Singaporean employers and employees make contributions into the Central Provident Fund (CPF), each member account has multiple sub-accounts including an:
Ordinary Account,
Special Account, and
Medisave Account
It is the Ordinary Account which can be accessed to purchase a property. The Ordinary Account receives the majority of contributions – for someone under age 35 and earning above a threshold the contributions to the Ordinary Account are 23% of their wage, with 36% of their wage in total going to the CPF.
Subject to some conditions, Singaporeans are generally able to withdraw any amount from the Ordinary Account to put towards buying a property, and use any future contributions to the Ordinary Account to pay a mortgage. The Ordinary Account can also be used to pay for some expenses relating to the purchase or construction of a property, including legal costs and stamp duty.
However this is more of a borrowing than an early withdrawal – as if the property is sold the principal amount needs to be repaid, along with a calculated amount of interest. According to the CPF “this interest is the amount you would have earned, had the savings not been taken out”.
The amount that can be withdrawn for property is also subject to a limit “to encourage CPF members to be prudent when buying a property, and help them set aside more CPF for their old age needs ”.
More information is available on the Central Provident Fund website.
