Thursday, May 21, 2009

Investing your CPF Monies

I'll like to share some common questions and answers that you may like to know about investing your CPF. Our Govt allows us to use this CPF Investment Scheme (CPFIS) to invest our CPF savings in a wide range of investment products to enhance our retirement nest egg and please take 2.5 minutes to read the 5 points that I'd summarised for you...

1) What Criteria must I fulfil before I can invest my CPF
a) Your CPFOA must have more than $20,000 if you want to invest your Ordinary Account
b) Your CPFSA must have more than $30,000 if you want to invest your Special Account
c) At least 18 years old
d) Not a undischarged bankrupt

2) How can I start my CPF investment?
a) You need to open a CPF Investment Account with DBS, OCBC or UOB to invest your OA. (Compulsory)
b) You do not need to open any investment account to invest your SA

3) What can I invest for my CPF Monies? (Note the 3 groups with different %)
* 100% of investible OA and SA can be invested in:
a) Fixed Deposits
b) Singapore Government Bonds
c) Singapore Government Treasury Bills
d) Bonds Guaranteed by Singapore Government
e) Annuities
f) Endowment Insurance Policies
g) Selected Investment-linked Insurance Products
h) Selected Unit Trusts
i) Selected Exchange Traded Funds (ETFs)

* Up to 35% of investible OA can be invested in:
a) Shares
b) Property Funds (or real estate investment trusts)
c) Corporate Bonds

* Up to 10% of investible OA can be invested in:
a) Gold
b) Gold ETFs
c) Other Gold products (only UOB offers these new gold products)

4) Do I pay tax for my investment returns?
Your investment profits and interest earned from investments are not taxable. However, dividends received are taxable at your individual tax rate

5) How about my discounted Singtel Shares? How much do I have and what will happen when I sell?
* The Special Discounted Share (SDS) Scheme is part of the Government’s asset enhancement programme to make Singapore a share-owning society, thus giving Singaporeans a greater stake in the country.
* Click here to find out how much Singtel Shares you have.
* You can sell your discounted ST shares through any Singapore Post office or if you have a trading account with a broking firm, you may sell your discounted ST shares through your stockbroker.
* When you sell the discounted ST shares, the sale proceeds will be refunded to your CPF Ordinary Account.


Anonymous said...

Good that $50K (20K OA, 30K SA) are been locked away from the unscrupulous insurance agents...If this money falls into the hands of these greedy, sob agents, either they don't make money in conservative endowment or they lose them in risky investment. With the $50K ,CPF can give good return that is risk free, without the bullshits and the long lock in products sold by insurance agents.
I hope in the near future, no insurance agents should be allowed to manage CPF money.

Anonymous said...

In other news totally unrelated to unscrupulous human beings, a SWF lost 80% on one of its investments and the country's citizens are expected to work till the day they die.

Anonymous said...

hey, adrain, I asked for your opinion whether I should buy the single premium growth from ntuc using my CPF Special Account and you have not answered me. Tell me why I should and why I should not.
Thanks you in advance.


Khiat Han Hwee Adrian said...

Hi Vincent,

Your earlier comment:

"i am 54 and my insurance salesman from ntuc has been pushing me to use my special account to buy growth policy. It is okay or not, Adrain.
She said got insurance double protection and CPF no insurance. The return better than Cpf also. true or not. Please advice."


Growth Plan over 10 years gives around 4% non-guaranteed. CPFSA is able to give around this figure and is guaranteed. There are other implications especially if you are already 54 years old. I"ll not advise it.

Khiat Han Hwee Adrian said...

btw, Growth plan for CPFSA is not allowed for someone at the age of 54. The minimum term is 10 years and maximum maturity is 62 yrs old.

I'd never recommended a CPFSA Growth in my career as I'd advice people against it. If the person is not satisfied with the guaranteed returns and have the appetite and time horizon for higher returns, they may consider investing them.

Its a good move by our govt to lock in $30k CPFSA before one can invest it.

Anonymous said...

Thank you , Adrain for the clarification and advice . I also thought it was not right.I would have fallen into the trap..this is not ethical
We have to be wary.
Thanks and all the best


Anonymous said...

You know, Adrain, this ntuc agent called me again and her argument is that Growth gives free double protection insurance whereas CPF gives nothing.I told her I don't need insurance and I prefer the risk free return. Her another argument is that CPF may not give 4% .I told her CPF minimum return is 3.5% risk free and no need to lock in for 10 years and it may also go up more than 4%. Ntuc growth 4% is not guaranteed.
Anyway, she was not happy that I don't want to buy, insisting about insurance growth gives.

Thank you , Adrain, without people like you we consumers very often get conned by dishonest insurance agents. I trusted ntuc agents but now I would think twice.Consult you first .
God bless you


Anonymous said...

I bought Growth Policy from a NTUC agent few years back with my Special Account. I realise how stupid I have been conned by the agent. I am thinking of taking action against the agents for misleading and misrepresenting the product. If i quit now I will lose but Iam thinking of justice.

Anonymous said...

Thank you , Adrain, without people like you we consumers very often get conned by dishonest insurance agents. I trusted ntuc agents but now I would think twice.Consult you first .
God bless you
To Vincent,

Don't just thank Adrian for giving good advice to you. Have you paid Adrian a fee for the good advice? Have you realised that he earns nothing from this advice? Don't just thank verbally, follow-up with an action. There is no need to buy anything from him.

An adviser

Khiat Han Hwee Adrian said...

Don't need to thank me. I'm not asking anything back in return. If I'm able to help, I'll help. If its not within my capacity, I'll have to say sorry.

Anonymous said...


You are a good man but unless you charge your clients a fee for using your advice, you are not going to be in the industry for long. If you are not going to stay in the industry for long, how can you put your clients' interest first?

There are many free-riders in the industry - such as the one who buys a "free" term from another company and another one who thanked you for telling him not to buy the Growth plan..

Anonymous said...

Hi Adrian,

Can I know what ETFs can we buy with OA and SA money ?

Thank you in advance.