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17 May 2024


New graduates

As a fresh graduate entering the workforce, your first pay cheque marks the beginning of more than just financial independence—it's your start to long-term financial planning.


Having a sound financial plan helps ensure that you can start early in being financially prepared for your first home and retirement. While it can seem like a long way before you get to achieve these milestones, starting early gives you a strong head start.  


Your CPF accounts play an important part in financial planning and you contribute 20% of your gross salary a month with your employer contributing an additional 17%. With a sizeable portion of your salary being channelled to your CPF, it’s important to start by learning more about the different CPF accounts and how they can contribute to meeting your goals.

Understanding your CPF Accounts:

Leveling up your OA

*The extra 1% interest rate per annum only applies for the first $60,000 of one’s combined CPF balances, with the amount in the OA capped out at the first $20,000.

Ordinary Account (OA): Can be used for purchasing property and servicing housing loan. Provides a stable interest rate of 2.5% per annum.


Special Account (SA): Focuses on your retirement needs, offering a higher interest rate of 4.05%* per annum.


MediSave Account (MA): Covers healthcare expenses and approved medical insurance premiums, growing at the same rate as your SA.


*The interest rate for Special, MediSave and Retirement Account is 4.05% per annum from 1 April 2024 to 30 June 2024.

CPF tips for fresh graduates:

1. Plan for your first home wisely

New homeowners

A housing purchase is a huge long-term commitment. While it may be tempting to use all your OA savings for your first home, it’s important to exercise prudence and opt for one that you can afford comfortably.


Be sure to also consider factors such as your budget, timeline, personal preferences as well as the overall market conditions to make an informed decision.


At the same time, keep an eye out for grants for first-time buyers that can reduce the amount of cash and CPF savings you have to pay.  

2. Start saving early by making voluntary contributions to your CPF accounts


Thanks to the power of compound interest, even small monthly top-ups to your SA can significantly enhance your retirement savings.


If you begin setting aside $100 per month at the age of 25, and your savings earn an average annual return of 4% per annum, your money will grow to over $116,000 by the time you retire at age 65.


But by waiting a decade later at age 35 to start saving, you will need to save $170 per month to achieve the same amount at age 65.


Try setting aside a portion of your monthly income to boost your SA savings early on. Even a small amount of $100 a month can go a long way!

3. Stay protected from large medical bills with health insurance

Young adult eating healthy

Health insurance is an important part of financial planning, offering protection and peace of mind during times of unexpected medical emergencies. Adequate coverage ensures that you and your loved ones can face health challenges without the added stress of significant financial burden.


While it's essential to have protective coverage, over-insuring can strain your financial resources unnecessarily. Premiums for multiple insurance policies can quickly add up, affecting your ability to save or invest for other important life goals.


For those new to health insurance, starting with a foundational understanding of products like the Integrated Shield Plan (IP) is beneficial. The IP supplements your basic MediShield Life coverage in Singapore, covering additional costs for higher-class ward stays and private hospital care.

4. Make a CPF nomination early on

A valid CPF nomination ensures that your savings are distributed according to your wishes after you pass on.


If you do not make a CPF nomination, upon your passing, your CPF savings will be transferred to the Public Trustee for distribution in cash to your family member(s) in accordance with intestacy laws or Faraid, the Islamic Inheritance Law. The Public Trustee will charge a fee for the provision of this service.


The good thing about making a CPF nomination is that it is completely free, and you can do online. With your life circumstances changing over the years, it’s important to regularly review your CPF nomination as part of good financial planning.

5. Maximise your tax reliefs

Young adults in the workforce

Receiving your tax bill for the first time might come as a shock, but there are effective ways to reduce your payable tax. A common way is through your monthly CPF contributions, which are eligible for tax reliefs. These contributions lower your taxable income, offering a straightforward way to ease your taxes.


To further decrease your tax payable, consider making a Retirement Sum Top-Up. By topping up your own and your loved ones’ CPF accounts, you can enjoy tax relief of up to $16,000*. This move not only helps manage your current tax obligations, but also strengthens your long-term financial planning.


On top of the CPF-related reliefs, it’s also a good idea to check out the different types of tax reliefs that apply to you. This includes a Parent Relief of $9,000 per dependent if your parents, parents-in-law, grandparents, or grandparents-in-law are at least 55 years old and have an annual income not exceeding $4,000.


*Terms and conditions apply

Start your working career right with these CPF tips for fresh graduates


There can be a lot of unknowns about the road ahead when you are just starting out. To help you navigate that uncertainty and prepare you for the future, your CPF accounts are there to support both your immediate and future needs.


By understanding how the CPF system works, you’ll be able to get a head start on getting your dream house, prepping for your healthcare needs, and living your desired retirement in time to come!

The information provided in this article is accurate as of the date of publication.