Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Wednesday, 30 October 2019

CPF for Young Adults

Image may contain: 1 person, text

CPF, in short for Central Provident Funds, is a "social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, homeownership, family protection and asset enhancement.".

This is quoted from the CPF website and as defined by CPF. While most people would think that CPF is only for old people, youngsters should definitely not neglect it. This is especially true due to the magic of compounding interest. So what are the schemes that people in their 20s should know?

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, one point to note is that this is effectively a LOAN from whoever's CPF you are using to pay for your education. Hence, it is necessary to pay back this loan with interest. The effective interest rate payable is then pegged to the OA interest rate, which is adjusted quarterly.

The student has to start 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.

2. CPF Investment Scheme
As we graduate and take on our first job, it is imperative to consider investing for retirement. If you are thinking of that, then this is the scheme that you do not want to miss out. This scheme allows you to invest your Ordinary Account (OA) and Special Account (SA) savings in a wide range of investments.

Conditions to be met before you can adopt this scheme:
  1. are at least 18 years old;
  2. are not an undischarged bankrupt;
  3. have more than $20,000 in your OA; and/or
  4. have more than $40,000 in your SA.
You can find the range of products which you can invest in here. One of the products is Exchange Traded Funds (ETFs) which our blog had been advocating!
3. CPF Nomination Scheme
We might be thinking we are so young, filled with hope and energy. Death might be the least of concern. This is especially so after the recent hoo-hah, where CPF stated that CPF funds are not covered under a will.

For more info:

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.

Here are some other information that are useful to you!

What does a CPF Nomination cover?

Covered under CPF NominationNot 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)

More information can be found here:

CPF is definitely not an organisation for the elderly. In fact, youngsters should harness such national scheme, especially since it affects us for the long term!

Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

Have feedback? Tell us now!

Subscribe to us or
Follow us: Investment Stab on Facebook

Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
Share this :


  1. Hahaha! You forgot the most important thing about CPF that people use for .... paying for their residential property!

    The other important thing is using CPF to pay for Medishield & private Shield plans.

    1. Hi,

      The housing thing is quite obvious - if not it's the only thing people think CPF is for ��
      But CPF is definitely more than just housing - besides, for 20 something, housing is probably still a little far for them ��

    2. You forgot is our hard earn money, but cannot use and take out As And when we are in urgent need, worst than safe at bank.

    3. Many still choose to top up every help someome meet kpi? And top up to $1m. Joker.

  2. For education loan, one can only loan up to 40% of what is in the OA. Undwr normal situation, its manageable but there are some cases which are not.
    My friend's highly talented child went to NTU LKC School of Medicine, which has a 5 years total tuition fee of almost $200K. How much does his parents need to have in the OA to cover just the tuition fee? Half a milion dollars! How many of us have so much money in the OA alone? So when you write please be comprehensive and dont ignore the crucial informations and terms & conditions.

    1. Hi,

      You are right, there is a limit on how much of a person's OA can be used for education: 40%. The child can also use both parents' CPF OA. There are also bursaries, scholarships, etc that can aid in a students' education journey.
      I do agree with you that this article might be short on details, but what we hope to show here is to inform our readers what CPF can do for them.
      We could go in-depth about the process and conditions attached to every policy but that would make this article way too long.
      We think it might be better for readers if we do such specific topic articles as a separate article.

      Nonetheless, thank you very much for your support and feedback.
      We always appreciate our readers commenting on our blog, providing feedback, sharing their views, and connecting with us.

      Please do keep them coming! 😁