CPF Optimisation

Most CPF articles explain what the accounts are. OA for housing, SA for retirement, MediSave for healthcare — you’ve read that before. This isn’t that article.

This is what I actually do with my CPF, the decisions I’ve made along the way, and the thinking behind them. Some of it I figured out early. Some of it I got wrong first.

The basics, quickly

Every month, 37% of your salary goes into CPF — 20% from you, 17% from your employer — on ordinary wages up to $8,000/month (as of Jan 2026). That money splits across three accounts:

• Ordinary Account (OA) — earns 2.5% p.a., can be used for housing, education, and certain investments
• Special Account (SA) — earns 4% p.a., locked for retirement
• MediSave (MA) — earns 4% p.a., for healthcare expenses and approved insurance premiums

The first $60,000 (up to $20,000 from OA) earns an extra 1% bonus interest. So effectively: OA earns up to 3.5%, SA and MA earn up to 5%. All guaranteed by the government. No market risk.

That’s the textbook version. Here’s mine.

My OA — invested, then pulled back out

From 2020, I invested my CPF OA funds through Endowus. Back then, I didn’t have a clear idea of when I would be getting a house, and thought it was better to gun for better returns. The returns were good — better than the guaranteed 2.5% over that period, which validated the decision at the time.

But just this year, I took profit and moved everything back to earn the guaranteed 2.5%.

The reason wasn’t fear that markets have recently hit all-time highs. It was timing. We are looking at buying a property in the next one to two years, and OA funds are what you use for the downpayment and mortgage. Having them locked in an investment when I need to deploy them into a property purchase is a risk I don’t want to take. The market will not necessarily fall and may continue to make higher highs, but at this point I care more about the certainty than extra return.

2.5% guaranteed on a $200K balance is $5,000 a year with zero risk. For money I know I’ll need very soon, that’s the right trade-off.

The lesson: Investing CPF OA makes sense when your OA is a long-term pot you won’t touch. The moment you have a specific deployment timeline — housing, in my case — the guaranteed return is more valuable than the potential upside.

My SA — leave it alone and let it compound

My SA earns 4% guaranteed. My job is not to touch it.

The SA is the most powerful compounding engine in my entire financial picture — not because 4% is an extraordinary return, but because it’s guaranteed, it compounds continuously, and there’s no temptation to fiddle with it because you can’t access it anyway.

The goal is to build toward the Full Retirement Sum (FRS) as quickly as possible. The FRS increases every year — for 2026 it’s $220,400, for 2027 it’s $228,200 — so there’s always a moving target to chase.

I’ve also stopped making voluntary top-ups from OA to SA. It used to make sense when SA was earning 4% and OA was only 2.5% — but the transfer is irreversible, and I need OA liquidity for the property purchase. Once that’s done, I’ll revisit.

I’ve also stopped making voluntary cash top-ups from OA to SA. The transfer is irreversible, and I need OA liquidity for the property purchase coming in 1–2 years. Once that’s settled, I’ll revisit whether additional SA top-ups make sense within the annual $8,000 tax relief cap.

When will I hit the FRS? My MA is already at the Basic Healthcare Sum ($79K). This matters more than most people realise — because once MA hits BHS, the MA portion of monthly CPF contributions (9% of wages for age 36–45) overflows into SA first, not OA. So my SA is currently receiving 16% of monthly wages: 7% normal allocation plus 9% MA overflow. At $8,000 OW ceiling that’s $1,280/month going into SA every month.

With $159,000 current SA balance, $1,280/month contributions, and 4% compounding, I’m projected to hit the FRS at around age 40 in 2029 — without any additional voluntary top-ups. Three years away, and it happens automatically just from mandatory contributions.

What happens when SA hits FRS? Once SA reaches the FRS, two things change. First, my monthly SA contributions don’t stop — they continue flowing in and compounding at 4%, growing SA beyond the FRS. There’s no hard cap on SA before 55, so higher balances mean higher CPF LIFE payouts at 65. Second, the overflow logic changes: once both MA has hit BHS and SA has hit FRS, the MA overflow portions redirect to OA. At that point OA starts building up faster, which is useful for housing or future deployment.

My MediSave — top up to the Basic Healthcare Sum every January

This is the one active thing I do with CPF every year and it’s worth doing if you haven’t started.

Every January, I check my MediSave balance and top it up to the Basic Healthcare Sum (BHS) — the cap for MediSave, which for 2026 is $79,000. The amount I top up counts as a tax relief, which reduces my chargeable income for that year.

Once MediSave hits the BHS, future contributions overflow automatically into the SA — which earns 4%. So topping up MediSave effectively accelerates SA growth while giving me a tax deduction in the same move.

The combined relief from MediSave top-up and SA top-up is capped at $8,000 per year. So my approach is: calculate how much I need to top up MediSave to hit BHS, use that amount first, then direct the remainder of the $8,000 cap toward SA top-ups. Two benefits from one annual action.

What I don’t do — and why

I don’t invest OA funds anymore — at least not until the property purchase is settled. After that I’ll reassess depending on how much OA remains and what the timeline looks like for the next deployment.

I don’t make large voluntary SA top-ups — the irreversibility is the issue. Once cash goes into SA, it can’t come back out until retirement. For someone who might need capital for a property purchase or a business, that liquidity matters. I’ll top up within the tax relief limit, but I won’t go beyond what gives me a deduction.

I don’t stress about the OA-SA transfer — a lot of people chase the OA-to-SA transfer to earn 4% on OA funds before 55. It made more sense before the SA shielding strategy changed. For my situation right now, with a property purchase on the horizon, keeping OA as OA is the right call.

The one thing most people don’t do

Log in to cpf.gov.sg once a year and actually look at your balances. Check that your employer has been contributing correctly. See how far you are from the FRS. Look at when your MediSave needs topping up.

It takes 10 minutes. I’d guess fewer than half of working Singaporeans have done this in the last 12 months. Your CPF is probably your second or third largest financial asset — it deserves 10 minutes of attention once a year.

Related: Income Tax Calculator — see how MediSave and SA top-ups reduce your actual tax bill