Why Financial Planning?

Planning is bringing the future into the present so that you can do something about it NOW.

Like all developed economies, Singapore also has a central retirement fund called the Central Provident Fund (CPF) managed by the CPF Board. The CPF is a mandatory employment-based savings scheme with defined contributions from the employees and their employers. Both contribute a pre-defined percentage of the employee’s compensation to the CPF funds.

The primary objective of the CPF is to help the working populace, Singapore citizens as well as Singapore Permanent Residents (SPRs), fund their healthcare, retirement, and housing needs.

Singapore CPF

Types of Accounts In Singapore CPF

Under the CPF Act, employees and employers must make regular monthly contributions to the employee’s CPF accounts. There are three types of accounts to which the contributions are allocated.

Must Read- 10 Best NRI Investment Options

Ordinary Account (OA)

This account helps build the corpus for housing, insurance, investment, and educational needs of the investee.

Special Account (SA)

The special account is built for old age investments and it is invested in retirement-related financial products.

Medisave Account (MA)

To take care of the payment for approved medical insurance and hospitalization needs of the employees, the Medisave account contributions are used.

Retirement Account (RA)

This is not a separate account, but when you turn 55, the OA and SA are combined into the Retirement Account (RA). The RA is used to make monthly payouts in the form of annuities to meet basic needs post your retirement.

Contributions and Allocations

As per Singapore laws, contribution and allocation rates change with your age group. This helps ensure the employability of workers as well as meeting their financial needs later in life.

The CPF seeks more contributions from younger workers and their employers than from older employees. As you contribute more, early in your career, even small contributions compound for a longer period. As one grows older, the contribution decreases to allow for more take-home salary.

The following table shows the ratio of contributions and allocations for a person earning SGD 750/month.

Singapore CPF for NRI

Must Check –401k Plan Before Moving Back To India

Earnings on CPF

Not only contributions and allocations are well-defined, the earnings on each of The CPF account are defined from time to time depending on the current standard of living, inflation rate, and monetary policy prevailing in Singapore. CPF savings earn at least 2.5% interest on OA balance, and at least 4% for SA, MA, and RA.

Conditions of Withdrawal cpf

What are your options?

Contribution to CPF is not an option for anyone working in Singapore as all Citizens and SPRs must make monthly CPF contributions. This applies to all workers in Singapore on a contract, or in a permanent, part-time, or casual capacity.

For self-employed and business persons, only MA contributions are mandatory. They can, however, voluntarily contribute to all three CPF accounts. The voluntary contributions will be credited to the OA, SA, and MA as per the usual CPF allocation rates.

Check – NPS for NRI 

Investment options

However, all CPF members can invest in specified securities and avenues their OA and SA balances under the CPF Investment Schemes CPFIS-OA and CPFIS-SA, for their OA and SA accounts, respectively. You can make these investments only if you have a balance in excess of SGD 20,000 in OA, and SGD 40,000 in SA, w.e.f. July 1, 2020.

Specified assets include:

  • Insurance
  • Unit Trusts
  • ETFs
  • Fixed Deposits
  • Government Bonds & Treasury Bills
  • Shares on the Singapore Exchange
  • Property Funds
  • Gold


What to do when moving back to India?

If you wish to surrender your SPR status and return back to India, you must first settle all your tax liabilities. Your employer must notify the Singapore IRAS for tax clearance and ensure all your taxes are fully paid before your employment comes to an end.

Once you have tax clearance, you can apply for the complete withdrawal of your CPF balances from all three accounts in full.

Conditions of Withdrawal CPF Funds

NRIs (or their legal representatives) can withdraw CPF savings on the following grounds:

  1. If one has renounced their SPR status and leaving Singapore and West Malaysia permanently.
  2. If one has become certifiably permanently unfit for work due to physical or mental incapacity.
  3. Upon their death:
    • Upon the death, in Singapore, the relevant public agency will notify the CPF Board, and it will distribute the CPF balance accordingly.
    • If the NRI with SPR was residing overseas at the time of death, then you must inform the CPF Board in writing along with all the relevant documents like the local death certificate and SPR status documents.

Must check – Gift by NRI to Resident Indian

NRI Singapore CPF

Process of Withdrawal Central Provident Fund (CPF)

  1. Download and fill the CPF withdrawal form from here. You can find more details here.
  2. If you have already left Singapore, then all non-original documents will require certification by officials at Singapore Missions. For attestation of your signature on the CPF Withdrawal form, schedule an appointment at the Consulate/Mission and bring the following documents:
    1. CPF Withdrawal form
    2. Original passport for ID and signature verification
    3. Photocopy of passport for office records.
    4. Processing Fee
  3. Forward the CPF Withdrawal Form directly to the CPF Board.
  4. Once the application is approved and you have any income tax liabilities, the Inland Revenue Authority of Singapore (IRAS) will use your CPF funds to settle them. Mostly, you will get all your CPF balances in OA, SA, and MA accounts.
  5. The CPF Board will inform the agent bank about the closure of your CPF Investment Scheme – Ordinary Account. Once you receive notification from the Board, approach the bank to get you transferred to your own name. You may liquidate them and get paid directly of the sale proceeds.
  6. Similarly, for the CPF Investment Scheme – Special Account, the Product Provider will get notification from the Board to transfer your investments in your name. You can liquidate and have the sale proceeds.

The DTAA and Indian Tax Provisions

The DTAA between Singapore and India prevents double taxation of income earned and taxed in Singapore from being taxed in India again. Therefore, there is no tax liability on you for transferring CPF money to your NRE account.

However, as the money in the NRE account earns interest or is invested and income accrues on it, you will be liable to pay tax on that income earned in India.

If you receive annuity payments or pensions from former employers in Singapore, even after returning to India, then those are taxable as per your tax slab under the head ‘Income from Salary or Pension.’ This is again subject to the applicability of DTAA and is tax is already deducted by the employer in Singapore.

Check our

Retirement Planning Service For NRIs

Hope this gives you a good idea about Singapore CPF – if you have any questions add to the comment sections.

Singapore CPF
Published on July 1, 2021

Hemant Beniwal

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

  • Dear Mr. Hemant Beniwal,
    I have a question. I hold Indian Passport. I worked in Singapore for over 2 decades as Permanent Resident. After retirement, I have since returned to India. I still hold the Singapore PR. I have started receiving monthly payout from CPF Retirement Account in my bank account in Singapore.

    This year, I will be filing Indian Tax Returns as “Resident”.

    How are the monthly payout and the annual interest on my CPF accounts treated for tax in India for a “Resident ordinarily Resident”. My understanding is that the said CPF payout is not exactly a pension / annuity from a firm or a company.

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

    Related Posts

    How NRIs can complete KYC for investing in Mutual Funds in India?
    Should NRIs Get A Life Insurance Cover In India?
    Singapore CPF – What NRIs Should Know
    NRIs Renew Your Indian Passport Online, before it’s too late!

    Subscribe now to get the latest NRI updates!

    Share via
    Copy link