CPF Investment Scheme Returns
Category: CPF | The Kopi Notes Singapore Investing Glossary | Updated Q1 2026
CPF Investment Scheme (CPFIS) returns are the investment gains or losses generated when CPF members use their Ordinary Account (OA) or Special Account (SA) savings to invest in approved instruments. Returns must beat the guaranteed 2.5% OA floor rate to justify the additional risk of investing over leaving savings in CPF accounts.
For informational purposes only. Not financial advice.
What Is the CPF Investment Scheme (CPFIS)?
CPFIS allows CPF members to use a portion of their OA (above S$20,000) and SA (above S$40,000) savings to invest in approved instruments including unit trusts, ETFs, SGX-listed shares, and SGS bonds. OA earns 2.5% p.a. and SA earns 4% p.a. as guaranteed CPF rates. CPFIS is optional – members choose whether to participate.
CPFIS-OA vs CPFIS-SA Investments
CPFIS-OA allows: unit trusts, ETFs, SGX shares, SGS bonds, T-bills, gold products (up to 10%), and ILPs. CPFIS-SA has a more restricted list – only lower-risk unit trusts and ILPs meeting CPF Board criteria. Given SA earns a guaranteed 4% p.a., the bar for CPFIS-SA to outperform is very high. Most financial advisers recommend against CPFIS-SA for most members.
Historical Performance vs CPF Rates
MAS data showed that a significant proportion of CPFIS-OA investors historically underperformed the 2.5% OA rate after fees, particularly those using high-fee unit trusts (TER 1.5-2% p.a.). CPF Board reformed CPFIS in 2018-2019, trimming the approved list to lower-fee funds. Since then, global equity index funds in CPFIS-OA have generally outperformed 2.5% over 10-year horizons, though market conditions vary.
Is CPFIS Worth It in 2026?
Arguments for: global equity ETFs in CPFIS-OA have historically beaten 2.5% over long horizons; lower fees post-reform; gains are tax-free within CPF. Arguments against: market risk on retirement savings; hard to beat SA guaranteed 4% for CPFIS-SA; investable threshold applies; transaction costs for smaller amounts. Consensus: CPFIS-OA may be suitable for long-horizon investors (10+ years) using low-cost index ETFs. See CPF Investment Scheme (CPFIS) overview.
CPFIS-Eligible ETFs
As at 2026, CPFIS-OA approved ETFs include STI ETFs (ES3, G3B) and select global equity ETFs with TER below 0.75% p.a. Accessible via CPFIS agent banks (DBS, OCBC, UOB, POSB). Compare brokerage transaction costs – they can erode returns for small investment amounts. See ETF Tracking Error for evaluating fund quality.
Frequently Asked Questions
What returns does CPFIS typically generate?
Returns vary by investment. Pre-reform high-fee unit trusts often underperformed the 2.5% OA rate. Post-reform (2018-2019) with lower-fee funds, global equity index funds in CPFIS-OA have generally outperformed 2.5% over 10-year horizons.
Is it better to leave CPF in OA or invest via CPFIS?
For most members with shorter horizons or lower risk tolerance, leaving savings in OA at 2.5% risk-free is safer. For members with 10+ year horizons and discipline to use low-cost index ETFs, CPFIS-OA may add value. CPFIS-SA is generally not recommended as beating 4% guaranteed is very difficult.
What is the investable threshold for CPFIS?
You can only invest OA savings above S$20,000 (the minimum required to remain uninvested). For SA, the threshold is S$40,000. Only the amount above these thresholds is available for CPFIS investment.
Can CPFIS investments lose money?
Yes – CPFIS investments carry market risk. Unlike guaranteed CPF rates, there is no floor on investment returns. Losses must still be accounted for – you may end up with less than if you had left savings in OA.
Which CPFIS investments have performed best historically?
Global equity funds tracking the S&P 500 or MSCI World in CPFIS-OA have generally outperformed 2.5% over long horizons, particularly in the 2010-2024 bull market. STI ETFs have had mixed performance. Fixed income CPFIS funds generally struggle to beat 2.5% after fees.
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