CPF on FIRE: The 10 Commandments you must follow before investing your CPF money (2026 Update)

Back in 2019, after the analysis I had done on the STI ETF and the findings that came from that analysis, it made me wonder if we should be investing our CPF OA monies in the STI ETF for the better returns.

If you’re not yet aware, as part of the CPF Investment Scheme (CPFIS), the Singapore Government allows CPF members to invest their CPF Ordinary Account (OA) and Special Account (SA) monies into a set of government-approved investment vehicles instead of leaving it in the account to earn the risk-free interest. Included in the list of the approved vehicles are the SPDR STI ETF and the Nikko AM STI ETF, so you can choose either to invest in, but should you?

Since the STI ETF had demonstrated such high returns over the 11 years analysed, for both DCA and Lump Sum, it’s easy to see why it might be attractive to forego the guaranteed-but-small returns of the CPF OA and instead park it into the STI instead.

Update [14-Aug-2026]: I first wrote this article in 2019, when the CPF Investment Scheme had few attractive passive investment options and I still expected to need my CPF OA for housing. Both circumstances have since changed.

CPF OA investors can now access low-cost passive index funds offering broad global exposure. After selling my previous home in 2023, I no longer expected to need my CPF OA for housing, so I invested the available balance in the Amundi Index MSCI World Fund. I remain invested today.

The underlying checklist in this article still reflects how I think about the decision: don’t invest money you may need soon, maintain a long investment horizon and make sure you can tolerate the volatility of equities. What has changed most is Commandment #8 – the STI ETF is no longer the only reasonable passive option.

You can read why I eventually decided to invest my CPF OA here.

However, there are many things you need to consider before jumping to invest your hard-earned CPF money as there are other things you can use it for. Plus, a risk-free return is nothing to sneeze at. So when should you consider investing your CPF? Does it ever make sense?

After a bit of thinking and looking through all the options, I found that there are 10 conditions that you must meet before thinking about investing the CPF money, I even have the clickbaity title to go with it. So as you go through these conditions, check to see if you meet the criteria.

Here are the 10 Commandments you must meet before you consider investing your CPF money:

Commandment #1: Thou shall be 18 years old or older

The first condition is simple: you must be at least 18 years old to invest under CPFIS. Only start looking at investing the CPF money after you turn 18.

Commandment #2: Thou shall have more than S$20,000 in your CPF OA

Another condition to qualify for CPFIS, you are only able to invest CPF OA money that is above the first S$20,000. If you have yet to reach this level of CPF OA balance, forget about investing it.

Commandment #3: Thou shall have reached the Full Retirement Sum in your CPF SA

Important clarification: Reaching the Full Retirement Sum in my CPF SA is my own rule of thumb, not a CPFIS eligibility requirement. You can invest your OA savings above the first S$20,000 without first reaching the FRS or having S$40,000 in your SA.

Previously, I wrote about how to optimally handle your CPF LIFE with the conclusion that in order to make full use of the CPF LIFE, you should try to reach the Full Retirement Sum as quickly as possible to enjoy the benefits of the payout when you reach the age of 65.

So if you haven’t already reached your Full Retirement Sum in your CPF SA, you have a lower risk option than investing your CPF OA money.

Commandment #4: Thou shall only invest your CPF OA monies

Although you are allowed to invest both your CPF OA and SA, the money in the CPF SA earns a much higher risk-free return (4%) than CPF OA does (2.5%) – for amounts past the bonus interest. You should be taking full advantage of that before starting any investment.

Commandment #5: Thou shall not need the CPF money for housing

For the amounts of money within your CPF OA, you are allowed to use this money to purchase a home. The several uses in this regard are:

1. Pay for the down payment on the property.
2. Pay for the monthly instalment of the mortgage on the property.

If you have a plan to purchase a home or getting a mortgage to purchase a property, you should make use of the CPF money for this purpose first or else you will end up having to fork over money from outside your CPF to pay for your down payment and mortgage instalment.

There’s really no point to try to invest your CPF money but you end up having to use cash to pay for a mortgage. Only start investing your CPF if you already have your mortgages and down payment covered by your CPF.

Important Note: This does not mean that you should use your CPF OA to repay your mortgage early! Mortgages are the lowest interest loan that you can possibly get because the loan is backed by the value of your property. The interest rate is almost always lower than the CPF OA interest rate and if you use your CPF OA to pay your mortgage (let’s say it’s at 2%), you are converting a 2% mortgage into a 2.5% CPF OA loan (and you lose the 2.5% interest from the government on that amount, a double whammy!) So only use your CPF OA to repay exactly the monthly mortgage payment amount. Use it instead of paying the mortgage in cash so you can use your cash to invest outside of the CPF in options with better returns (like building your 3-Fund Portfolio.)

Commandment #6: Thou shall not need the CPF money for education

Aside from housing you can also make use of CPF to pay for education expenses for yourself, your spouse, children or siblings with the CPF Education Scheme. Although it is a loan and you must pay back the principal plus the interest after you graduate, with the bank’s prime rate hovering between 5.2% and 5.4% in the last 10 years (and this is as low as it’s ever been), the 2.5% interest rate of the CPF OA is a steal.

