Understanding CPF and Their Benefits


The Central Provident Fund (CPF) is a comprehensive savings and social security system in Singapore designed to help citizens and permanent residents build a secure financial future. CPF offers various plans and accounts, each with its own benefits and purposes. In this guide, we will explore the different CPF plans and the advantages they provide to Singaporeans.

1. The Three CPF Accounts

1.1 Ordinary Account (OA):

  • The OA is primarily used for housing-related expenses, such as purchasing a home, paying the mortgage, and home improvements.
  • It also offers a competitive interest rate, currently set at 2.5% per annum.

1.2 Special Account (SA):

  • The SA is geared toward long-term financial security, including retirement, healthcare, and investments.
  • It offers a higher interest rate, currently set at 4.0% per annum, to help grow savings over time.

1.3 Medisave Account (MA):

  • The MA is dedicated to healthcare-related expenses, such as hospitalization, surgery, and medical insurance premiums.
  • It ensures that Singaporeans have sufficient funds for their healthcare needs.

2. CPF Benefits for Housing

2.1 Home Ownership:

  • The CPF OA can be used to finance the purchase of a home, including HDB flats or private properties.
  • It can also be used for mortgage payments, reducing the financial burden of homebuyers.

2.2 Housing Grants:

  • CPF members may be eligible for various housing grants, such as the CPF Housing Grant and Additional CPF Housing Grant, to assist with home purchases.

2.3 Home Improvement:

  • Funds from the OA can be used for home improvement, renovation, or upgrading of your property.

3. CPF Benefits for Retirement

3.1 Retirement Sum:

  • CPF members are required to set aside a Retirement Sum in their RA (Retirement Account), which serves as their retirement income.
  • The Retirement Sum is designed to provide monthly payouts to support retirement expenses.


  • CPF members can choose to join CPF LIFE, a life annuity scheme that provides a steady stream of income for life, starting as early as age 65.

4. CPF Benefits for Healthcare

4.1 Medisave Usage:

  • Medisave funds can be used for hospitalization expenses, outpatient treatments, medical insurance premiums, and approved medical procedures.

4.2 MediShield Life:

  • CPF members are automatically enrolled in MediShield Life, a national health insurance scheme that provides comprehensive coverage for large medical bills.

5. Investment Opportunities

5.1 Investment Schemes:

  • CPF members can invest their OA and SA funds in approved investment schemes, potentially earning higher returns on their savings.

5.2 Supplementary Retirement Scheme (SRS):

  • CPF members can contribute to the SRS to enjoy tax benefits and further enhance their retirement savings.

6. Flexibility and Security

6.1 Liquidity and Flexibility:

  • CPF accounts offer flexibility, allowing members to withdraw funds for specific purposes, such as education, insurance, or investments.

6.2 Financial Security:

  • CPF provides a safety net for Singaporeans, ensuring that they have savings for housing, healthcare, and retirement.


CPF plans play a crucial role in the financial well-being of Singaporeans by offering benefits for housing, retirement, healthcare, and investment opportunities. Understanding how CPF accounts work and their advantages is essential for maximizing the benefits of this comprehensive savings and social security system. With careful financial planning and prudent use of CPF funds, Singaporeans can build a secure financial future and enjoy peace of mind.

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