5 CPF Tips And Tricks That You MUST Know

In this video, I’ll share with 6 CPF tips and tricks that you can do right now, so that you can squeeze out every possible benefit from your CPF. Enjoy!

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0:00 - Intro

0:35 - Top up cash to Special Account
It may seem counterintuitive, but topping up cash to your SA has a few benefits. First, CPF SA gives 4% interest. It is almost impossible to find any risk free investment that gives such a high interest. Second, you get to save on taxes up to $7000 of your taxable income every year.

But, even though the benefits are good, there are some downsides. First, this top up is only one way, you can’t withdraw those money until you retire. Second, even though the 4% sounds good, but if you know how to invest your money, 4% is super easy to get. Third, even though CPF hasn’t change the interest rate yet, there’s still a chance they will reduce SA interest rate in the future.

If you need a tutorial, check this out:
rstu-top-up-cpf-special-account-sa-using-cash/

3:02 - Transfer from Ordinary to Special Account
Your OA gives 2.5% interest, by transferring over to SA, you will earn 4% interest instead. But the downside is, this transfer is only one way. Another downside, OA money can be used to buy house and used for education, but SA is not able to do so.

If you need a tutorial, check this out:
transferring-ordinary-account-special-account/

4:42 - CPF Nomination
When you pass away, your CPF will be passed on to someone else. If you didn’t make any CPF nomination, your CPF will be distributed via intestacy laws, aka priority will be given to certain people under certain conditions.
articles/2018/10/intestacy-what-if-you-dont-have-an-estate-plan?sc_lang=en

When that happens, the public trustee will charge you a fee to settle this. So it’s very important that you make a CPF nomination to avoid extra costs.
deceased-cpf-estate-monies/information-for-next-of-kin-cpf-monies/

CPF nomination can be done online, check out this tutorial: watch?v=4S-WoAS6LaA&ab_channel=CPFBoard

6:16 - Use your Ordinary Account for house downpayment
Many articles recommend you to avoid wiping out your OA for house downpayment. But I personally wouldn’t follow this advice. I would prefer to wipe out the OA for house downpayment. That’s because with your cash, you can invest in better stuff. And if you have 6 months emergency funds, having that extra OA is not required.

With that being said, everyone’s situation is different. So get a professional opinion before deciding this.

8:35 - Invest your CPF money
If you have extra CPF money that you do not need for anything, you can consider investing it to get a much better return. But there’s a few things to take note. CPF has some very specific stuff where you can invest in. You need to have a balance of $20k in OA and $40k in SA before you can invest.

It was found that 50% of people who invest their CPF money either lost money or performed worse off than just keeping it in CPF.
Assets/common/Documents/FY2020_CPFIS_OA_PL_Report.pdf

If you want a safer way of investing your CPF OA, you can consider using Endowus to help you invest.