Monday, 18 September 2017

Peep into the 19 year old student's CPF Account - Transfer from OA to SA

Years ago, I used to hate the concept of CPF deduction from my part time job, as I felt that it is eating 20% of my salary away which I could channel it into buying things I love. However, I do realize that after 3 or 4 years of working in part time jobs that has taken my CPF, lately I've fallen in to love with what it is able to do for me. Also the sweet 17% additional contribution from my employers is doing great inside too.

Let's have a look at the various types of CPF Account:
There's 3 different type of CPF Accounts:
  1.  Ordinary Account (OA)
  2.  Medisave Account (MA)
  3.  Special Account (SA) 
Adopted from CPF Website
 Now let's take a look at the different interests each account is able to offer you.

Adopted from CPF Website

Now, knowing that the OA offers 3.5% interest per year for the first 20,000 (2.5% for balances above 20,000) and MA & SA offering up to 5% interest for the first 40,000 (4% for subsequent balances). My OA to SA transfer will gets me 1.5% more of interests!! CPF Accounts are just like a "high-yielding bank account" and no risks is involved.

Earlier on yesterday, I've just done a CPF OA to SA transfer. Presently, I do not have any mortgages to be worried about that will require my CPF OA account. This is done to maximize the interest gain and allowing my money inside to work harder for me, while I do not need any funds from the Ordinary Account.

I've also stolen an excel from KPO to play around with the numbers. A strange coincidence that we've done the SA transfer on the same day! LOL. Here's a look at my forecast from the excel if I were to stop working and officially "retire", this is how much I'd have when I'm 47 in 2045.

Meanwhile to me, this account represents a high yielding retirement tap.

Using CPF to invest in shares??
To participate in CPF Investment Scheme (CPFIS), a minimum sum that is required in the OA (CPFIS-OA) is $20,000. Likewise for SA (CPFIS-SA), you will need to set aside $40,000 in your SA. Currently, I'm do not have the sum in the accounts, as such, the best way to maximize it is to transfer into my SA account.

At the same time, I'd also wish to express that, should I have enough money in these accounts, nothing beats the word "risk-free" and the ability to sleep everyday in peace without having to worry and do homework about your investments you've made with CPFIS. Nonetheless, should opportunities present themselves and due-diligence is done, CPFIS is a considerable option.

Now after so much words.. let's have a peep into my CPF account after I've done the full transfer of OA to SA.

Read: CPF Milestone ($40k in Special Account) and The Power of Compound Interest
Do note that OA to SA transfers are irreversible. 
More details can be found here from CPF's Website.

Edited 18/09/17: 
Wondering if the transfer of OA/SA suits you? 
Read: The Dilemma of Young Personal Financial Investment Influencer


  1. Do note that the earliest you are able to access your CPF SA funds is 55.

    1. Hi betta man,

      Thanks for dropping by:)

      Yes I do know that. Though it is way earlier that this has started but this will also mean that the compounding effect will be way stronger. At the same time, i do not need the funds in OA for mortgages and all at the moment and definietly not within the next few years.

      Hence, I believe that the "headstart" now shall be put into a good use to fund for my retirement (55) which is 36 years later :)

  2. The saying that the earliest that it can be accessed is 55 comes with 2 BIG caveats:-

    a) Your SA contains more than the FRS for your cohort (or at least the BRS with property pledge). You must also meet the Medisave BHS for your cohort as well.


    b) There is no major policy changes to the age 55 timeframe or treatment of SA/OA monies.

    For (a), the earlier you put in money into SA & Medisave for compounding the faster you can meet this requirement.

    For (b), hey fingers crossed! Hahaha!!!

    1. Hi Spur,

      Agree!! To me, the account is a high yielding "bank account" that allows me to withdrawal at the later stage. Right now, 3.5% vs 5%... I'll be looking to the 5 to let it do some extra work :p

      Yea for (b), towards the treatment of SA/OA.. fingers crossed...

  3. Haha. Never steal la. I put there for everyone to use :) Not bad hor. 8k compound until 44k.

    1. Hi KPO,

      Ya leh. 8k compound until 44k. If I don't work anymore, assuming the regulations for CPF and all did not change, I'll hit the minimum amount for investment in CPFIS-SA when I'm 47 to take part in the CPF investment scheme.. HAHAHA