Martin Lee @ Sg
Sharing is Caring!

Increasing the CPF OA Investment Limit for Stocks

Under the rules of the CPF Investment Scheme (CPFIS), we are allowed to invest only 35% of the investible amount in our Ordinary Account (OA) into stocks. 

For example, if you have $100k in your OA balance (with no monies already withdrawn for investment or education), you can only buy stocks up to $35k.

Click here to see an example of the calculation.

Also, the first $20k in our OA cannot be invested into anything at all.

All these restrictions can be a hinderance for the more savvy investor.

Are there any ways that you can allocate more money from your OA into stocks? 

The most obvious is to do it via unit trusts. Unit trusts allow you to invest the balance 65% of your OA (subject to the $20k min) into equities indirectly.

If you are not the type who likes unit trusts, another way is to buy the STI ETF. While the STI ETF is traded as a stock on SGX, it is treated more as a unit trust and does not fall under the 35% stock limit rule.

In the current bear market, there is another way that might not be apparent to many.

How the CPF Investment Agent Bank calculates the stock limit is to look at your investible amount, work out 35% of that, and then deduct the amount you have already utilised for stock investments.

Let’s say someone who had $100k in his OA had already utilised $35k for stocks. This leaves him with $0 in his stock limit. Due to the current bear market, his current stocks are only worth $15k. If he sells off all his stock holdings, his CPF Investment Account will be credited with $15k but his stock limit will be back up to $35k (upon recalculation by the CPF Investment Agent Bank).

This means if he still has cash balance in his OA, he can actually buy stocks up to $35k again (using $15k in his investment account balance and $20k from his OA).

This method works as long as the person reinvests into stocks before the money in his investment account goes back into his CPF OA (there is a 2-months window). Once CPF recomputes the stock limit, it will be slightly lower as the OA balance has decreased.

If you are a person who wants to buy more stocks in the current market, it might be a good time to review your CPF investments now.

Are there any big losers in your CPF stock portfolio that you can sell to increase your stock limit again?

If you do intend to explore this as an option, you should talk to your CPF Investment Agent Bank to work out and confirm the calculations for your stock limits before doing any trades. As the stock limits will need to factor in the cost of commissions and CPF bank fees, you certainly wouldn’t want to put yourself in a situation where you purchase more than your stock limits allow.

Click here to leave a comment.

Leave a Comment:

Phyllis says 11 years ago

Hi Martin,

Do you know whether the ABF SG Bond ETF falls under the 35% stock limit rule?

Thank you


    Martin Lee says 11 years ago

    Dear Phyllis,

    ETFs do not fall under the 35% stock limit.

lioninvestor says 14 years ago


I accidentally deleted your previous comment:

“one more on STI ETF, the procedure is same as buying normal stocks right? but the brokerage firm will request from agent bank to get the funds from CPF, and indicating that the entire 100% investible amount can be used, instead of 35% stock limit.

I am worried that after i execute my trade with broker of say 100,000 STI ETF, knowing my 100% investible is 110,000, they make mistake to ask agent bank/cpf for 35%, and exceed, and i have to pay by cash !!!”

Yes, it’s the same as buying a stock. The backend should be mostly automatic. You can always confirm the trade with your broker to play safe.

savvy says 14 years ago

Sat, Mar 08, 2008
The Straits Times

IS THERE a better way to calculate the limit for CPF investment accounts that will allow smart investors greater leeway?

Let me illustrate using an example of two investors with contrasting fortunes. Both investors, Albert and Bob, started with $100,000 in their Ordinary Account (OA) and a limit of $35,000, that is, 35 per cent of investable savings, under current rules.

Albert suffers a major loss and liquidates his investments. His Ordinary Account shows a balance of $30,000. So, what is his limit, post-loss? It is still $35,000.

Bob, however, is successful and doubles his OA to $200,000. What is his limit, post-gain? Also $35,000.

The limit was introduced to protect members. But as these cases show, it will not help Albert, who can still risk investing until he is CPF-broke. And it penalises smart Bob, who cannot invest more of his profits.

Shouldn’t the formula be changed to allow smart investors like Bob to exploit the opportunity cost that arises from his substantial gains?

Tan Kok Kiam

savvy says 14 years ago

Gee thanks, but according to the article, it is like not possible… duno if its still valid

savvy says 14 years ago

interesting…… does this work for the reverse way i.e. i have 100k and if i made a profit of 100k from my 35k that i have invested, can i sell the stock and my total OA will have 200k, re-calculating this will give me 70k to invest now ?

    lioninvestor says 14 years ago

    Hi Savvy,

    That might work, however, it’s best to double check with CPF or your agent bank.

    Do take note that you need to wait for the money from the investment account to go back to CPF, and for CPF to recalculate the stock limit. This does not take place immediately.

    Also, by doing so, the market value of your stock investment would have dropped from 135k to 70k. This actually reduces your market exposure, not increase it.

Add Your Reply