CPF Investment Account: Beginners’ Guide

Financially Reviewed by Edward Hee
By Firdaus Syazwani

Published: 19 August, 2024
Last Updated: 13 November, 2024

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Thinking about diving into the world of CPF Investment Accounts (CPFIA) but not sure where to start?

You’ve come to the right place.

As someone who has navigated the intricacies of financial planning in Singapore, I’ve compiled all you need to know about CPFIA in this comprehensive guide.

In this post, you’ll learn:

What a CPF Investment Account is
How to open and switch CPF Investment Accounts
The costs involved with DBS, UOB, and OCBC
Whether switching banks is the right move for you

Keep reading to discover all the ins and outs of managing your CPFIA and making the most of your CPF savings.

What is a CPF Investment Account (CPFIA)?

A CPF Investment Account offers you a way to invest your CPF savings via the CPF Investment Scheme (CPFIS).

This scheme is designed to help you grow your retirement funds by allowing you to invest a portion of your CPF savings in a variety of financial products, such as stocks, bonds, unit trusts, and exchange-traded funds (ETFs).

The goal is to achieve potentially higher returns than what the standard CPF interest rates offer, giving you a better chance of securing a comfortable retirement.

When you open a CPFIA, you can diversify your investment portfolio beyond the typical interest rates offered by CPF.

This flexibility is particularly useful for those who are knowledgeable about the financial markets and are looking for ways to enhance their retirement nest egg.

Should I use DBS, UOB, or OCBC for my CPF Investment Account?

To determine which bank offers the overall cheapest option for a CPF Investment Account, let’s break down the key charges across DBS, UOB, and OCBC.

We will compare the transaction charges, quarterly service charges, and any additional fees.

