27 Feb 2026

SOURCE: CPF Board

You may have heard that CPF Board will introduce a new investment scheme in 2028 for long-term investors who are willing to take some risks to invest their CPF savings for potentially higher returns, but may prefer not to actively manage their investments or have less financial expertise.

Before this option becomes available, you might be wondering if you should invest your CPF savings through CPFIS. Here’s what you need to know.

Introduction to CPFIS

The CPF Investment Scheme (CPFIS) allows you to invest a portion of your CPF savings in a wide range of investments to enhance your retirement savings. 

The Government has been enhancing the scheme over the years to provide members with quality and low-cost investment options that can help members potentially enhance their retirement savings. 

Investment products available under CPFIS include unit trusts, shares, bonds, exchange-traded funds, and gold products, among others.

What to ask yourself before investing with CPFIS

1. Can you accept investment risks and ride out short-term market fluctuations?

All investments carry risk. Your risk appetite depends on factors like your age, income stability, and how soon you'll need your CPF savings. Remember that your CPF is primarily meant to support your retirement. Any investment decisions should be made with your risk appetite and investment horizon (the length of time before you’ll need to access your money) in mind.
 

Many inexperienced investors make gut decisions during market volatility. Ask yourself: Can you watch your CPF investment drop 20% or 30% during a market downturn without panicking? Will you sell at a loss, or will you wait out for your investment to recover with the rest of the market?
 

If you plan to purchase a home within the next few years and intend to use your OA savings, investing in high-risk and volatile products may not be appropriate. If market downturns occur close to when you need the funds, you might have to sell at a loss or delay your home purchase.
 

Instead, consider lower-risk investments with shorter maturity periods that align with your timeline, or simply let your OA savings continue earning stable, risk-free interest.
 

The general practice is that the longer your investment horizon, the more risk you can potentially take. With a timeline of 20 years or more, you have the capacity to ride out market fluctuations and recover from temporary downturns. 
 

However if you need the money within a short time, preserving your CPF savings by leaving them untouched in their respective accounts might be more beneficial than chasing higher returns.

2. Are you confident of beating CPF’s risk-free interest rates?

Your CPF savings earn stable, risk-free interest of up to 5% per annum on the first $60,000 of your combined CPF savings (if you are below age 55). If you are aged 55 and above, you can earn up to 6% per annum on the first $30,000 of your combined CPF savings, capped at $20,000 from the Ordinary Account (OA).
 

When you leave your CPF savings untouched, the funds in your CPF accounts will continue to grow over time with the power of compound interest.

However, if you choose to invest your CPF savings, the invested amount will no longer earn the risk-free CPF interest rates and will instead be subject to market performance.
 

This means that you must be confident that your investments will outperform the CPF interest rate. You'll also need to be prepared to wait out market downturns, as investments can experience periods of negative returns before recovering. 
 

Lastly, be sure to also keep an eye on management fees, transaction costs, and other charges that can reduce your overall returns.

3. Do you have the time and expertise to monitor your investments actively?

Managing your investments requires time and, more importantly, some degree of financial expertise that not everyone has.

You need to pick stocks and products, understand investment costs, track investment performance, monitor market trends, and make calibrations as your circumstances change.
 

With more than 700 products under CPFIS, the scheme offers plenty of options. If you’re keen to invest, you should understand the available products and be confident that your investment will beat CPF interest rates. 
 

Actively managing and monitoring investments may not be for everyone, and it’s important to understand your preferred investment approach before you invest.

While investing your CPF savings with CPFIS can potentially give you higher returns than CPF interest rates, there is also a possibility that you may earn less than the CPF interest rates or even incur losses.
 

Before investing, potential investors should carefully evaluate whether they can realistically outperform the CPF interest rates, understand the risks associated with investments, and assess their investment horizon. 
 

If you’re interested in taking your next investment step, take the CPFIS Self-Awareness Questionnaire to evaluate your risk appetite and determine if CPFIS is suitable for you.

If you decide that CPFIS is not suitable for you, don’t worry. Your CPF savings will still continue to grow steadily through risk-free interest rates. 

Information in this article is accurate as at the date of publication.