Last updated: September 2026 | SeaMoneyTips
Summary
The CPF Investment Scheme (CPFIS) lets you invest your Ordinary Account (OA) and Special Account (SA) savings beyond the basic sum into approved unit trusts, ETFs, shares, and insurance products. In this guide we look at CPFIS returns in 2026 and how they compare with leaving money in CPF or investing through other channels. CPFIS returns vary by the funds you choose, and fees can reduce your net gains.
What Is CPFIS and How Do Returns Work?
CPFIS is a framework from the CPF Board that allows members to invest part of their OA and SA savings into a list of approved investment products. You can read the full list of approved funds and their charges on the official CPFIS page at cpf.gov.sg. The returns you earn from CPFIS depend entirely on the market performance of the funds, ETFs, or shares in your portfolio. A good run in equities can produce double-digit growth in a year, while a weak market can drag your CPFIS balance below what the risk-free CPF interest would have paid.
CPFIS vs CPF Ordinary Interest as a Benchmark
Before CPF introduced the changes in 2025, the first $20,000 of your OA earned an extra 1 percent interest on top of the base 2.5 percent. For money above that, OA earns 2.5 percent and SA earns 4 percent. These risk-free rates are the natural benchmark. Your CPFIS investment needs to beat the guaranteed CPF interest after fees to be worthwhile. Many CPF experts use the OA 2.5 percent as the minimum hurdle rate before they consider moving funds into CPFIS.
CPFIS Returns 2026: What to Expect From Each Asset Class
Your overall CPFIS return in 2026 depends on the mix of asset classes in your approved portfolio. Broadly, equity funds have delivered the highest long-run average returns, followed by balanced funds, and then bond and money market products with the lowest but most stable returns.
Unit Trusts and Equity Funds
Unit trusts that invest in global equities have historically returned around 7 to 9 percent a year over a full market cycle when measured on a USD basis. In an up year, returns can be much higher, but losses of 20 percent or more are possible in a downturn. A well-diversified equity fund remains the most common choice for CPFIS members who want growth over a long horizon of five years or more.
ETFs and Index Funds
Index funds and ETFs are popular because of their low fees. A FTSE- or MSCI-based global index ETF typically charges an expense ratio below 0.3 percent, compared with actively managed unit trusts that can charge 1.5 percent or more. Lower fees mean a larger share of the gross return stays in your account, which matters a lot when compounded over 20 or 30 years.
Insurance Products and Endowment Plans
The CPFIS also permits approved investment-linked insurance products. These tend to offer modest returns that are often below equity funds but above the SA base rate in favorable years. Their high fee structures and long lock-in periods make them less attractive for the typical investor, so review the fees before committing.
How Fees Reduce Your Net CPFIS Return
Fees are the hidden enemy of CPFIS returns. When you invest through CPFIS, you pay several layers of cost: the fund management fee, the sales charge or platform fee, and sometimes an advice fee. If a fund charges 1.5 percent annually and the gross return is 6 percent, your net return is only 4.5 percent. Over 25 years the difference between a 6 percent and a 4.5 percent net return is enormous.
Because CPF money is meant for retirement, choosing low-cost options is especially important. A low-fee global ETF implemented through an approved brokerage usually produces a higher net return than an expensive actively managed fund, even when the active fund has a good gross record.
CPFIS vs Leaving Money in CPF: Which Is Better
There is no single right answer, and the best choice depends on your age, risk tolerance, and investment horizon. For members close to retirement, the guaranteed CPF interest of 2.5 percent on OA and 4 percent on SA is hard to beat with the added risk of CPFIS. For younger members with 20 or more years until retirement, the higher expected returns of a low-cost equity portfolio can be worth the risk.
One of the strongest cases against jumping into CPFIS is the guaranteed floor that CPF provides. The OA rate of 2.5 percent and SA rate of 4 percent are effectively risk-free and guaranteed by the government. Your CPFIS investments have no such floor. Learn how the 1M65 strategy uses the distinction between your safe CPF base and your investment portfolio to manage this trade-off.
CPFIS vs Direct Investing Outside CPF
One recurring question is whether to invest through CPFIS or to invest cash directly outside CPF. Direct cash investing gives you more freedom: you can choose any product, switch brokers when you like, and withdraw money whenever you need it. CPFIS money, by contrast, is largely locked in until retirement or certain eligible withdrawals.
The main trade-off is opportunity cost. Money moved into CPFIS loses the guaranteed CPF interest, but if your investments do well, the upside is larger. Money kept in CPF earns a safe return but cannot grow beyond the fixed rate. Some investors use a blend: keep a large emergency base inside CPF for the guaranteed interest and invest a smaller, longer-horizon slice through CPFIS. To understand how the ordinary account fits in, see our guide to CPF OA investment options.
