Investing in Unit Trusts with CPF Made Easy!

 

Dear all, Your money in Central Provident Fund (CPF) earn a steady 2.5% p.a. in the Ordinary Account (OA) and 4% p.a. in the Special Account (SA). How can you make your CPF money work harder and earn higher interest? Where can you invest them? Read on for a better idea.

What is CPF?

A key pillar of Singapore's social security system, the Central Provident Fund, or CPF helps Singapore Citizens and Permanent Residents set aside their money regularly to build a strong foundation for retirement.  CPF allows you to invest your CPF money under the CPF Investment Scheme (CPFIS). With CPFIS, you can invest your OA and SA savings in a wide range of investments to enhance your retirement savings. One of the options to invest your CPF funds is through POEMS.

CPF Investing on POEMS

How can I start investing with my CPF/SRS savings through POEMS? Here are 3 simple steps for you to kickstart your investment:  Open a CPF Investment account or SRS account with any of the three local banks (DBS, UOB, OCBC) Link your CPFIS/SRS account to your trading account: Log in to POEMS 2.0 > 'My Settings' > 'My Account' > 'Bank A/C Information' Before investing, ensure that you have computed the correct investable amount and have sufficient holdings before making the order submission Please link your CPF or SRS account before 6pm for it to be updated within the same working day.

Here is a list of CPF funds for your consideration: 1. LionGlobal Short Duration Bond Fd Cl A SGD (Dis) 2. Nikko AM Shenton Short Term Bond Fd (S$) 3. UOB United SGD Fund CL A (Acc) 4. First Sentier Bridge Fd A (Semi-Ann Dist) 5. PineBridgeIF - Acorns of Asia Balanced Fund 6. Schroder Multi-Asset Revolution Class A These funds have been selected based on the focus of evergreen balanced/multi-asset funds and short-duration bond funds that are expected to beat CPF-OA's 2.5% interest, with minimal volatility.

With all the knowledge and investment options at your fingertips, you are almost ready to invest! But before you proceed to invest, here are some key factors to consider: 1. Investment Goal Understand the purpose of your investment and set an investment objective (e.g. a long-term goal of growing your savings to $X at the end of 25 years for retirement) 2. Risk Tolerance Assess your risk tolerance. Can you handle temporary short-term losses in your investments? Do you have enough savings to absorb the investment risks?  3. Investment Horizon Consider the duration of your investments. As CPF savings are meant for your retirement, they are generally for long-term purposes, unless you're nearing retirement or have a short-term investment time horizon for other reasons.

Check out a full list of Unit Trust Funds here. Should you have any queries, please contact me at +65 90400848 or email to me at lionellimtp@phillip.com.sg.