Some of you may remember a post I wrote back in 2021 about treating my CPF OA as a savings account. Back then, I was topping up my CPF Ordinary Account via the Voluntary Housing Refund (VHR) to enjoy the guaranteed 2.5% interest rather than using cash for my home purchase.
Fast forward to 2026 and I find myself revisiting the same strategy. Here are the reasons why.
But First: What Is the Voluntary Housing Refund (VHR)?
When you use your CPF OA to pay for your home, the amount withdrawn accrues an interest charge of 2.5% per year. This has to be returned to your CPF when you eventually sell the property.
The VHR lets you voluntarily refund cash back into your OA, up to the total amount withdrawn including accrued interest. There is no penalty and you can do it anytime, in any amount, via the CPF website or myCPF app under "Make a Housing Refund with Cash". The money goes back into your OA and starts earning 2.5% interest again.
Reasons Why I am Doing VHR now
My home loan was on a 1.5% fixed rate package for the past five years. It just came up for repricing and after reviewing the options, I locked in a new 1.68% fixed rate for the next two years.
Since the rate is still lower than CPF OA 2.5%, I decided to use some of my spare cash, and do a Voluntary Housing Refund (VHR) back to my OA. Rather than using spare cash to make repayments on the loan, I am doing the opposite.
I am using the VHR to park that cash in the OA, where it earns more than the loan costs me and I am pocketing a risk-free spread of 0.82% on every dollar I put back via VHR. At the same time, I reduce my accrued housing interest liability, my OA balance grows at 2.5%, and the net position is better than simply prepaying the mortgage.
Reason 2: Savings account, T-bill and Singapore Savings Bond have fallen and OA now competes well
When interest rates were elevated in 2023 and 2024, VHR made less sense even for people with low-rate mortgages. T-bills and fixed deposits were giving 3.5% to 4% or more, so there were better homes for idle cash outside of CPF.
That has changed. Savings account rates have come down quite a bit. My DBS Multiplier is now giving me around 1.8% to 2.2% depending on whether I meet all the transaction categories that month. T-bill yields have also dropped significantly.
So the comparison now looks like this:
| Option | Rate |
|---|---|
| My housing loan (cost) | 1.68% |
| CPF OA via VHR (guaranteed) | 2.50% |
| DBS Multiplier (conditional) | ~1.8% to 2.2% |
| T-bills/SSB | ~2.0% |
Reason 3: The OA doubles as an optionable investment reserve
Besides earning 2.5%, the money sitting in my OA can also be deployed into global index funds via the CPF Investment Scheme (CPFIS) when the market presents a genuine opportunity. Through platforms like Endowus or POEMS, I can invest my OA into low-cost global index funds which tracks global developed markets at a very low cost.
Or if the interest rate were to spike up due to inflation, I also have the option to invest my OA to T-bills at higher interest rate similarly to what I had done before here
The way I see it, the OA money has two modes.
Mode 1: Safe Mode. The market is fairly valued or expensive. Money sits in OA earning 2.5% guaranteed while the arbitrage quietly does its work. Happy to wait.
Mode 2: Deploy Mode. The market corrects meaningfully and presents a good risk-reward opportunity. I switch some of the OA money into a global index fund via Endowus or POEMS to capture the upside.
A Few Things to Keep in Mind Before You Do This
VHR is capped at what you have withdrawn for housing. You cannot top up unlimited amounts into your OA via VHR. The refund amount is capped at the total principal withdrawn plus accrued interest. Check your CPF statement to see your eligible refund amount.
The OA money is significantly more restricted than cash when it comes to investing. You can only invest in CPF approved financial product via their approved platform. Furthermore that are also charges from the agent bank when you invest.
The Money you you put into your OV via VHR is not reversible. You are unable to withdraw the VHR money in your OA until you reach 55 if you have Full Retirement Sum in your SA. Otherwise, it will form part of your RA and you will only see it as your monthly retirement payout after 65.
Are you doing anything similar with your OA? Or are you keeping everything as cash given the current market uncertainty? Would love to hear your thoughts in the comments below.
Happy CPFing!
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Reviewed by Valuewarrior
on
May 24, 2026
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