Historical CPFIS Performance: What the Record Shows
Looking at long-term records, a diversified equity portfolio has historically returned roughly 7 percent a year before fees, which stands above the OA's guaranteed 2.5 percent but still below stock market claims in very strong bubbles. The key lesson from the past two decades is that timing matters less than time in the market. Members who consistently invested over many years tended to come out ahead of those who jumped in and out based on news.
The CPF Board provides the official list of approved funds and their charges. Checking the fund's prospectus for the past performance table is the first step before investing. Past performance is not a guarantee of future results, but it does show how volatile a fund has been, which helps you judge whether you can tolerate the swings.
How to Improve Your CPFIS Returns in 2026
- Favor low-cost index funds. An expense ratio under 0.5 percent is reasonable; treat anything above 1 percent with caution.
- Diversify across regions. Global funds reduce the risk of one country's downturn hurting your whole balance.
- Invest with a long horizon. Only move money into CPFIS that you will not need for at least five years.
- Review fees at least yearly. Switch to a cheaper approved fund if a costly one is underperforming net of fees.
- Keep your CPF base intact. Leave enough in OA and SA to earn the guaranteed interest before taking on market risk.
- OA base interest rate: 2.5 percent, guaranteed by the CPF Board; SA earns 4 percent. Source: cpf.gov.sg.
- Global equity funds historically return around 7 percent a year before fees over full market cycles. Source: widely reported market index data.
- Low-cost global ETFs charge expense ratios below 0.3 percent, versus active unit trusts that often exceed 1 percent.
CPFIS Returns vs Other Investments: Comparison Table
| Strategy | Typical Return Range | Risk | Fees |
|---|---|---|---|
| Keep money in CPF OA (2.5%) | 2.5 percent | Very low | None |
| Keep money in CPF SA (4%) | 4 percent | Very low | None |
| CPFIS global equity fund | 5 to 8 percent | Medium to high | 0.5 to 1.5 percent |
| CPFIS global index ETF | 5 to 7 percent | Medium | Below 0.3 percent |
| Cash investing outside CPF | Varies | Depends on product | Variable |
Frequently Asked Questions
Is the CPFIS worth it in 2026?
CPFIS is worth it mainly for young members with a long time horizon who use low-fee index funds and expect equity returns to beat the guaranteed CPF interest. For those near retirement, the guaranteed CPF rates are usually safer. Run the numbers on fees before deciding.
What is the typical CPFIS return?
There is no fixed CPFIS return because it depends on the funds you choose. A diversified global equity fund has historically returned around 7 percent a year before fees, while bond and money market funds return much less. Net of fees, you can expect less than the gross figures cited in marketing.
Can I lose money in CPFIS?
Yes. CPFIS investments are not guaranteed. Equity funds can fall sharply in a downturn, and your balance can go below what you would have earned in the risk-free CPF interest. There is no floor protecting your principal.
What beats CPF interest rates?
Over long periods, a diversified low-cost equity portfolio has historically beaten the OA 2.5 percent and SA 4 percent rates. However, this comes with higher risk and no guarantees. Short-term results can easily underperform the fixed CPF rates.
Should I invest from CPF OA or SA?
Most advisers suggest using OA funds because the SA 4 percent guaranteed rate is harder to beat and OA can be used for housing. Investing OA money that you do not need for housing can make sense for a long horizon. You can find guidance on your choices in the article on CPF OA investment options.
Key Takeaways
- CPFIS lets you invest OA and SA savings into approved funds, ETFs, and insurance products, with returns based on market performance.
- Fees are the biggest drag on CPFIS returns, so prioritize low-cost index funds with expense ratios below 0.5 percent.
- Keep a safe CPF base that earns the guaranteed 2.5 percent (OA) and 4 percent (SA) before exposing extra money to market risk.
- A diversified global equity fund has historically returned around 7 percent a year before fees over full market cycles.
- For detailed rules on which products qualify, consult the CPF Board at cpf.gov.sg.
Conclusion
CPFIS returns in 2026 are not a single number but the result of your product choices, fees, and time in the market. For young investors with a long horizon, a low-cost diversified equity portfolio through CPFIS can deliver returns well above the guaranteed CPF interest. For the risk-averse or those near retirement, the safe CPF rates remain a compelling choice. Compare options carefully and always check the official CPF Board website at cpf.gov.sg for the up-to-date list of approved funds before you invest.
This article was written by the SeaMoneyTips Editorial Team, focused on personal finance education for Indonesia and Singapore readers. For inquiries, please contact us.