You will be able to name each CPF account and what it is for.
Log in to the CPF website for the first time in a while and you see a set of balances that are larger than you expected and harder to explain. There is an Ordinary Account, a Special Account and MediSave, each with its own figure, and they do not grow in step. Many people in their twenties have never asked why the money is split, or what each pot can do.
This lesson goes through the accounts one at a time. By the end you can look at your own balances and say what each one is for.
Every month, your contribution and your employer's go into CPF, as lesson 2.1 showed. The CPF Board then splits that money between your accounts according to allocation rates that depend on your age. While you are young, the largest share goes to the Ordinary Account. As you get older, more goes to the Special Account and MediSave.
The allocation rates change from time to time, so check the current table on cpf.gov.sg rather than relying on a figure you remember. Your own transaction history shows how each month's contribution was split.
The Ordinary Account, or OA, is the most flexible of the three. It can be used for housing, which is its biggest use for most people: the down payment and monthly loan repayments on an HDB flat or private property, within rules on how much can be used. It can also pay for approved investments under the CPF Investment Scheme, for tertiary education at approved local institutions under the CPF Education Scheme, and for some insurance, such as premiums for the Dependants' Protection Scheme and the Home Protection Scheme.
Because it does so much, the OA is also the account that gets spent. If you buy a home, most of your OA may go into it for years, and that money is not growing for retirement in the meantime. Lesson 5.2 comes back to that trade-off.
The Special Account, or SA, is for retirement. It is harder to use for anything else, and in return it earns a higher interest rate than the OA. Money that sits here quietly compounds for decades.
That higher rate is why some people move money from the OA to the SA, or top up the SA with cash. The move cannot be undone, so it only makes sense for money you are sure you will not need for housing. Lesson 5.3 covers top-ups, and CPF Mastery: every account and the choices you control goes into the detail.
The MediSave Account pays for approved healthcare costs: hospital bills, some outpatient treatments for chronic conditions, and premiums for MediShield Life and part of an Integrated Shield Plan, as lesson 4.1 explained. You can also use it for approved costs of close family members, such as a spouse, children or parents.
Each use has a limit on how much can be drawn, and those limits are on cpf.gov.sg. MediSave also has a cap on how much it can hold. Once you reach it, further contributions to MediSave flow into your other accounts instead. Check the current cap on the CPF website.
When you turn 55, the CPF Board creates a Retirement Account for you and moves savings into it from your other accounts, up to a retirement sum. That account later funds your monthly payouts through CPF LIFE, which lesson 5.3 covers. The rules on what moves, from which account and how much you can withdraw are set out on the CPF website, and they have changed in recent years, so read the current version when you get closer to 55 rather than relying on what an older relative went through.
A word on interest. Each account earns its own rate, set by the CPF Board under rules that link some rates to market rates with a floor. CPF also pays extra interest on the first part of your combined balances. All of these are published on cpf.gov.sg and reviewed regularly, so look them up rather than quoting a figure.
Here is an example with made-up figures. Wei Ling, 29, from lesson 1.3, logs in and sees S$32,000 in her OA, S$11,000 in her SA and S$14,000 in MediSave, S$57,000 in total.
She reads them like this. The S$32,000 in her OA is what she could put towards a flat, and she has not used any of it yet. The S$11,000 in her SA is retirement money, and it earns the higher rate. The S$14,000 in MediSave has paid her MediShield Life premiums each year, and she plans to check whether it has paid for anything else.
Your own figures will be different, but the reading works the same way. Log in to cpf.gov.sg with Singpass, open your account balances and your transaction history, and have a notebook ready for each account.
Log in to your CPF account and write down the balance of each account and what you have used it for so far.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).