How can CPF be used?
1. Property
The CPF Ordinary account is approved for the purchase of residential (only for 80% of the value) and commercial properties (only for 70% of the value). Residential real estate includes freehold and leasehold private property (at least 60 years lease remaining) located in Singapore.
You can use the entire funds in the Ordinary account to cover the initial down payment for HDB. For private residential property, you have to pay your initial downpayment in cash. You can use your future CPF contributions to finance installment payments for these purchases. If your monthly contribution does not meet the mortgage instalment in full, you can use funds from the Special account but capped at 6% of your November 1998 salary. However, if in 1999 you did not accept this offer, you will not be able to use the special account.
If you sell your property, the proceeds from the sale of your property must be used to first repay the principal amount withdrawn plus accrued interest to your CPF account. Any remaining balance is credited to you.
How to get the best deal?
Price: Apart from location, price is of course the most important attribute of the property. Check the transaction prices for similar property transaction in the area to make sure you are not overpaying for your property.
Mortgage: The next most important factor is your mortgage. Check with various banks and keep an eye out for any promotions by the financial institutions.
2. Insurance
In addition to the Medishield/Medishield Plus insurance schemes, you can use CPF savings in the Ordinary account to finance the purchase of endowment insurance policies from private insurance companies under the Private Medical Insurance Scheme (PMIS). The full ordinary account balance can be invested in single premium policies.
Withdrawal of funds from CPF is quick once approved, and you can do it via the insurance company.
How to get the best deal?
When you are buying insurance, you should look for the lowest premium with the highest return. To do this, check with a few insurance companies and ask for the range of their products, noting the calculation of premiums and the potential returns.
Tax implications
Proceeds from the maturity of the insurance policies and claims are not taxable. To qualify for tax relief for the annual premium payment, your total annual premium plus CPF contributions cannot exceed S$5,000 a year.
3. Investments
To help you get better returns on your CPF savings, the government allows you to invest your CPF savings through the CPF Investment Scheme. The amount available for you to invest is calculated based on the balance at the end of every month. Each revision includes any new contributions received in your CPF account. In order to invest the funds from your Ordinary Account, you would require a CPF Investment Account. Investing funds from your Special Account, on the other hand, would not require a Investment Account. Withdrawl of funds for purchase or credit of proceeds from the sale of these investments can be done through financial institutions offering the various financial products.
1. Property
The CPF Ordinary account is approved for the purchase of residential (only for 80% of the value) and commercial properties (only for 70% of the value). Residential real estate includes freehold and leasehold private property (at least 60 years lease remaining) located in Singapore.
You can use the entire funds in the Ordinary account to cover the initial down payment for HDB. For private residential property, you have to pay your initial downpayment in cash. You can use your future CPF contributions to finance installment payments for these purchases. If your monthly contribution does not meet the mortgage instalment in full, you can use funds from the Special account but capped at 6% of your November 1998 salary. However, if in 1999 you did not accept this offer, you will not be able to use the special account.
If you sell your property, the proceeds from the sale of your property must be used to first repay the principal amount withdrawn plus accrued interest to your CPF account. Any remaining balance is credited to you.
How to get the best deal?
Price: Apart from location, price is of course the most important attribute of the property. Check the transaction prices for similar property transaction in the area to make sure you are not overpaying for your property.
Mortgage: The next most important factor is your mortgage. Check with various banks and keep an eye out for any promotions by the financial institutions.
2. Insurance
In addition to the Medishield/Medishield Plus insurance schemes, you can use CPF savings in the Ordinary account to finance the purchase of endowment insurance policies from private insurance companies under the Private Medical Insurance Scheme (PMIS). The full ordinary account balance can be invested in single premium policies.
Withdrawal of funds from CPF is quick once approved, and you can do it via the insurance company.
How to get the best deal?
When you are buying insurance, you should look for the lowest premium with the highest return. To do this, check with a few insurance companies and ask for the range of their products, noting the calculation of premiums and the potential returns.
Tax implications
Proceeds from the maturity of the insurance policies and claims are not taxable. To qualify for tax relief for the annual premium payment, your total annual premium plus CPF contributions cannot exceed S$5,000 a year.
3. Investments
To help you get better returns on your CPF savings, the government allows you to invest your CPF savings through the CPF Investment Scheme. The amount available for you to invest is calculated based on the balance at the end of every month. Each revision includes any new contributions received in your CPF account. In order to invest the funds from your Ordinary Account, you would require a CPF Investment Account. Investing funds from your Special Account, on the other hand, would not require a Investment Account. Withdrawl of funds for purchase or credit of proceeds from the sale of these investments can be done through financial institutions offering the various financial products.
