A Complete Guide to Understanding CPF (2025)

Updated: 14 Apr 2026

CPF might seem complicated at first — but once you understand how it works, it becomes a powerful way to grow your wealth, protect your health, and secure your future.

What is CPF?

If you’re a Singapore Citizen (SC) or Permanent Resident (PR) in a 9-to-5 job, you and your employer contribute a percentage of your monthly salary to your CPF. These contributions are then funneled into three (or four) different accounts.

» MORE: A complete guide to CPF in Singapore

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CPF Contribution Rates 2026

Your contribution rate depends on your age and monthly salary. The Ordinary Wage (OW) Ceiling has completed its phased increase and is now S$8,000 (effective 1 Jan 2026). The Annual Salary Ceiling remains at S$102,000.

CPF contribution rates for SC/PR (after 3rd year)

Employee’s Age	Employer (% of salary)	Employee (% of salary)	Total (% of salary)
55 and below	17%	20%	37%
Above 55 to 60	18%	16%	34%
Above 60 to 65	12.5%	12.5%	25%
Above 65 to 70	9%	7.5%	16.5%
Above 70	7.5%	5%	12.5%

Note: Rates for workers aged 55 to 65 were increased on 1 Jan 2026 to boost retirement adequacy.

» MORE: 4 reasons why you should voluntarily contribute to your children’s CPF

Types Of CPF Accounts

1. Ordinary Account

Your OA is the most flexible of all CPF accounts. It supports:

Housing

Pay for HDB flats, service mortgage loans, and even private properties.

» MORE: 6 misconceptions about using your CPF for housing

Insurance

Use OA funds to pay for premiums under schemes like the Home Protection Scheme.

Education

Fund subsidised tuition fees for approved courses at local tertiary institutions.

Investment

You can invest OA savings through the CPF Investment Scheme - OA (CPFIS-OA) into instruments such as unit trusts, fixed deposits, and ETFs to potentially grow your funds.

» MORE: What a CPF account can be used for

2. Special Account

SA is designed to encourage long-term savings:

Earns a higher interest rate to help grow your retirement funds faster.
Funds here can also be invested via CPFIS-SA, but only into low-risk instruments like government bonds and selected funds.
SA savings cannot be used for housing payments.

3. MediSave Account

MediSave ensures you are covered for healthcare needs:

Can be used for hospitalisation, day surgery, and outpatient treatments.
Pay premiums for insurance schemes such as Integrated Shield Plans.
Once the Basic Healthcare Sum (BHS) is reached, any excess will automatically flow to your SA or RA, boosting your retirement savings.

4. Retirement Account

Created when you turn 55, the RA consolidates your SA and OA balances:

Funds here provide payouts via CPF LIFE, which offers a choice of Basic, Standard or Escalating plans.
Enjoys the highest interest rates among all CPF accounts to help stretch your retirement dollars.

» MORE: Apply for a CPF personal loan

How do CPF contributions work?

CPF contributions are shared between you and your employer:

Employee contribution: Up to 20% of monthly salary
Employer contribution: Up to 17% of monthly salary

However, this is subject to a monthly salary ceiling of $6,800. This means any wages above this amount do not attract CPF contributions.

CPF contributions apply to:

Ordinary Wages (OW): Monthly salary
Additional Wages (AW): Bonuses, commissions and other irregular payments (subject to an annual cap)

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CPF Interest Rates (April – June 2026)

he Singapore government guarantees a floor interest rate for all accounts.

Ordinary Account: 2.5% p.a.
Special, MediSave and Retirement Accounts: 4.0% p.a.

Extra interest on CPF savings

To help grow your savings faster, the government pays extra interest:

For members below age 55: An extra 1% p.a. on the first S $60,000 of combined balances (capped at S$ 20,000 for OA).
For members aged 55 and above: An extra 2% p.a. on the first S $30,000 and 1% p.a. on the next S$ 30,000 of combined balances.

CPF Retirement Sums (2026 Cohort)

When you turn 55, your Retirement Account (RA) is created. The amount you set aside determines your monthly payouts under CPF LIFE.

Retirement Sum	Amount (For those turning 55 in 2026)
Basic Retirement Sum (BRS)	S$110,200
Full Retirement Sum (FRS)	S$220,400
Enhanced Retirement Sum (ERS)	S$661,200

Note: The ERS is now 4 times the BRS (effective 2025) to allow members to receive even higher monthly payouts.

