CPF and SRS: Your alternative savings pots

CPF and SRS: Your alternative savings pots

If you’ve only got a minute:

You can leverage CPF and SRS as alternative savings pots. Here’s how:

  • Understand how CPF works. Your contributions are split into 3 accounts: Ordinary Account (OA), Special Account (SA), and MediSave Account (MA), with the fourth, the Retirement Account (RA), automatically created on your 55th birthday.
  • Top up your CPF accounts to earn higher interest and potentially save up to S$16,000 in taxes a year.
  • Consider the opportunity cost of using CPF OA savings for your mortgage.
  • You may also use the voluntary Supplementary Retirement Scheme (SRS) to complement your CPF. SRS contributions are eligible for tax relief and can be invested for potentially higher returns.

Most of us contribute to our Central Provident Fund (CPF) accounts on a monthly basis, but how do we leverage CPF as an alternative savings pot?

The CPF is a comprehensive social security system for working Singaporeans and Permanent Residents to set aside funds for retirement, housing and healthcare. When your salary comes in every month, 20% of it will go to CPF, while your employer contributes an additional 17%. For those who are 55 and above, the CPF contribution rates are lower.

You and your employer contribute towards your CPF. What’s next?

This contribution will be further truncated into your Ordinary Account (OA), Special Account (SA) and MediSave Account (MA). Here are the allocation rates:

Employee’s age


Allocation Rates from 1 Jan 2022

(for monthly wages > $750)


Ordinary Account

(% of wage)

Special Account

(% of wage)

MediSave Account

(% of wage)

35 and below




Above 35 to 40




Above 45 to 50




Above 50 to 55




Above 55 to 60




Above 60 to 65




Above 65




The Ordinary Wage Ceiling is a CPF contribution cap on your monthly salary and is capped at S$6,000. This means that the first S$6,000 of your monthly salary is subjected to CPF contributions. Any amount above that won’t have a portion deducted for CPF.

Understanding how each account works

Ordinary Account


Special Account


MediSave Account


Retirement Account



For housing insurance, investment and education

For old age and investment in retirement-related financial products

For hospitalisation expenses and approved medical insurance

On your 55th birthday, a forth account, the Retirement Account (RA), is automatically created

Can be used for

Insurance premiums such as Dependants’ Protection Scheme (DPS) and Home Protection Scheme (HPS)

Insurance premiums such as Dependants’ Protection Scheme (DPS)

Insurance premiums such as ElderShield

CPF Life

Interest rate  

2.5% p.a.

4% p.a.

4% p.a.

4% p.a.

Additional 1% p.a. interest on the first S$60,000 of combined CPF balances, with the first S$20,000 from the OA

 CPF members aged 55 and above:   

Method 1: Make cash top-ups to your SA or that of your loved ones’

You get to enjoy up to S$8,000 per year of tax relief when you do a cash top-up to your SA or RA (if you are aged 55 and above). You enjoy additional tax savings of up to S$8,000 when you use cash to top up your loved ones’ SA or RA as well! That’s up to S$16,000 of tax savings which can lower your chargeable income and result in potential tax savings! CPF top-ups are subject to conditions.

Bear in mind that the SA and RA attract interest of up to 5% and 6% p.a. risk free. Can your cash in your bank account grow as much?

Method 2: Transfer your OA savings or do cash top-ups to your SA or RA to earn higher interest

For those aged 54 and below, you can do a CPF transfer or cash top-ups to your SA up to the prevailing Full Retirement Sum. For those aged 55 and above, the amount can be up to the prevailing Enhanced Retirement Sum in the RA.

If you have used CPFOA funds to service your home loans, you can consider a cash repayment to reduce accrued interest.

If you are deciding between cash or CPFOA savings to pay your downpayment and monthly loan instalments, you can consider setting aside some cash to make those payments instead of fully using your CPFOA savings.

Do remember to consider the opportunity cost. The OA is currently generating 2.5% interest p.a. If you transfer your OA amount to SA, it will earn a higher interest of 4% p.a. Will you be able to find alternative products in the market with a similar interest rate?

Thinking of selling your property?

If you have utilised your OA savings for down payment or mortgage payments, you are required to refund that principal and accumulated accrued interest back to your OA after selling the property. Consider using cash for partial capital repayment of your home loan.

Just received your bonus and want to use it to reduce your home loan? If you make a partial cash repayment for your home loan in advance and write into CPF, you will not need to pay accrued interest for the amount you repay! The minimum amount for partial capital repayment is:

  • $500, if your loan commencement date was before 1 April 2012,
  • $5,000, with increments in multiples of $1,000, if your loan commencement date was on or after 1 April 2012.

Source: https://www.hdb.gov.sg/cs/infoweb/residential/servicing-your-hdb-loan/mortgage-loan/payment

Use Supplementary Retirement Scheme (SRS) as alternative savings

Besides using CPF to save, consider the SRS. It is a voluntary scheme that encourages Singaporeans, PRs and foreigners to save for retirement by supplementing their CPF savings while enjoying tax relief.

The maximum yearly SRS contribution for Singaporeans and PRs is S$15,300. For foreigners, it is S$35,700.

Key Benefits of SRS:

  • Potentially lower your taxable income
  • Investment returns are tax free before withdrawal
  • Only 50% of the withdrawals from SRS are taxable at retirement
  • Use your SRS to buy selected financial products
  • Take advantage of the long time horizon to grow your retirement savings

Do bear in mind that there is an overall personal income tax cap of S$80,000.

Now that you have read the tips and tricks to leverage your CPF and SRS, it’s time to get started!

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Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.

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