Your CPF Ordinary Account (OA) pays 2.5% a year, guaranteed by law as a minimum. T-bills and fixed deposits sometimes advertise more, so buying T-bills with CPF OA savings looks like an easy gain.
It can be, but the hurdle is higher than 2.5%. CPF interest is worked out by calendar month, so a six-month investment usually costs you seven months of OA interest. On our illustration, a six-month T-bill needs to yield about 2.9% to break even, before fees. Here is the maths.
What You Can Do With OA Money
The CPF Investment Scheme (CPFIS) lets you invest OA savings in products including T-bills, Singapore Government Securities bonds, fixed deposits, unit trusts, exchange-traded funds, shares and gold products.
The main conditions:
- You must be at least 18, not an undischarged bankrupt, and have completed CPF’s Self-Awareness Questionnaire.
- You need a CPF Investment Account with DBS, OCBC or UOB.
- Up to 35% of your investible savings can go into shares and up to 10% into gold (see buying gold with CPF or SRS).
- Charges apply and are paid from your CPF savings.
CPF Board’s own guidance is to invest only if you are confident of earning more than the CPF interest rate. As at 30 September 2025, members held S$21.4 billion of OA and Special Account savings in CPFIS investments.
The First $20,000 Rule
Two separate rules both involve the figure $20,000, and they point the same way.
You cannot invest it. CPFIS requires $20,000 to stay in your OA. Only savings above that are investible.
It earns more than 2.5%. Members earn extra interest on the first $60,000 of combined CPF balances, and up to $20,000 of that can come from the OA. For members below 55 the extra is 1%.
So the money you are allowed to invest is the part of your OA earning the plain 2.5%. That makes 2.5% the right benchmark.
Why Six Months Costs Seven
CPF Board explains that interest is computed monthly, with two timing rules:
- Money withdrawn or deducted in a month earns no interest for that month.
- Money received in a month starts earning interest the following month.
Now follow a six-month T-bill. MAS says CPF funds are deducted one to three business days after the auction. Suppose that is in early March. The bill runs for 182 days and matures in early September.
Your OA earns nothing on that money for March, when it left. It earns nothing for April to August, while it was away. And it earns nothing for September, the month it came back. That is seven months of lost OA interest for about six months of T-bill return.
If the money sits idle in your CPF Investment Account past the end of that month, the count becomes eight. Only when the deduction and the return fall neatly inside six calendar months do you lose just six.
Break-Even Yields for T-Bills With CPF OA Savings
The table shows the T-bill yield at which you are no better and no worse off than leaving the money in your OA at 2.5%.
| Product | OA months lost | Break-even yield |
|---|---|---|
| 6-month T-bill (182 days) | 6 | About 2.48% |
| 6-month T-bill (182 days) | 7 | About 2.88% |
| 6-month T-bill (182 days) | 8 | About 3.29% |
| 1-year T-bill (364 days) | 12 | About 2.45% |
| 1-year T-bill (364 days) | 13 | About 2.64% |
| 1-year T-bill (364 days) | 14 | About 2.84% |
This is our own illustration, not an official figure. It assumes the OA rate stays at 2.5%, uses the MAS pricing formula for T-bills and ignores bank fees, which push every figure slightly higher.
The one-year bill has a lower hurdle because the extra lost month is spread over twelve months, not six.
We have not quoted current T-bill yields here because they change at every auction. The latest cut-off yields are on the MAS website. Compare them with the table before applying.
A worked example
Take $50,000 of OA savings and a six-month T-bill at a hypothetical cut-off yield of 3.0%, with seven months of OA interest lost.
- T-bill return: $50,000 x 3.0% x 182/365 = about $748. You pay about $49,252 and receive $50,000 at maturity.
- OA interest given up: $49,252 x 2.5% x 7/12 = about $718.
- Gain before fees: about $30.
At a hypothetical 2.8%, the same sum loses about $21 against the OA. At 3.2%, it gains about $80.
The hypothetical yields are for illustration and are not forecasts. Our OA versus invest calculator lets you enter the actual yield and dates.
Fees and Fixed Deposits
CPF Board’s list of typical charges, last updated in March 2022, shows agent bank charges of up to $2.50 per transaction and $2 per counter per quarter for T-bills and government bonds, before GST. Check your bank’s current schedule.
A few dollars is trivial on $100,000. On $10,000 it can erase the gain. In the example above, fees of about $7 would take roughly a quarter of the $30.
Fixed deposits under CPFIS follow the same logic. The bank’s rate must beat 2.5% after allowing for the months of OA interest lost at the start and end, plus any charges. A 12-month deposit that costs 13 months of OA interest needs to pay about 2.71% to break even, on simple interest and before fees. Early withdrawal may bring penalties.
The short version: OA money earns a guaranteed 2.5%. A six-month T-bill usually needs to yield about 2.9% or more to beat it, because you lose about seven months of OA interest, plus fees.
The Wider CPF Investment Scheme
T-bills and fixed deposits are the low-risk end of CPFIS. Unit trusts, exchange-traded funds and shares offer potentially higher, non-guaranteed returns. Their value can fall as well as rise, and losses come out of your retirement and housing savings.
Costs matter more here. CPF Board lists wrap fees capped at 0.4% a year, fund expense ratios capped between 0.35% and 1.75% a year by risk category, and brokerage on exchange-traded products.
Profits stay inside CPF. They return to your OA and follow the usual CPF rules.
One development to watch: Budget 2026 announced a new voluntary life-cycle investment scheme, to be introduced by the first half of 2028, for members who prefer not to manage investments actively. Details are still to come.
For how the 2.5% floor compares with rising prices, see the OA rate versus inflation. For T-bills bought with cash, see T-bills, Savings Bonds and fixed deposits compared. Our guide to CPF strategies by age shows where investing OA savings sits among the other moves.
What To Do Next
- Check how much of your OA is above $20,000. Only that part can be invested.
- Look up the latest T-bill cut-off yield on the MAS website and compare it with the break-even table.
- Count the calendar months your money will be out of the OA, from deduction to the month after it returns.
- Ask your agent bank about its CPFIS charges and how maturity proceeds get back to your OA.
- If you need the OA for a home purchase soon, check that the maturity date falls well before you need the funds.