One big caveat however, the CPF start calculating interest immediately after you withdraw from the account, however bank education loans tend to be interest-free up until 6 months after graduation – giving you more time to find a job and start paying back the loan before interest starts piling up. I’ve calculated the breakeven between CPF Education Scheme and bank education loans (2.5% interest vs 5.2% interest respectively) to be about 3 years. So if you can pay back your loan within 3 years of graduation, taking a bank loan is better than CPF, otherwise if you take longer to pay back the loan, the CPF Education Scheme is the way to go.

So if you or your spouse and children are looking to further your studies, you should figure out if you should use your CPF OA monies for that first before looking to investing it.

Commandment #7: Thou shall not need to top up your parents or spouse’s CPF SA

In addition to topping up your own CPF SA to earn higher interest rate and reach the Full Retirement Sum faster, you are also able to use your CPF OA to topup the CPF SA of your parents or spouse to help them build up their Retirement Sum. As their CPF SA also receive the higher 4%-5% interest, you may want to first contribute to that to help them out before considering to invest the money in your OA.

If you are certain that you won’t need to help out your parents or spouse, you can look to the next commandment.

Important Note: In terms of tax relief, if you wish to help out your parents or spouse, you should use cash topup instead of transferring your CPF OA money as you get a tax reduction on the cash topup amount (which you do not get when you transfer your CPF OA since that’s already been tax exempted.)

Commandment #8: Thou shall keep thy investments low-cost, passive and diversified

The only time that you should consider investing your CPF OA monies is when you can make a better return on your investment to sufficiently outperform the 2.5% interest enough to make up for the risk you are taking.

When I first wrote this article in 2019, the STI ETFs were the closest thing CPFIS offered to a relatively low-cost passive equity fund. That was why I treated the STI ETF as the only sensible option at the time.

The situation has now changed substantially.

CPF OA investors can now access low-cost passive funds that track broad global indexes. This is a much better fit with my preference for global diversification. If I am giving up the guaranteed 2.5% CPF OA interest and taking equity risk, I want to:

1. Invest passively instead of trying to select winning fund managers.
2. Diversify as broadly as the available options reasonably allow.
3. Keep the total cost – including both fund-level and platform fees – as low as possible.
4. Avoid choosing an investment based solely on its recent performance.

A broad global index fund does all of the above.

My own CPF OA remains invested in the Amundi Index MSCI World Fund available via Endowus or POEMS. That is my current implementation, not a recommendation that everyone must use the same fund. Available products and fees can change, but the principles above should remain useful.

Commandment #9: Thou shall not need the CPF money for at least 10 years

Investing is risky and the short term returns are never guaranteed. The returns of index investing, no matter which index you follow is only going to trend positive over a long term, in this case the length of time is likely going to be around 10 years.

You can refer to my 4 part series on the returns of the STI ETF for a better understanding of the rate of returns in the last 11 years. In the short term the rate of returns is extremely volatile and only trends towards less volatility as the time horizon increases. You’re more likely to have a positive return – a return higher than the CPF OA – if you hold on to the investment for a longer period. So make sure you won’t need this money for anything else in the above commandments before even considering to invest this money. If you do need it, you may be forced to sell your investment when the timing is not favourable and end up losing money.

Of course if you are investing already, remember to also reinvest your dividends.

Commandment #10: Thou shall have a high tolerance for risk

Before doing any investments, you must understand your own risk tolerance. All investments involve risk and it’s possible that your investment tanks 50% overnight. You must have the mental fortitude to handle this kind of drop without panicking and selling your investments if you want to park your hard-earned money into equities. Even though investing in global index funds lowers the risk due to diversification, if the global economy enters a recession, then a large drop like in 2008-2009 is not impossible. By investing into global index funds, you are ensuring that your holdings have an extremely low likelihood of going to zero unlike investing in individual companies (which can go bankrupt.) Of course if a global index fund goes to zero, we all probably have much bigger things to worry about.

In order to understand your risk tolerance, you can take the CPFIS Self-Awareness Questionnaire (SAQ) provided by the CPF Board before investing your funds.

Conclusion

So how did you do?

When I first wrote this article in 2019, I was far from ready to invest my CPF dollars because I had not met Commandments #3 and #5. At the time, leaving the money untouched was the right decision for me.

My circumstances later changed. After selling my previous home, roughly S$180,000 of my CPF OA became investable, I no longer expected to need it for housing, and low-cost passive global index funds had become available. I invested the money in the Amundi Index MSCI World Fund, and I remain invested today. I expect to stay invested until I need the funds for my next home – whenever that may be.

That does not mean everyone should invest their CPF OA. The guaranteed 2.5% return remains valuable, especially if you may need the money, have a shorter investment horizon or cannot tolerate a large fall in the equity market.

But if you meet the conditions above, I no longer think investing your CPF OA is something to avoid by default. It can be a sensible extension of a passive, globally diversified portfolio.

My circumstances changed, and the investment options improved. The basic decision framework did not.

What do you think about the 10 Commandments? Do you agree or disagree or have anything to add to this list? As always, I’d love to hear your feedback and comments. Feel free to leave it down below or message me on X @firepathlion.

Until next time!
FPL