general
Understanding CPF Ordinary, Special, and MediSave Accounts in Singapore
A plain-English guide to the functions, interest rates, usage, and common misconceptions of Singapore's CPF Ordinary, Special, and MediSave accounts for residents and new immigrants.
What are CPF accounts and why do they matter?
The Central Provident Fund (CPF) is Singapore’s mandatory social security savings scheme. It helps residents and new immigrants save for retirement, housing, and healthcare through contributions from both employees and employers. Your CPF savings are channeled into three main accounts: Ordinary Account (OA), Special Account (SA), and MediSave Account (MA). Each account serves a different purpose and earns different interest rates.
Functions and usage of each account
Ordinary Account (OA)
The OA can be used for housing (purchasing an HDB flat or private property, paying monthly mortgages), education (paying for yourself or your children’s approved courses), and investment (through the CPF Investment Scheme for approved products). For example, if you are buying your first HDB flat, you can use your OA savings to pay the down payment and monthly installments.
Special Account (SA)
The SA is primarily for retirement savings. You can also invest some of your SA savings under the CPF Investment Scheme, but the main goal is to build a nest egg for your later years. It cannot be used for housing or education.
MediSave Account (MA)
The MA is for healthcare expenses. You can use it to pay for hospitalization charges, certain outpatient treatments, and health insurance premiums (such as MediShield Life). For instance, if you undergo a day surgery, you can use your MA to cover the bill.
Interest rates for each account
Interest rates are reviewed quarterly. The OA earns up to 3.5% per annum; the SA and MA earn up to 5% per annum. The first $60,000 of combined balances (with up to $20,000 from OA) earns an extra 1% interest. For members aged 55 and above, there is also extra interest on the first $30,000 of combined balances (with up to $20,000 from OA).
| Account | Base Interest Rate (p.a.) | Extra Interest Conditions |
|---|---|---|
| OA | Up to 3.5% | Extra 1% on first $20,000 of OA in the first $60,000 |
| SA | Up to 5% | Extra 1% on first $60,000 (including OA) |
| MA | Up to 5% | Same as SA for extra interest |
Access rules, withdrawal, and transfer strategies
You can generally withdraw your CPF savings when you reach the payout eligibility age (currently 65). If you meet the Full Retirement Sum, you can withdraw the excess. For housing, OA can be used before retirement, but the amount used plus accrued interest must be returned when you sell the property to restore your retirement savings.
You can also transfer OA savings to SA to enjoy higher interest rates, but such transfers are irreversible. Some people do this to boost their retirement funds early. However, remember that OA funds are more flexible for housing or education needs.
Common misconceptions and pitfalls
- Misconception: “CPF savings are locked away until 65.” Reality: You can use OA for housing, education, and some investments before that age.
- Pitfall: Overusing OA for housing without considering the accrued interest you must repay, which could reduce your retirement savings.
- Misconception: “MediSave is enough for all healthcare costs.” Reality: MA is a savings account with limits; large hospital bills may still require out-of-pocket payment or insurance.
Frequently asked questions
Q: What happens to my CPF savings if I leave Singapore permanently? You can withdraw your CPF savings when you leave Singapore and West Malaysia permanently.
Q: Can I use my OA to buy a second property? Yes, but only after setting aside the Basic Retirement Sum in your OA and SA, and you cannot use OA if you already have an outstanding HDB loan.
Q: How does the extra interest work? The first $60,000 of your combined CPF balances earns an extra 1%. This applies across OA, SA, and MA, with OA capped at $20,000. From age 55, there is also an additional extra interest on the first $30,000.