Understanding Your CPF Accounts
The Central Provident Fund (CPF) is Singapore's compulsory savings scheme, and it underpins nearly every major financial decision you'll make as a resident — from buying a home to paying for hospital stays to retiring comfortably. Yet many people, including long-time residents, don't fully understand how the three core CPF accounts work. This guide changes that.
The Three CPF Accounts
1. Ordinary Account (OA)
The Ordinary Account is the most flexible of the three. It earns a base interest rate of 2.5% per annum and can be used for:
- Purchasing HDB flats or private property (under CPF Housing Scheme)
- Paying HDB housing loans or approved bank loan instalments
- CPF Investment Scheme (CPFIS) — investing in approved unit trusts, shares, and more
- Paying for approved education courses (CPF Education Scheme)
- Life insurance premiums
A portion of your monthly CPF contributions flows into the OA. As an employee below 55, you contribute 20% of your gross salary to CPF, and your employer contributes an additional 17% — a total of 37%, split across all three accounts according to your age.
2. Special Account (SA)
The Special Account is designed for retirement savings. It earns a higher interest rate of 4% per annum, making it a powerful long-term savings vehicle. The SA has more restrictions on withdrawals, which is by design — it's meant to grow untouched until retirement.
- Funds can be used for CPF-approved retirement financial products
- Can also be invested via CPFIS-SA (in a more limited range of products)
- At age 55, your OA and SA balances combine to form the Retirement Account (RA)
Note: From 2025, the Special Account will be closed for members aged 55 and above as part of the CPF LIFE restructuring. Savings will be transferred to the RA and OA.
3. Medisave Account (MA)
The Medisave Account is ring-fenced for healthcare expenses. It earns 4% per annum and can be used for:
- Hospitalisation costs at approved hospitals
- MediShield Life premiums (Singapore's national health insurance)
- Approved Integrated Shield Plan (IP) premiums
- Day surgery, outpatient treatments for chronic conditions
- Certain outpatient care for yourself and immediate family members
The Medisave account has a Basic Healthcare Sum (BHS) cap. Once your MA exceeds this cap, additional contributions overflow into your SA (or RA if you're 55+).
How Contributions Are Split (Below Age 55)
| Account | Employee Contribution | Employer Contribution | Interest Rate |
|---|---|---|---|
| Ordinary Account | ~23% of total CPF | ~62% of total CPF | 2.5% p.a. |
| Special Account | ~32% of total CPF | ~16% of total CPF | 4% p.a. |
| Medisave Account | ~45% of total CPF | ~22% of total CPF | 4% p.a. |
Note: Exact allocation ratios vary by age. Older workers receive a higher proportion into Medisave. Always check the CPF Board's current allocation tables.
Practical Tips for Maximising Your CPF
- Voluntary top-ups to SA: You can make cash top-ups to your SA (and your family members' SA) under the Retirement Sum Topping-Up Scheme and enjoy tax relief.
- Don't over-use OA for housing: Every dollar withdrawn from OA for housing must be returned with accrued interest when you sell — factor this into your property planning.
- Let compound interest work: The 4% interest on SA and MA compounds annually. Starting early makes a significant difference over a 30-year career.
- Check your CPF statement regularly: Log in to my.cpf.gov.sg to track contributions, interest earned, and projected retirement savings.
Understanding your CPF accounts is foundational to sound financial planning in Singapore. Whether you're buying your first home, planning for retirement, or managing healthcare costs, knowing how each account works puts you in control.