26 Jun 2024

SOURCE: CPF Board

Your CPF savings in your Ordinary Account (OA) grow steadily at a guaranteed interest rate of 2.5% annually. In comparison, those in your Special Account (SA) provide a higher return of up to 5%* per annum.

The OA and SA serve different purposes. While the OA generally supports your retirement, housing, insurance and investment needs, your SA is mainly meant for your retirement. For those under age 55 who do not anticipate any further uses of their OA savings, moving a portion of it to your SA can be an effective way to boost your retirement plans and secure higher monthly payouts for yourself in the future.

*Based on the current 4% interest rate floor on Special, MediSave and Retirement Account monies. For members below 55 years old, they will earn an extra 1% interest on the first $60,000 of their combined CPF balances (capped at $20,000 for OA). The interest rate for Special, MediSave and Retirement Account is reviewed quarterly.

What does it mean to transfer your CPF funds from your OA to SA

Before you apply to transfer your CPF savings from your OA to SA, here's a quick review of how you can use these CPF accounts:

Ordinary Account

The CPF OA provides an interest rate of 2.5% annually and can be used for the purchase of property, certain types of insurance, investment (through the CPF Investment Scheme), and education.

When you are younger, a larger portion of your CPF contributions is allocated to your OA to support your home purchase. As you grow older, a greater proportion of your CPF contributions is allocated to your SA and MediSave Account (MA) to meet the increasing retirement and healthcare needs, respectively.

Special Account

The CPF SA offers a higher interest rate of up to 5%* per annum and helps you with saving for your retirement. When you turn age 55, the savings from your SA, followed by OA, up to your Full Retirement Sum, will be transferred to a newly opened Retirement Account (RA).

Before you turn age 55, the amount you can transfer from your OA to SA is capped at the prevailing Full Retirement Sum (FRS). The FRS serves as a point of reference for how much you might need for your retirement needs. The CPF savings in your RA will ultimately determine your future monthly payouts, which start from age 65.

By having more savings in your SA early on, your money can work hard for you behind the scenes with the power of compound interest and grow steadily over the years to increase your monthly payouts during your golden years!

5 things to note when transferring your OA to SA

1. Increased interest rate

The higher interest rate in your SA allows your CPF savings to grow more over the same period of time as compared to in your OA.

2. Higher retirement payouts in the future  

Taking advantage of the increased interest rate in the SA allows your retirement savings to grow at a faster rate.

This eventually leads to higher retirement payouts when you decide to start CPF LIFE.

3. Less flexibility to use CPF savings for your housing needs

By transferring to your SA, your OA will have less funds available for housing needs such as purchasing a new home or maintaining a mortgage.

If you plan to buy a new home or increase your mortgage repayment, you may need to use cash if your OA savings are inadequate.

Hence, it is important to carefully evaluate your housing plans and options before transferring funds from your OA to SA.

4. Potentially less tax relief if you perform cash top-ups to the FRS

Making a cash top-up to your SA allows you to enjoy tax relief of up to $16,000 for you and your loved ones. However, tax relief is only applicable for top-ups up to the prevailing FRS.

Depending on the amount of savings in your SA, if you transfer a portion of your OA savings to your SA up to the FRS, you might not be able to enjoy tax relief from making further cash top-ups to your SA.

5. A CPF transfer is an irreversible process

Transferring your CPF savings from your OA to SA is an irreversible process. Before making a CPF transfer, take the time to consider your options and weigh the various pros and cons.

How to transfer CPF funds from OA to SA

1) Log in to your Singpass and select CPF transfer

Visit the cash top-ups and CPF transfers for retirement page to get started. Log in to your CPF account using your Singpass. Next, click on CPF transfer.

2) Select the amount you want to transfer

Key in the amount of CPF savings you would like to transfer from your OA to SA.

Be sure to also learn more about the maximum amount that you can transfer from your OA to SA.

3) Review and check your CPF transfer details

Check your CPF transfer details and click on “confirm”. Note that transferring your CPF savings from your OA to the SA or RA is immediate and irreversible.

Alternatively, you can try out the CPF planner-retirement income and simulate how a CPF transfer will affect your retirement payouts. You can also make a CPF transfer transaction after you finish using the planner.

Transfer savings from your OA to SA in three simple steps

Transferring your CPF savings from your OA to SA helps your savings to grow faster with the higher SA interest rate. This allows you to enjoy higher monthly payouts in retirement.

As the process is irreversible, transfer an appropriate amount after considering the other needs you require your OA savings for.

If you like this article, be sure to check out our 3-simple steps to making a CPF nomination!

Information in this article is accurate as at the date of publication.