CPF For Singapore PR

One huge benefit of getting Singapore PR is the opportunity to start accumulating your CPF savings. The Central Provident Fund or CPF, is a compulsory savings plan for all Singapore PRs and citizens. It covers the needs of Singapore PR and citizens and ensures they have enough money for retirement, healthcare, and to purchase a public housing. A portion of your monthly salary is automatically deducted every month to put into your CPF for this reason

Employers contribute an additional 16-17% of the monthly salary of employees who are PRs into their CPF accounts. CPF contribution not only allows the permanent resident to enjoy tax reliefs but these CPF funds can also be used for selected investments to grow the amount.

What you need to know about CPF as a new Singapore PR
Q:           I have just obtained my Singapore PR status. Do I need to contribute CPF?

A:            CPF contributions are payable from the day you obtain PR status. To help you adjust to the lower take-home pay, both your employer and you will contribute to CPF at graduated rates for the first 2 years of obtaining the PR status.

You and your employer also have the option to jointly apply to CPF Board to contribute at higher rates during this first 2 years of PR status.

While the CPF is “locked” until one turns 55, CPF can be used for large ticket purchases, such as buying property, medical bills, education, and investment in selected funds. Rest assured should you wish to give up your Singapore PR status, your CPF money can be withdrawn.

The CPF contributions made by Singapore PR / Singapore Citizen employees and their employers goes into 4 different accounts:

1) Ordinary Account
For paying for housing, insurance, and education, and is also used for investment purposes

2) Special Account
For savings for old age, and also investment purposes

3) Medisave Account
For medical bills and hospitalisation expenses

4) Retirement Account
Used as a pension for retirees. It’s created only after 55 years old, and combines the remaining savings left in their Ordinary and Special Accounts.

Grow your retirement savings with CPF interest rates
Through compound interest, the interest rates offered by the CPF are very competitive. For those below age 55, your CPF savings earn up to 5% interest per year. Check this out to learn about the attractive interest rates your CPF savings would be earning.

What can MediSave be used for?
While you may know you can use your MediSave for hospitalisation bills, do you know it can also be used for various outpatient screenings and scans when advised by your doctor? These include MRI and CT scans for cancer patients as well as mammograms.

Earn interest with CPF funds
You enjoy risk-free interest on your CPF savings. Please refer to below for the CPF interest rates.

Public Housing Benefits for PR
CPF ensures home ownership rate in Singapore is high, since it ca be used to pay for home purchase, and not rent. How then can a PR buy a HDB flat? A Singaporean Permanent Resident is only allowed to buy a HDB resale flat, not a subsidised flat directly from HDB. CPF members who are eligible to buy flats can use their CPF savings.
A Singapore PR can buy HDB resale flats only as a family with at least another applicant. The other applicant(s) must be the PR’s spouse and children, parents and sibling, or children. Single PRs are ineligible.
Additional conditions for Singapore PR:

  • If you’re unmarried and buying with family members, at least one has to be Singapore PR or citizen
  • If you’re buying as a PR household, all PR occupiers must be Singapore PR for at least 3 years

What grants are available to Singapore PRs buying HDB resale flats?

PR households without any Singapore Citizens are not eligible for grants. To be eligible, your household needs at least 1 Singapore Citizen. See graph below.

If you want to sell your flat as a Singapore PR
You have used your CPF savings for your housing, what happens when you want to sell your flat? Here’s what will happen to your money:

To enjoy the benefits of having CPF savings, the 1st step will be to apply for Singapore PR.
PR hopefuls will have to be extremely sure-footed in the next/first try in their application. Take the preliminary assessment here.

You may also contact us to know more.

You should also check out “Singapore PR Made Easier”

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