CPF 101: Knowing your CPF Account

Today's post is contributed by a reader.

CPF contributions by yourself (20% of monthly wage) and your employee (14.5% of monthly wage)* are allocated into three accounts: 

Ordinary (66.7% of contribution*, interest rate: 2.5%) – for insurance, investment, buying a home and education 

Special (14.5% of contribution*, interest rate: 4%) – for investment in retirement-related products 

Medisave (18.8% of contribution*, interest rate: 4%) – for hospitalization expenses and approved medical insurance 

You may wish to transfer some of your money from the Ordinary account to the Special account in order to enjoy better interest rates.

*Rates are for those below the age of 50 who are employees in the private sector, Government non-pensionable employees, non-pensionable employees in statutory bodies and aided-schools, or Singapore Permanent Resident employees from their third year onwards. For others, see http://mycpf.cpf.gov.sg/Members/Gen-Info/Con-Rates/ContriRa.htm 

Voluntary contributions beyond your monthly CPF deductions are also possible. You may also choose to contribute to your parents’, spouse’s or siblings’ CPF accounts. These contributions may grant you tax relief. However, do note that any transfer is irreversible, and should thus only be done if you are sure that you will not need the money for buying a home or your children’s education etc.

Using the CPF caluculator (https://www.cpf.gov.sg/cpf_trans/ssl/financial_model/oa2sa/oa2sa_cal.asp?prof=&src=RNR), you can estimate how much more interest you can get by transferring money from your Ordinary Account to your Special Account.