Many people have invested their CPF via CPF Investment Scheme. They have invested through insurance companies, banks, or online fund providers. However, few people realize that besides fund management fees, agent bank charges can rack up a significant amount and reduce your investment return substantially.

The reason is that each fund house whose funds you purchased will individually and separately request monies from your CPF agent bank.

Currently, in Singapore, you can only open a CPF investment account with three local banks, namely, DBS, UOB, and OCBC. The banks will typically charge for the following transactions:

  • Per Buy Transaction – up to $25 per fund
  • Per Sell Transaction – up to $25 per fund
  • Per Fund Switch (This involves a sell transaction followed by a bank transaction – up to $25 per fund
  • Quarterly service charge – $2 per fund

While the individual charges appear small, the total charges can erode your returns significantly, and worse still, they will continue even if you are losing money.

The good news is, you can invest with a CPFIS Registered Investment Administrator (IA). There are only 3 IAs approved by CPF. They are:

  1. iFAST Financial Pte Ltd
  2. Navigator Investment Services Ltd
  3. Phillip Securities Pte Ltd

Take iFast for example, by using an investment administrator, the bank charges are reduced to

  • Per Buy Transaction – $2.50 regardless of the number of units and number of funds
  • Per Sell Transaction – $2.50 regardless of the number of units and number of funds
  • Per Fund Switch  – No agent bank charges incurred
  • Quarterly service charge – $2 regardless of the number of units
  • Furthermore, you enjoy consolidated statement and Faster completion time – CPF transactions are cut by 50%

You can simply transfer your existing CPF Investment portfolio to a CPF investment administrator and enjoy the savings on agent bank charges. Below is an example of how much you can save.

As a licensed independent financial adviser, I help my clients manage their investment portfolios. If you are interested in finding out more about how to invest your CPF, you can request a non-obligatory investment discovery meeting using the form below.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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