Introduction

The reason for performing this hack is to get 4% in the CPF Special Account instead of the normal 2.5% in the CPF Ordinary Account. It is also to help those who are not familiar with the steps. Please note that if you have an investment account that allows you to buy CPF-SA approve Bond funds, you can use it as it is not necessary to create a new account just for this CPF Shielding Hack.

Screen Changes

As time passes, sometimes the website screen of FSMOne might change, however, more or less it is about the same, just look for the button for placing orders and then the Buy or Sell buttons.

CPF Special Account

There is a minimum amount of 40,000 that must be kept in your CPF-SA.  Therefore, you can only invest in any amount that is 40,001 and above.  Make sure you check your CPF-SA balances and deduct 40,000 before you click the buy button or the transaction will be rejected.  For myself, I deduct 41,000 and invest the rest.

CPF Shielding Hack, a Step by Step Guide

FSMOne Account

Step 1: Click Place Order

Step 2: Select Fund type

Nikko AM Shenton Short Term Bond Funds SGD

Side note: Why this fund? This is the most commonly recommended fund to buy as it charged the lowest fees, again not necessary to follow if you do not wish to buy this fund as it is an example only, any CPF-SA approve Bond funds will do.  At the point of writing, it was 0.39% for this fund, as fees are subject to changed; do call the platform Customer Service that you are using for the latest fees.

Step 3: Scroll down and input the Buy screen

First check the Fund name is correct

Then Tick Buy

Then Select CPFIS SA

Input 100 (test amount 1 month before doing the actual)

Note: Sometime FSMOne might change the Initial Amount, previously it was 500 SGD.

Check that everything is correct, then click Proceed to Checkout

Tick Disclaimer & Verification

Input your Password

Click Next

Just take note that there is a Fees paid for this transaction.

Then click OK

Finally, you will see the Thank you page that says Transaction was Successful

For the next few days, monitor your CPFIS-SA account to see when the Initial test amount was deducted.  Doing this 1 or 2 weeks ahead before your 55 birthday should be enough time for the transaction to be done. 

Lastly, don’t forget to sell away the fund once your RA was created.

CPF Deduction

I Buy the Fund on 6 Feb and amount was successfully deducted from my CPF Special Account on 8 Feb.

FSMOne Holdings

Although my CPFIS-SA was deducted within 2 days, it requires 5 days before I could see it on my FSMOne account.

This is an email question which I wrote to FSMOne Customer Service and the respond was quite fast.

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Hi Customer Service,

I just bought Nikko AM Shenton Short Term Bond Funds SGD

How to view my CPF special account funds in FSMOne?

Thanks.

—

Thank you for your email. 

Unit trusts buy order required Transaction Date (T) + 4 business days to be complete and reflect into your holding. The cut-off time for Unit Trusts transactions is 3pm on a business day. As you submitted the order on weekend, we will transact on the following business day.

The buy orders will complete and reflect in your holdings by Friday (11 Feb 2022). You may view it in mobile app > Holdings > My holdings > Unit Trusts.

Feel free to contact us if you require further assistance.

Thank you and have a pleasant day.

Regards,
Customer Service | Client Services | FSMOne

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Two Weeks Later

I perform the CPF Shielding Hack using the above Step by Step Guide and 2 weeks later, I lost 0.09 cents, if 100,000, I would have lost SGD 90.  Do expect some losses or gains for those who lucky ones, that’s the facts for all kinds of investment even for bonds fund.

CPF SA Approved Funds

Here are some references of CPFIS-SA approved funds you can buy.   The expense ratio are from FSMOne and this are subject to change at the time of your purchase, do check for the latest rate with your platform customer service.

Eastspring Investments Unit Trusts – Singapore Select Bond Fund Class A (Expense ratio: 0.63%)

LionGlobal Short Duration Bond Fund Class A (SGD) (Dist) (Expense ratio: 0.57%)

Nikko AM Shenton Short Term Bond Funds (Expense ratio: 0.39%)

Schroder Singapore Fixed Income Fund Class A (Expense ratio: 0.69%)

United SGD Fund – Class A (ACC) SGD (Expense ratio: 0.68%)

CPF Retirement Account

On your 55th birthday, check your CPF account balances and you will see that your CPF RA had been created.  So, win or losses, it is time to sell so that you can earn the 4% interest as soon as possible. 

Due to the cost of transaction and bond price movement, I would say that 95% of those doing the CPF Shielding Hack are likely to lose money; that is why it is a requirement that you should not make any withdrawal at least for the FIRST year.

Selling

FSMOne Account

Step 1: Click Place Order

Step 2: Click What Do You Wish To Sell/Switch

Step 3: Tick the Funds you wish to sell.

Then click Add Selected Product(S) to Sell/Switch

Step 4: Scroll down

Till Sell

Redemption method: CPFIS-SA

Till Unit

Till Sell All

Check and if all fine, click Add Product In Cart

Check again that it is back to CPFIS-SA

If checking is ok, click Proceed To Checkout at the bottom

Then the final page for you to check again that it is to CPFIS-SA

Till the Disclaimer and Verification

Enter your Password

Click Next

Finally, click OK to confirm

Well Done!

Good luck and hope you enjoy this CPF Shielding Hack – A Step by Step Guide.

Conclusion

My personal view is that if you wish to do this CPF Shielding Hack, you need to stop yourself from doing any cash withdrawal at least for the 1st year as any withdrawal will start from your CPF Special Account.  Even if you do not suffer any losses, there is an initial Cost of Transaction which is 0.39% for the Bond Fund that I am buying at the time of checking with the customer service.  So 100,000 will cost you 390 x 2 = 780 for buy and sell.   The extra 1.5% interest for the 1st year will need to cover the Cost of Transaction.