and serving a housing loan (from bank) which need to pay 1.3K per month.
I am paying all these 1.3K from cash, not using OA, because I want to keep my CPF money to earn interest…
on top of that, I do have some extra saving which I am thinking to do cash top up to my SA account,
say I am doing 7K top up total in a year to SA, at the same time, I also want to finish my mortgage earlier and so I plan to take 7K from OA to pay the house loan…
do you think it is a good idea? I am seeing few benefits:
1) I got tax relief of that 7K in a year because I do cash top up
2) I kind of earn more interest in this way…. as in SA for 4% (potentially more since I try to keep OA low and SA more)
3) I am still flexible in case I need to use money urgently. (e.g. I skip to do this in that year if I need the money)
please let me know if above is feasible, thanks, Ricky
Thanks for writing in. What you plan to do sounds like a great plan! it seems to me like a prudent way of building up your retirement funds.
Hi im Ash, im just a young guy living an ordinary life, i have 4K in my OA and 4K on my SA right now, the hdb minus 370 monthly from my OA, so technically i think by transferring half of my OA wont cause me anytg as long as im working. But is it a good idea to do so? Im 26 tho :/
Given the uncertainty in the current economic climate due to Covid-19, it may be wise to ensure you have some emergency savings in your OA
Your article is great info to many people! Few questions that I appreciate your expert knowledge:
a. I understand that OA to SA is perfectly prudent and sound. Is this still possible or allowable to transfer balance from OA to SA after age 55, assuming that the person has already hit FRS or even ERS in his/her RA?
b. To maximise monthly payout from CPF Life, assuming that the person has opted for ERS at age 55, is it advisable to use SA top up to prevailing ERS from age 56 to age 65? or is it better to leave the fund in SA to appreciate 4% per annum?
Thanks, let me try to address your queries to my understanding:
B. Funds in both SA and RA earn the same interest rate
Chai F says
What if I already have more than 181k in my SA account? Can i still transfer money into the account? Does the amount above 181k still earns the 5% interest?
If you SA already reached FRS, you cannot transfer from OA to SA anymore.
I understand that you can top up to prevailing ERS every year from age 56 to 64.
1. Can use SA to top up to prevailing ERS each year?
2. Or does it makes more sense to keep the SA roll by 4% and just do a 1 lump sum top up at 64? Instead of topping up every year from 56 to 64
2. No difference because both SA and RA compound at same interest rate of 4%.
Answers are based on my own knowledge, best you check with a CPF officer.
Your article and messages in this blog has given useful info to me.
I am Single PR for 12 yrs and I am not aware of this transfer from OA to SA till now and missed the opportunity of 4% INT in SA .
I have in OA 146K , SA – 64K , MA – 60K . I have not bought any property here in SG.
Should I transfer now from OA to SA . what is the max allowed for my case.
Thanks for your compliments. You can continue to transfer from OA to SA until your SA has reached the full retirement sum