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The Central Provident Fund (CPF) is a uniquely Singapore social security savings plan that provides working Singaporeans with some financial security in their old age. It consists mainly of three types of accounts:

Ordinary Account - where savings can be used to buy a home, pay for CPF insurance, investment and education.

Special Account - for old age and investment in retirement-related financial products.

Medisave Account - primary savings used for hospitalisation expenses and approved medical insurance.

Your CPF savings earn a minimum risk-free interest of 2.5 percent guaranteed by the Government. There are mainly two ways in which you can invest your CPF money: funds and property investment.

You can use your CPF to help you be a property owner, where the money in your Ordinary Account can be used to buy a property under the CPF housing schemes.

While it used to be quite a given that most Singaporeans take out a HDB home loan, the low bank rates these days could provide you more options. There are many factors that could affect your decision to take out a loan as it is not as simple as looking at interest rates. Each type of loan has its pros and cons and it needs to serve your financial objectives and budget.

You will also need to check if you are eligible for the HDB loans as there are certain restrictions on buyer’s income ceiling and property purchases.

One great advantage of using the HDB loan is that you can use the full amount of your CPF OA account to pay the 10 percent downpayment while a buyer taking out a bank loan need to pay an upfront 20 percent with the first 5 percent without using his CPF money.

Moreover, immediate family members who are co-owners of the property can also cont