Say how your monthly CPF contribution is split and what each account can and cannot pay for.
A month after her first payday, Hui Min logs in to her CPF account expecting to see one balance of S$1,480, the total monthly contribution shown on her payslip (an invented example). She finds three separate balances that add up to S$1,480.
Her colleague Arjun, who started work a year earlier, looks at her screen and says the money "gets split". He does not know how.
Each month, your contribution and your employer's contribution go into CPF together. The CPF Board then splits the total across three accounts: the Ordinary Account (OA), the Special Account (SA) and MediSave. Hui Min's S$1,480 went S$900 to her OA, S$250 to her SA and S$330 to MediSave. S$900 + S$250 + S$330 = S$1,480, so the full amount arrived, divided across the three accounts.
The split is set by allocation rates, the share of each month's CPF money that goes to each account. They depend on your age. When you are young, the OA gets the largest share. From age 55, the contributions that would have gone to the SA go to your Retirement Account (RA) instead, up to the Full Retirement Sum (FRS). Once you have set aside the FRS in your RA, those contributions go to your OA. The current allocation table and the current FRS are published by the CPF Board on cpf.gov.sg, and your own transaction history shows exactly how each month's contribution was split.
In your first year of work, only a few uses of each account matter, and those are the ones described below. Lesson 5.1, "Your CPF accounts at a glance", in the course "The Singapore personal finance system, end to end", is the longer version.
The OA is the most flexible of the three. For most people its biggest use is housing: the down payment and the monthly repayments on an HDB flat or private property, with limits on how much you can use.
It also pays for approved tertiary education at local institutions through the CPF Education Scheme. If your parents paid your fees from their OA, this is the scheme they used. Module 5 covers it in detail. The OA can be used for some investments under the CPF Investment Scheme, and it can pay certain insurance premiums, such as those for the Dependants' Protection Scheme.
No CPF account pays for rent, bills or groceries directly. While you are working, your spending plan has to run on your take-home pay alone. When you retire, your CPF savings can give you a source of funds to meet your daily expenses.
The SA is for retirement, and it is much harder to use for anything else. It earns a higher interest rate than the OA. Because of that gap, some people later move money from their OA to their SA. The transfer is one-way, so it only suits money you are sure you will never want for housing.
Interest rates on all the accounts are set by the CPF Board under published rules, and CPF pays extra interest on the first part of your combined balances. Check the current rates on cpf.gov.sg instead of quoting one from memory.
MediSave pays for approved healthcare costs, such as hospital bills and some outpatient treatment for chronic conditions, with limits for each type of use. It pays the premiums for MediShield Life, the basic national hospital cover. If you choose to have an Integrated Shield Plan, an optional health insurance plan, MediSave can pay part of its premium. When you compare health insurance later, part of the cost may come from MediSave and not from your take-home pay. The limits on what MediSave can pay are published on cpf.gov.sg. Module 6 covers the Dependants' Protection Scheme, MediShield Life and Integrated Shield Plans.
CPF rules change. Allocation rates, interest rates, withdrawal limits and the uses allowed for each account have all been revised over the years, and some of those changes made older advice wrong. A friend's screenshot, a forum post from three years ago or a relative's memory may describe rules that no longer apply.
Use two trusted sources:
The CPF Board website, cpf.gov.sg, for the current rules, rates and limits. Your own CPF account, opened on cpf.gov.sg or in the CPF app with Singpass, for your actual balances, each month's contribution and how it was split.
When Hui Min learns that Arjun has never once checked whether his contributions arrived, she decides to check her account every month, at least for her first year. Her first step is to look at this month's numbers herself.
Log in to your CPF account on cpf.gov.sg or in the CPF app with Singpass, open your transaction history, and find this month's contribution and how it was split across your OA, SA and MediSave.
Log in to your CPF account with Singpass. Note this month's contribution and how it was split across the three accounts.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).