CPF Medisave
Singapore Healthcare Savings Account — Singapore investing guide with key metrics, examples and 2026 data.
CPF MediSave is a dedicated healthcare savings account under Singapore’s Central Provident Fund, earning 4% per annum. It can be used for hospitalisation expenses, approved outpatient treatments, MediShield Life premiums, and Integrated Shield Plan basic premiums.
Not financial advice. All figures are for educational reference only. Data as at Q1 2026 unless noted.
Table of Contents
What Is CPF Medisave?
CPF MediSave is the third of the three core CPF accounts, alongside the Ordinary Account (OA) and Special Account (SA). Unlike the OA, MediSave funds cannot be used for housing or investments — they are ring-fenced exclusively for healthcare and approved insurance premiums. This restriction ensures Singaporeans always have a healthcare buffer as they age.
MediSave earns 4% per annum, the same rate as the Special Account, making it a high-quality compounding vehicle despite its restricted use. For employed Singaporeans, MediSave contributions are mandatory as part of the overall CPF contribution rate. Self-employed persons must also contribute to MediSave based on their net trade income.
There is a cap on MediSave balances called the Basic Healthcare Sum (BHS). As at 2026, the BHS is S$75,500. Any contributions above the BHS are automatically redirected to the Special Account (if below age 55) or Retirement Account (if 55 and above) — making excess MediSave contributions a backdoor top-up strategy for maximising SA/RA balances.
How It Works
MediSave can be used for: hospitalisation in public hospitals (Class B2/C wards up to S$550/day for Class C); MediShield Life premiums; basic component of Integrated Shield Plan (IP) premiums; approved outpatient treatments including dialysis, chemotherapy, mental health consultations, and selected vaccinations; and selected day surgery and specialist outpatient procedures.
MediSave cannot be used for standard GP visits, dental treatments, or over-the-counter medications — a common misconception.
Contribution rates are tiered by age. For employees aged 35 and below, the MediSave allocation is 8% of total CPF contributions. Example: A 35-year-old earning S$5,000/month contributes approximately S$400/month to MediSave. With a balance of S$40,000 earning 4% p.a., the account earns S$1,600/year in interest — compounding efficiently toward healthcare security in retirement.
CPF Medisave in Singapore
Singapore’s MediSave system is a world-recognised model for sustainable healthcare financing. The 4% interest rate significantly exceeds the CPF OA rate of 2.5%, reflecting the long lock-up nature of these funds. The interplay between MediSave and MediShield Life is central to Singapore’s healthcare financing architecture.
MediShield Life is the mandatory catastrophic health insurance scheme — premiums are automatically deducted from MediSave. For better coverage, most Singaporeans upgrade to Integrated Shield Plans (ISPs) from private insurers. The basic ISP premium can be paid from MediSave; however, rider premiums must be paid in cash following MAS/CPF Board policy changes in 2019.
As at 2026, CPF Board allows MediSave to be used for CPF LIFE premiums and for an expanded list of mental health outpatient treatments added in 2024. Staying updated on approved MediSave uses is important for healthcare financial planning.
Real-World Examples
Consider Sarah, a 45-year-old professional earning S$8,000/month. Her monthly MediSave contribution is approximately S$640 (8% of S$8,000). With a current balance of S$55,000 earning 4% p.a., her account grows by approximately S$2,200/year in interest plus S$7,680 in annual contributions — on track to reach the S$75,500 BHS in her early 50s.
Once she hits the BHS, excess MediSave contributions automatically flow to her SA at 4% p.a. — a powerful passive retirement savings boost requiring zero additional action. For a hospitalisation example: a Class B1 ward stay at a public hospital for 3 days costs approximately S$2,500 after subsidies as at Q4 2025. MediSave combined with MediShield Life covers most of this bill.
Why It Matters for Investors
For Singapore investors, MediSave is not just a healthcare buffer — it is indirectly a retirement planning tool. Every dollar in MediSave earning 4% p.a. tax-free is money that does not need to come from your investment portfolio for healthcare costs, allowing investment assets to compound uninterrupted.
The BHS top-up strategy is particularly useful: voluntary MediSave top-ups (up to the BHS) earn 4% p.a. and qualify for income tax relief of up to S$8,000 per year in total CPF top-ups — one of the most efficient, risk-free tax relief strategies available to Singapore taxpayers.
Entering retirement with MediSave near the BHS means a ready healthcare fund covering MediShield Life premiums throughout old age. Use our CPF LIFE payout calculator and Retirement Calculator to see how MediSave fits into your overall plan. Also see our CPF Investment Strategy guide.
Frequently Asked Questions
What is the CPF MediSave interest rate?
MediSave earns 4% per annum, the same as the CPF Special Account. An additional 1% p.a. is paid on the first S$60,000 of combined CPF balances, giving lower-balance accounts an effective rate of up to 5% on the applicable portion.
What is the MediSave Basic Healthcare Sum (BHS) in 2026?
The BHS for 2026 is S$75,500. This is the maximum MediSave balance — contributions above this are automatically redirected to your Special Account or Retirement Account. The BHS is adjusted annually in line with long-term healthcare cost inflation.
Can I use MediSave for GP or dental visits?
Generally, no. MediSave cannot be used for standard GP visits, dental treatments, or over-the-counter medications. It is limited to hospitalisation, approved outpatient procedures (e.g. dialysis, chemotherapy, mental health consults), MediShield Life premiums, and the basic component of Integrated Shield Plan premiums.
What happens to MediSave above the Basic Healthcare Sum?
If your MediSave balance reaches the BHS, subsequent MediSave contributions are automatically channelled to your CPF Special Account (if below 55) or Retirement Account (if 55 and above), where they continue earning 4% p.a. toward retirement.
Is a voluntary MediSave top-up tax deductible?
Yes. Voluntary cash top-ups to your own MediSave account qualify for income tax relief, subject to the overall CPF cash top-up relief cap of S$8,000 per calendar year (combined across all CPF accounts). This makes MediSave top-ups one of the most tax-efficient savings strategies in Singapore.
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