The CPF Special Account (SA) offers a high interest rate of 4 – 5 % p.a. to save for your retirement needs. However, you may be wondering if you can transfer your SA funds out for other purposes.
This article will help you understand under what conditions you can transfer out your SA funds, and whether you can transfer them out to your other CPF accounts.
Contents
Can I transfer my funds out of my CPF Special Account (SA)?
You can transfer funds out of your CPF Special Account (SA) only for specific investments under the CPF Investment Scheme (CPFIS).
The rationale for your SA savings is to save up for your retirement. To this end, the CPF Board has made it difficult to withdraw these savings in the first place.
Your SA savings will form the backbone of your Retirement Account when you turn 55.
However, the only exception where you can withdraw these funds is under the CPFIS, where you can potentially enhance your SA returns through investments. To make this move worthwhile, you need to find investment products that can offer returns higher than the SA’s interest rate.
Given the limited variety of investments and the SA’s competitive interest rate, it can be challenging to find a product that can match the SA in returns.
How can I invest using my CPF Special Account (SA)?
After setting aside $40,000 in your CPF Special Account (SA), you can invest the remainder of your SA funds. Compared with investing in your Ordinary Account (OA), products which are approved for CPF SA investments tend to fall into lower-risk categories.
By only allowing investments in lower-risk products for your SA, the chance of having inadequate savings for your retirement is reduced.
Here is a list of investment products that you can invest in using your SA funds:
- Unit Trusts and ILPs (Higher risk products not included)
- Annuities
- Endowment Policies
- Singapore Government Bonds
- Treasury Bills
Unlike saving in your SA, you will also need to consider the impact of fees when you invest in certain products.
Excessive fees may eat into your returns, making the investment less worthwhile to make!
Here is a quick breakdown of the fees you can expect to pay for the various products available:
| Investment Product | Estimated fees (% p.a.) |
|---|---|
| Lower-risk Unit Trusts | 0.41 % – 1.5 % |
| Treasury Bills, SSBs | 0 % |
In addition, some products (such as endowment plans and annuities) are labelled as ‘Savings Plans’. These also come with fees that are payable to the advisor and company managing your funds!
When investing your CPF SA funds, the most important goal is to beat the guaranteed interest of your SA. Therefore, if the projected net return of your investment after accounting for fees is less than 4 % p.a., you may want to consider leaving your funds in your SA instead.
Beating the SA’s interest rate may be difficult, but it is not impossible. You can check out my guide on how you can attempt to do so.
Can I transfer funds from my CPF SA to OA?
Unfortunately, you cannot transfer funds from your CPF Special Account (SA) to your Ordinary Account (OA).
Your CPF OA and SA funds enjoy different interest rates for a reason: Their difference in liquidity. While you can withdraw your OA funds under certain circumstances such as repaying housing and study loans, you cannot do so with your SA funds.
With its long investment horizon, your SA funds are able to command a higher interest rate.
Therefore, your SA funds cannot be transferred out easily before you reach 55, and you can only do so afterwards if you have saved up the Full Retirement Sum (FRS) in your combined OA and SA savings.
Considering to transfer from your OA to your SA instead? Here are some pointers on how to do so.
Can I transfer funds from my CPF SA to MA?
Similarly, you cannot transfer funds from your CPF Special Account (SA) to your Medisave Account (MA).
Although your SA and MA both enjoy similar interest rates, you need these savings for very different purposes. Your SA savings are meant for your retirement, while your MA savings cover any unforeseen medical expenses throughout your lifetime.
It can take many years to save up the substantial amount needed for your retirement and large medical bills.
To ensure that you have enough funds for these important purposes, you cannot transfer from your SA to your MA, and vice versa.
Conclusion
Your CPF Special Account (SA) is the perfect place for you to save up for your retirement. So perfect, that any funds deposited inside become almost impossible to withdraw!
You can only withdraw your SA funds after you turn 55, after setting aside your Full Retirement Sum in your Retirement Account.
Before performing any top-ups to your SA, you may want to note that this process is irreversible. Furthermore, you may want to keep in mind that you cannot transfer funds from your SA to your other CPF accounts.
Therefore, I hope that this article gives you a clearer idea of the limitations of transferring your SA funds. Do check out this page for more guides on other topics about your CPF!
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