Why I’ve decided to invest my CPF-OA now
Ever since our government announced that the CPF Special Account (SA) would be closed, I’ve been thinking hard about how to invest my CPF funds for higher returns.
It now makes little sense to continue transferring funds from my Ordinary Account (OA) to my SA; now that the closure (from age 55) will see all SA savings transferred to the Retirement Account (RA) up to the Full Retirement Sum (FRS), and any remaining savings returned to the OA.
And at that age, my remaining investment horizon and risk appetite will be significantly lower.
Having my money earn just 2.5% per annum – barely beating inflation – does not sound like a good plan to me. Hence, I started investing my CPF-OA monies this year.
This article documents my thought process and reasoning, and I hope it helps any of you who are wondering if you should start to invest your CPF too.
Buying the S&P 500 with my CPF-OA
Since my CPF-OA funds are illiquid and cannot be withdrawn until I turn 55, this means I have a long investment runway ahead of me.
Considering how my CPF-OA investible money is not nearly as significant as my own cash investments, I decided that the best way forward would be to invest in a diversified fund, and ideally one requiring minimal effort. I wanted an investment that I can just “buy and forget” , rather than volatile stocks that I need to keep monitoring in case the markets turn volatile.
So I decided to invest in the Amundi Prime USA Fund.
If you’ve never heard of it before, it is essentially the lowest cost unit trust that provides access to S&P 500 returns. As retail investors, we can use our CPF-OA and/or SRS monies to invest in it, easily beating the 2.5% and 0.05% p.a. respective returns we’d otherwise earn.
About the Amundi Prime USA FundThe fund is managed by Amundi, recognised globally as one of the largest passive managers in the industry.
It tracks the Solactive GBS United States Large & Mid Cap Index, which has historically exhibited high correlation to the S&P 500 Index. The fund has also shown that it is able to track the index closely and accurately ever since its inception in January 2020.
Amundi charges an incredibly low expense ratio of just 0.05% p.a. for this fund. This is significantly lower than many other unit trusts and mutual funds, and is even lower than the popular S&P 500 ETF CSPX favoured by non-US investors.
When it comes to investing one’s CPF, most people today either use a robo platform or go through their bank. This particular Amundi fund can only be found on limited platforms, meaning you won’t be able to buy it through your usual fintech brokerage or any other local robo-advisory platform either.
Yet, I was not keen on either method, because they would mean having to accept higher fees. With robo-advisory platforms, in particular, there are recurring fees to be paid as your portfolio size grows bigger and even in years of inactivity.
Instead, I wanted a way to invest that would provide me with:
- Low fees
- No recurring platform fees
- No incremental fees as my portfolio grows
- No charges for simply holding my investments without transactions
- Access to a local helpline or support desk familiar with CPF investing
So when a fellow investor friend told me that she was switching to POEMS for her CPF investments, I realised my wishes have finally been answered.
Imagine my shock when I saw that I could buy the Amundi Prime USA Fund on POEMS with no platform charges, no sales fees, and no additional costs beyond what is already in the fund’s Net Asset Value (NAV)… let’s just say I nearly fell off my chair.
That’s when I decided to swoop in during April’s Liberation Day crash and deployed the majority of my investible CPF-OA funds into buying the Amundi Prime USA Fund in SGD, to take advantage of the dip in the S&P 500.
What’s more, since the unit trust is traded in SGD, I don’t have to worry about forex spreads due to exchange rate fluctuations each time I buy or sell. My entire portfolio tracking and calculation is based in SGD, rather than having to convert multiple times at the point of purchase and sale.
Why POEMS is the best, low-cost broker for CPF investments
If you’re looking to invest your CPF or SRS into the S&P 500 or globally diversified funds, then you may want to check out the Amundi Prime USA Fund and Amundi Index MSCI World Fund, which offers the cheapest and most diversified exposure in its class.
And since POEMS does not charge any fees for unit trusts investments, this can translate into significant cost savings over an investor’s lifetime.
If you’re like me, and intend to invest your CPF (or SRS) monies over 10 years or more, then saving on these fees really should matter to you.