» MORE: Pros and cons of keeping your savings in your CPF Special Account

CPF contribution caps

There are limits to how much you can contribute:

Monthly salary ceiling: $6,800
Annual limit: $41,000 (inclusive of mandatory and voluntary contributions)

What is the Basic Healthcare Sum (BHS)?

he BHS is the maximum amount you can keep in your MediSave Account.

For 2026: The BHS is S$79,000.
Once you turn 65, your BHS is fixed for the rest of your life. Any excess contributions will flow to your Retirement Account (if 55+) or Ordinary Account/Special Account (if under 55).

Special Account (SA) Closure at Age 55

A major change for 2026 is the full implementation of the SA closure for seniors.

Where does the money go? When you turn 55, your SA is closed. SA savings are transferred to your RA up to your FRS. Any remaining balance goes to your OA.
Why this matters: You can no longer "shield" your SA to earn 4%. If you want the higher 4% interest rate, you should transfer your OA funds into your RA up to the new ERS limit of S$661,200.

» MORE: CPF investment scheme: What it is, how it works

CPF LIFE: Payouts for Life

CPF LIFE is a longevity insurance scheme that provides you with monthly payouts for as long as you live.

When do payouts start? You can choose to start receiving payouts anytime between ages 65 and 70.
Payout Plans: You can choose between the Standard Plan (higher payouts, lower bequest), Escalating Plan (payouts increase by 2% each year), or Basic Plan (lower payouts, higher bequest).

Strategies to maximise your CPF

Top up your accounts: You can perform cash top-ups to your RA or MA and enjoy tax relief of up to S$16,000 per year (S $8,000 for yourself and S$ 8,000 for loved ones).
Transfer OA to RA: If you have no intention of using your OA for housing, transfer it to your RA to earn a higher interest rate (4.0% vs 2.5%).
Invest via CPFIS: If you are confident in your investment skills, you can invest OA funds (above S $20,000) and SA funds (above S$ 40,000) in approved stocks, bonds, or gold.

What happens to CPF when you leave Singapore?

If you renounce your Singapore citizenship or Permanent Residency, you can withdraw your entire CPF savings.

Otherwise, your funds remain locked until your statutory retirement age. Exceptions exist for foreigners and those permanently leaving Singapore, but withdrawals must meet specific conditions.

» MORE: CPF nominations: What happens to your CPF money after you die?

In conclusion

CPF is not just a savings scheme — it is a long-term financial partner that supports you through home ownership, medical expenses, and retirement. By understanding how each account works and how to leverage CPF through strategies like voluntary top-ups, you can turn it into a powerful wealth-building tool.

As with any major financial decision, it pays to plan ahead. Consider topping up your SA or RA today — your future self will thank you when compound interest kicks in.

Methodology

Frequently asked questions about how CPF works

What is the main purpose of CPF in Singapore?

CPF is a mandatory savings scheme aimed at helping Singaporeans and Permanent Residents meet key financial needs — housing, healthcare, and retirement. It ensures individuals build up savings progressively throughout their working life.

How many CPF accounts are there and what are they for?

There are four CPF accounts. Ordinary Account (OA) is used mainly for housing, insurance, and investments. Special Account (SA) is reserved for retirement savings and earns higher interest. MediSave Account (MA) covers healthcare expenses. Retirement Account (RA) is created at age 55 to provide retirement payouts through CPF LIFE.

Can I invest my CPF savings?

Yes, you can invest your OA and SA savings through the CPF Investment Scheme (CPFIS), depending on your account balances and risk appetite. Options include unit trusts, ETFs, fixed deposits and bonds, though restrictions apply to protect retirement adequacy.

What happens to my CPF savings if I leave Singapore permanently?

Singaporeans and PRs who renounce their status can withdraw their CPF savings fully. Otherwise, CPF funds generally remain locked until the statutory retirement age, unless special conditions for withdrawal are met.

How can I maximise my CPF savings?

You can maximise CPF savings by making voluntary top-ups (which also offer tax relief), avoiding unnecessary withdrawals, and allowing funds in SA and RA to compound at higher interest rates over time. Combining CPF with other investments can also provide a balanced approach to growing your wealth.

Relevant articles

CPF Investment Scheme (Original Account): What It Is, How It Works

Thinking about using your CPF Ordinary Account (OA) funds to invest? It’s a common consideration among Singaporeans looking to grow their retirement savings beyond the default 2.5% per annum (p.a.) interest rate. But before you jump in, it's important to weigh the risks and benefits to make an informed decision.