Bank	Asset Type	Transaction Charges	Asset-Related Charges	Quarterly Service Charges	Service Charges
DBS Bank Ltd	Shares/ Loan Stocks / Unit Trusts / Property Fund /ETFs For every purchase, sale, application for rights, application for excess rights (successful or unsuccessful), cash offer, conversion of loan stocks/warrants/preference shares, IPO allotment and exercise share options	$2.73 (inclusive of GST) per 1,000 shares/loan stocks/units or part thereof subject to a maximum of $27.25 (inclusive of GST) per transaction	Service charge is levied for the maintenance of the account and for services rendered, e.g., handling of dividends, interest and bonus payments and other entitlements.	$2.18 (inclusive of GST) per share/loan stock/unit trust counter per quarter, subject to a minimum charge of $5.45 (inclusive of GST). No minimum charge for accounts holding Singtel B shares only.	–
	Gold ETFs Every purchase and sale	$2.73 (inclusive of GST) per 10 units or part thereof subject to a maximum of $27.25 (inclusive of GST) per transaction			–
	Gold	Transaction charge is 0.125% per annum of value of gold subject to a minimum of $2.18/- (inclusive of GST) per piece of gold in the case of physical gold, per transaction in the case of gold savings account. For gold certification, transaction charge is $32.70/- (inclusive of GST) flat per annum.	–	–	Subsequent service charge at $32.70/- (inclusive of GST) flat per annum. Subsequent service charge for physical gold and gold savings is at 0.125% per annum based on value of outstanding balance of gold kept under the Account at the end of the year. Service charge is payable in advance at the beginning of each year.
	Fund Management Accounts Fixed Diposits Insurance Policies Investment Administrators For every payment/receipt of funds, interest received, lapsed insurance policy and reinstatement of insurance policy.	$2.73 (inclusive of GST) for each placement/payment, receipt, and lapse/reinstatement transaction	Service charge is levied for the maintenance of the account and for services rendered	$2.18 (inclusive of GST) per counter per quarter	–
	S’PORE Govt Securities For every purchase, sale and maturity	$2.73 (inclusive of GST) for each transaction			–
	Statutory Board Bonds For every purchase, sale and maturity	$2.73 (inclusive of GST) per tradable lot or part thereof subject to a maximum of $27.25 (inclusive of GST) per transaction.			–
	Cancellation of Trades	$5.45 (inclusive of GST) for each transaction which failed due to insufficient funds, insufficient sublimit, insufficient holdings, or cancellation of contracts.	–
	IPO Share Application ESA CPF Cashier’s Order Digibank	$2.18 (inclusive of GST) for each transaction	–
	Rights and Excess Rights Application where CPF Funds cannot be used	$10.90 (inclusive of GST) for each rights application, $5.45 (inclusive of GST) for each excess rights application (successful or unsuccessful)	–
	Interbank Transfer Account	$3.27 (inclusive of GST) per 1,000 shares/loan stocks/units/ tradable lot of part thereof, subject to a maximum of $32.70 (inclusive of GST) per transaction. For other investments, $3.27 (inclusive of GST) per transaction	–
	Refunds of available from CPF Investment A/C to CPF Ordinary Account	No charge	–
UOB (United Overseas Bank)	Shares / Loan Stocks / Unit Trusts / Exchange Traded Funds / Property Funds / Corporate Bonds Purchase, Sale, Conversion of Loan Stocks, IPO Allotment, Scheme of Arrangement or Rights and Excess Rights Application	S$2 per 1,000 shares / units or part thereof, subject to a maximum of S$20 per transaction	S$2 per counter/holding per quarter		–
	Gold Exchange Traded Fund ‘ Purchase or Sale	S$2 per 10 shares, subject to a maximum of S$20 per transaction			–
	Fixed Deposits / Fund Management Accounts /Insurance Policies / Investment Administrators Payment or Receipt of funds	S$2 per transaction			–
	Singapore Government Securities Purchase or Sale	S$2 per transaction			–
	Statutory Board Bonds / Bonds Guaranteed by Singapore Government Purchase or Sale	S$2 per tradable lot, subject to a maximum of S$20 per transaction			–
	Gold Physical Gold / Wafer Gold Certificate Gold Savings Account	¼ % per annum of value, subject to a minimum of S$2 per month administrative charge of S$72 per kilobar per annum ¼ % per annum based on highest balance for the month subject to a minimum of 0.12 grams per month			–
	Other transactions Inter-bank Transfer of Account Cancellation of trades Application for Initial Public Offer By Electronic Share Application By CPF Cashier’s Order	S$3 per 1,000 shares / units or part thereof subject to a maximum of S$30 per counter and S$3 per counter for other types of investments S$5 to process each unsuccessful transaction or cancellation e.g. due to insufficient funds, holdings or cancellation of trades S$2 per application S$5 per application	–
OCBC	Fixed Deposits, Fund Management Accounts & Insurance Policies Payment/Receipt of Funds	$2.50 per transaction	$2.00 per counter per quarter		–
	Gold Safe custody charges	0.25% per annum, based on the highest balance during the month subject to a minimum of $2.00 per month.	–
	Shares/ Loan Stocks/ Unit Trust Purchase, Sale, Rights Application, Excess Rights Application (successful or unsuccessful), Cash Offer, Conversion of Loan Stock and IPO Allotment. Right’s application for warrants using cash	$2.50 per 1000 shares/units or part thereof, subject to a maximum of $25.00 per transaction. $15.00 per transaction	$2.00 per counter per quarter		–
	Singapore Government securities Purchase and Sale transaction	$2.50 per transaction			–
	Statutory Board Bonds Purchase and Sales Transactions	$2.50 per tradable lot or part thereof, subject to a maximum of $25.00 per transaction.			–
	Other transactions Interbank Transfer of Account Cancellation of trades Application for Initial Public Offer By: Electronic Share Application CPF Cashier’s Order	$3.00 per 1000 shares/units or part thereof, subject to maximum of $30.00 per transaction. For other investment, $3.00 per transaction $5.00 to process each unsuccessful transaction eg. Due to insufficient funds, holdings or cancellation of trades $2.00 per transaction $2.00 per transaction	–

Comparison Analysis

Transaction Charges:
- DBS: $2.73 per 1,000 shares/units (max $27.25)
- UOB: $2 per 1,000 shares/units (max $20)
- OCBC: $2.50 per 1,000 shares/units (max $25)
Quarterly Service Charges:
- DBS: $2.18 per counter (min $5.45)
- UOB: $2 per counter
- OCBC: $2 per counter
Additional Charges:
- Gold Transactions:
  - DBS: 0.125% per annum (min $2.18)
  - UOB: 0.25% per annum (min $2 per month)
  - OCBC: 0.25% per annum (min $2 per month)
- Interbank Transfer:
  - DBS: $3.27 per 1,000 shares/units (max $32.70)
  - UOB: $3 per 1,000 shares/units (max $30)
  - OCBC: $3 per 1,000 shares/units (max $30)
Cancellation of Trades:
- DBS: $5.45 per transaction
- UOB: $5 per transaction
- OCBC: $5 per transaction
IPO Share Application:

- DBS: $2.18 per transaction
- UOB: $2 per transaction (electronic), $5 per transaction (CPF Cashier’s Order)
- OCBC: $2 per transaction (electronic), $2 per transaction (CPF Cashier’s Order)

Overall, UOB appears to be the cheapest option for a CPF Investment Account.

