Why not investing your CPF savings could be a greater risk
The real value of balances in the Ordinary Account has struggled to keep pace with the rising cost of living
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[SINGAPORE] For generations of Singaporeans, the Central Provident Fund (CPF) has been the bedrock of financial security.
Its tiered interest rates – 2.5 per cent for the Ordinary Account (OA) and 4 per cent for the Special Account (SA) – are often regarded as the ultimate “risk-free” benchmark. In a volatile world, the psychological comfort of a government-guaranteed return is hard to overstate.
However, as the financial landscape evolves, a “risk-free” return can ironically become a risk in itself – the risk of falling behind. In the recent past, we have gone through a period of high inflation, and the real value of OA balances has struggled to keep pace with the rising cost of living.
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