Concept
CPF Accrued Interest
CPF accrued interest is the interest your CPF OA did not earn because you used the money for a property, which you must refund on sale.
Why you have to refund it
When you use CPF Ordinary Account money for a downpayment or monthly instalments, that money leaves your CPF and stops earning the 2.5% a year it would have earned there.
When you sell, CPF requires you to return the principal you withdrew plus the interest it would have earned, compounded over the whole time you owned the property. This keeps your retirement savings whole — but it comes out of your sale proceeds.
Key points
- The refund goes back into your CPF Ordinary Account, not your pocket — it is not cash proceeds.
- It compounds. On S$180,000 used over ten years the accrued interest can be S$40,000 or more.
- If the sale proceeds after the loan cannot cover the full refund, you do not top up the shortfall in cash for a market-value sale — but that shortfall is not credited to your CPF either.
Frequently asked questions
What is CPF accrued interest?
It is the 2.5% a year that CPF money would have earned in your Ordinary Account if you had not used it for a property. When you sell, you refund the principal plus this compounded interest to your CPF.
Does CPF accrued interest come back to me as cash?
No. The principal and accrued interest are credited to your CPF Ordinary Account. You can use it for your next home, but it does not reach your bank account.
What if my sale can't cover the CPF refund?
For a genuine market-value sale you are not required to top up the shortfall in cash, but the unrefunded amount is not added to your CPF either — it is lost.