UOB offers the lowest transaction charges and quarterly service charges among the 3 banks, making it a cost-effective choice for most transactions related to CPFIA.

Their maximum cap on transaction charges is also lower, and the service charges are straightforward and reasonable.

How to open a CPF Investment Account?

Opening a CPF Investment Account is a straightforward process that you can complete online if you are an existing customer of DBS, UOB, or OCBC.

Each bank has a specific application link that you can follow to open your CPFIA:

These links will guide you through the necessary steps to open your CPF Investment Account with your chosen bank.

Can I have multiple CPF Investment Accounts?

You are only allowed to have one CPF Investment Account (CPFIA) at any given time.

This rule ensures that your CPF savings are managed consistently and efficiently within a single account framework.

Having a single account also simplifies the monitoring and management of your investments, making it easier to keep track of your financial growth and objectives.

I already have a CPF Investment Account, should I switch banks?

If you already have a CPF Investment Account (CPFIA) and are contemplating whether you should switch banks, there are several factors to consider.

Do you want to reduce fees?

If your primary goal is to minimise fees, then yes, switching to a bank with the absolute lowest fees might be beneficial.

Lower fees can significantly impact your overall investment returns over time, allowing you to maximise the growth of your CPF savings.

However, based on my research, there is no indication that banks will not adjust their rates in the future.

This means that while one bank may currently offer the lowest fees, this could change.

Banks periodically review and adjust their fee structures based on market conditions and regulatory changes.

Therefore, it’s essential to stay informed about any potential fee adjustments that could affect your decision.

Switching costs

Switching banks also involves considering the cost of switching, which includes the time and effort required to transfer your account.

The process may involve paperwork, coordination between your current and new banks, and potential delays during the transition period.

It’s crucial to weigh these factors against the potential benefits of lower fees to determine if the switch is worth the hassle.

Additionally, you should consider other aspects apart from fees when deciding whether to switch banks.

Other costs

Customer service quality, ease of use of the bank’s digital platforms, and the range of investment products offered are all critical factors.

A bank with excellent customer service can provide better support and guidance, especially if you encounter any issues with your investments.

Similarly, a user-friendly digital platform can make managing your investments more convenient and efficient.

While switching banks to secure the lowest fees can be advantageous, it’s essential to consider the broader picture.

Evaluate the potential cost of switching, the likelihood of future fee adjustments, and other qualitative aspects like customer service and ease of use.

How do I switch CPFIA banks?

Each bank has its own procedures to guide you through the transfer.

To make the switch, simply click on the relevant link based on the bank you want to transfer to:

These links will provide you with detailed instructions on how to switch your CPF Investment Account to your chosen bank, ensuring a smooth transition.

Conclusion

We’ve covered what a CPFIA is, highlighted the benefits of having one, and looked at whether you can hold multiple accounts (you can’t, but you can switch banks).

We’ve also explored the factors to consider if you’re thinking about switching banks to get the lowest fees, and provided links to guide you through the process with DBS, UOB, and OCBC.

If you’re still feeling a bit lost or unsure about your next steps, don’t worry.

Financial planning can be complex, and it’s perfectly normal to have questions.

Feel free to reach out to one of our trusted financial advisor partners.

They’re here to help you navigate your options and make the best decisions for your financial future.

And the best part?

It’s absolutely free.

So why not get the peace of mind you deserve and chat with an expert today?

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References

Firdaus Syazwani

In 1999, Firdaus's mother bought an endowment plan from an insurance agent to gift him $20,000. However, after 20 years of paying premiums, Firdaus discovered that the policy was actually a whole life plan with a sum assured of $20,000, and they didn't receive any money back. This experience inspired Firdaus to create dollarbureau.com, so that others won't face the same problem of being misled or not understanding what they are purchasing – which he sees as a is a huge problem in the industry.

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