CPF 7 min read
What every Singaporean teen should know about CPF
CPF isn't just a deduction on your future payslip, it's the backbone of your retirement, home, and healthcare in Singapore.
What is CPF?
The Central Provident Fund (CPF) is a mandatory savings scheme. Every month you work, a portion of your pay goes into your CPF, partly from you, partly from your employer. It's not a tax: it's your money, held by the government to fund your retirement, housing, and healthcare.
The three accounts
Your CPF is split into three "pockets":
- Ordinary Account (OA): Used mainly for housing, and some education and investments. Earns interest (currently 2.5%).
- Special Account (SA): For retirement. Earns higher interest (currently 4%), so it grows faster.
- Medisave Account (MA): For hospital bills and approved medical care. Earns 4% interest.
Where the money goes
- Housing: Most Singaporeans use their OA to pay for an HDB flat.
- Retirement: At 55, your savings move into a Retirement Account (RA), and from 65 you get monthly payouts.
- Healthcare: Medisave helps pay hospital bills and certain screenings.
Why it matters now
You might be years from your first job, but:
- It's a big chunk of pay: 20% from you + 17% from your employer = 37% of your salary flowing into CPF.
- Compound interest is powerful: The earlier money goes in, the longer it grows, and CPF rates beat most banks.
- It shapes your housing options: Your OA can fund your first home.
Common myths
- "It's a tax." → No, it's your money you'll get back.
- "I'll lose it." → It's guaranteed by the government and paid out in retirement.
- "I can't touch it." → You can use it for housing, investments (under CPFIS), and medical needs.
The takeaway
Understand CPF early. It's one of the biggest financial tools you'll have in Singapore.
Interactives
Hover any term to see its definition:
Central Provident Fund (CPF)Ordinary Account (OA)Special Account (SA)Medisave Account (MA)compound interest
Central Provident Fund (CPF): A mandatory savings scheme in Singapore that funds retirement, housing, and healthcare.
Ordinary Account (OA): The part of CPF used mainly for housing, earning around 2.5% interest.
Special Account (SA): The part of CPF meant for retirement, earning a higher interest of around 4%.
Medisave Account (MA): The part of CPF used for hospital bills and approved medical expenses.
compound interest: Interest earned on your original money plus the interest already added, making savings grow faster over time.