It might sound too good to be true, and perhaps you’re just like me, wondering…what’s the catch?
I reached out to POEMS’ management to ask them, and here’s their answer:
Zero fees? What’s the catch?
POEMS: "We’ve been serving investors in Singapore for many years, and our mission remains to make investing accessible to as many people as possible. We decided to offer this for free because we want more users to experience the POEMS Mobile 3 platform — a significant upgrade from the legacy systems that the older generation was familiar with."
Aside from zero fees on all unit trusts, POEMS also provides easy access to a variety of international markets (see list here), including the popular Ireland-domiciled ETFs that many non-US investors prefer.
If you’re opening a POEMS account for the first time, you can download the POEMS Mobile 3 App and register with your SingPass.
Step 1: Select your account type
- I recommend opening both accounts so that you have access to both low-cost trading as well as CDP linkage.
- Otherwise, select the Cash Plus Account if you only want to invest your CPF and are happy not owning any of your Singapore stocks in your own CDP account.
Step 2: Choose your desired facilities
Make sure you tick all of the below checkboxes if you want to get your welcome bonuses! (Psst, having access doesn’t mean you have to use them all)
Step 3: Transfer at least $3,000 into your Cash Plus Account to qualify for the welcome gifts here.
Use PayNow to transfer almost instantaneously with no fees.
Current promotion: You can receive $50 to $150 worth of Amazon / Microsoft shares once you fulfil the (easy) criteria!
Note: If you’re buying a CPF investment like me, the funds will be deducted from your CPF-IA agent bank rather than your cash funds. However, you will still need to pre-fund the account, otherwise you run the risk of a failed transaction in the event that your balance is insufficient.As for any unused cash, it will continue to earn POEMS’ Smart Park rates unless you want to withdraw it via PayNow, in which case you’ll receive it within 0–1 working days.
Pro Tip: Check and ensure your CPA-OA has enough funds (in excess of $20,000) for the deduction, otherwise, the transaction will fail and you will still be charged processing fees by your bank!
Step 4: Tap on Trade > UT > Search for your desired fund
Here’s a screenshot of how it looks on my POEMS Mobile 3 app when I try to buy more units of Amundi Prime USA or Amundi MSCI World Fund.
Click Buy/Sell, enter your amount, and choose CPF for your fund source.
If you’re buying on your desktop web login instead, click on Trade > Unit Trust > type “Amundi” in the search bar and you should find it.
Step 5: Sit back and let POEMS handle the rest!
With that, you’ve successfully transacted your CPF investment and POEMS will liaise with your bank for the rest.
Q: How much fees can I expect to be charged?
While POEMS does not charge anything for CPF investments in unit trusts, you will still need to pay agent bank fees for executing the service.
I’ve consolidated the applicable fees below – note that these apply regardless of your choice of brokerage.
| Bank | Application fee per transaction for 1,000 units of Shares / ETFs / Unit Trusts / Government Bonds | Service charge (per counter, per quarter) | Minimum service fee |
| DBS | $2.73 (max $27.25) | $2.18 | $5.45 |
| OCBC | $2.73 (max $27.25) | $2.18 | $0 |
| UOB | $2.18 (max $21.80) | $2.18 | $0 |
Q: Why open both account types?
The POEMS Cash Plus account is a pre-funded custodian account. This means you will need to ensure you have the cash ready before executing the trades, and ownership is managed on your behalf.
- As all foreign assets are held in custody (this applies across all brokers in Singapore), custody fees for foreign market counters apply; e.g. $2 per counter per month for CSPX.
- Get this waived off if your total assets invested via POEMS exceed $250,000.
Because POEMS Cash Plus charges lower commission rates for access to both Singapore and overseas markets, you’ll definitely want to have this account ready to strike when market opportunities arise.
That’s how I managed to catch April’s bottom – a feat that wouldn’t have been possible if I had waited for the crash to come before opening my account.
Pro Tip: Avoid custodian fees by making at least 6 trades per quarter.
The POEMS Cash Management account allows you to buy first and pay later, while also enjoying direct CDP ownership.
