What common purchases are the CPF used for?
Singaporeans have their monthly salaries deducted as part of their contributions to the CPF (Central Provident Fund). The ultimate aim is to have this fund used for the retirement of the member. A common purchase that Singaporeans tend to use the funds is to buy an HDB flat and is one of the most expensive cities in the world, it can be quite financially challenging for the common Singaporean. In most cases, it would be normal that the CPF member uses the funds to pay for the downpayment of the flat unit.
Are there any other types of purchases I can pay using my CPF?
Yes, a lot of Singaporeans are not aware that they can use their CPF funds to pay for:
- Investments – The CPF makes investments on your behalf which are then credited into your Ordinary and Special Accounts. However, this does not mean that you leave everything in the hands of CPF. You can have a say on where to invest a certain portion of your CPF into. This is provided under the CPFIS or CPF Investment Scheme. You can invest your CPF funds provided that you have more than S$40,000 in your Special Account and S$20,000 in your Ordinary Account. In fact, you can invest up to 35% of your investible funds into stocks and 10% into gold as well as other types of money markets like ILPs or investment-linked insurance products ILPs, Treasury Bills, ETFs, Singapore Government Bonds and annuities.
- Stamp duty and legal fees – Your CPF Ordinary Account is used to buy an HDB flat. However, you can also use the funds in your account to pay for other costs involved when you purchase a home. This includes the stamp duty and legal fees like conveyancing charges. These fees are applicable at the point of signing the lease agreement. In most cases, the stamp duty is derived from the sale price of the HDB flat which is between 1 to 4%.
- Vaccination and healthcare – You should know that part of your CPF makes up your MediSave account where you can use it to cover certain medical expenses. This includes day surgery and hospitalization, among others. Your MediSave account can also be used for certain treatments that are not emergency and could be for preventive too. This is where you can use it to help to pay for certain types of vaccinations for yourself and your children like HPV and Tdap.