Why do we have to return accrued interest for CPF monies used for housing, but not for CPF monies used for investment in CPFIS? - Seedly

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Asked by Anonymous

Asked on 08 Jun 2019

Why do we have to return accrued interest for CPF monies used for housing, but not for CPF monies used for investment in CPFIS?

We know that if we use our CPF OA monies for housing, we will have to return the principal and accrued interest back into our CPF accounts when we sell the house in the future. Why does the same not apply for CPF OA monies used for investments in CPFIS? Why is it that when we sell our CPFIS investments, CPF does not require the principal amount used plus accrued interest to be returned? Isn't the intent to ensure our retirement adequacy is safeguarded by returning what would have earned interest

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Glenn Toh
Glenn Toh, Founder at Whatcard.sg

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Level 4. Prodigy
Updated on 19 Jun 2019

Based on my understanding of the situation, this would be primarily because:

  • for housing, when you sell the house you pay CPF back for whatever you took out of it together with the accrued interest, and you get to keep any remaining value (sale price - money returned to CPF) as cash
  • for CPFIS, all money you invest as well as earn from your investments is returned to CPF - you do not get to withdraw investment profits hence there is no need for them to include any accrued interest, everything stays inside CPF

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