If you’re a Singapore investor, I strongly recommend opening the Cash Management Account as well because it comes in handy for local investments that you’d want to keep under your own name in the CDP. This also means you don’t pay CDP fees even during inactive quarters, just like me!
For first-time CPF investors:
Before you can invest your CPF monies through POEMS, you will first need to:
- Open a CPF Investment Account (CPF-IA) with an authorised agent bank (i.e. DBS/OCBC/UOB).
- Complete the Self-Awareness Questionnaire (SAQ) on the CPF website.
- Link your CPF-IA to your chosen brokerage account (e.g. POEMS) for funds deduction.
- Execute your trade on your brokerage and select CPF as the source of funds deduction.
To obtain your CPF-IA number, log in to your CPF portal and click on my CPF > Investment.
The red block below is where you can retrieve your CPF Investment Account number with your selected agent bank. This is the number you link into POEMS.
You’ll have to login to your POEMS account and click on My Settings > My Account > Bank A/C Information, where you can key in your details to complete the link.
For experienced CPF investors:
If you’ve already invested your CPF with another brokerage, the good news is that you’re not limited to using just one broker. You can switch or rotate between several brokerages depending on platform access and fees.
To enjoy zero fees when investing your CPF funds through POEMS (like I did), you can jump straight to Step 3 and link your CPF-IA before executing your purchase order.
Beyond the first trade, if you prefer to automate your CPF-OA purchases and apply dollar-cost averaging, you can set up a Regular Savings Plan (RSP) on POEMS. This will automatically purchase fund units on the 7th of each month on your behalf.
If you prefer to have POEMS invest on your behalf regularly, you can set up a recurring CPF investment on POEMS in two ways.
Either click on “RSP” (instead of the “Buy” icon) on your preferred fund page itself, or head back to the Homepage, click on RSP, and set your preferred amount, frequency and fund source.
Make sure you check that your CPF has enough fees to avoid failed transaction processing costs charged by your bank!
In this day and age, retail investors like us are spoilt for choice, as various brokerages compete for our attention and business.
I’ll admit that although I’ve had a POEMS account for years, I stopped using it when I switched to the new-age digital fintech brokerages in recent years. However, over the years, the limitations of these platforms became clearer to me:
- Limited market access – usually only the US, Hong Kong and Singapore included
- No CDP linkage – you can’t hold your Singapore investments under your own CDP account
In response, POEMS has stepped up their game, becoming a brokerage that can compete head-to-head with these newer players, offering features that many of them still don’t.
To top it off, when it comes to investing my CPF, POEMS is hands-down the BEST option I’ve found.
No other brokerage (or robo-advisors) comes close in terms of fees.
More importantly, aside from its low trading fees, I also do not have to worry about paying any recurring platform fees or dividend handling fees.
When it comes to a long-term investment like CPF, keeping your fees low is crucial; that’s where POEMS truly shines.
Some of you may find that the platform interface takes a bit of getting used to, which is why I’ve included the step-by-step screenshots above to help guide you. The first time I executed my trade, it felt unfamiliar, but from the second trade onwards, it was much easier as I could navigate my way around now.
As the pioneer of online share trading in Singapore, POEMS also provides the benefit of local support centres all around Singapore as well as responsive contact helplines. No other broker offers such customer-centric support, where you can simply call in or walk in for assistance.
POEMS may be more popular among the older generation of investors, but have not been as aggressive in marketing themselves to the younger crowd. With this article, I hope that starts to change as you discover what makes POEMS the best for you.
Need help signing up for your POEMS account and making sure you get your sign-up reward bonuses?
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Disclosure: This article was written in partnership with POEMS to ensure accuracy, whom I reached out to after successfully making my first CPF investment via their brokerage. All opinions are that of my own, based on my tradng experience with POEMS. Please feel free to click on my affiliate links if you’ll like to sign up for an account! T&Cs apply.Nothing in this article is meant to be taken as financial advice, nor a buy/sell recommendation of the Amundi funds mentioned. Investment involves risk. All data is accurate at time of publishing.
Disclaimer: This advertisement has not been reviewed by the Monetary Authority of Singapore.
