I had lunch with a colleague recently. He turned 55 a few months ago and over food, CPF came up. I found out something that surprised me. He had not done a voluntary housing refund (VHR) even though he had already hit his Full Retirement Sum (FRS).
When he turned 55, his FRS was moved from Special Account (SA) to the new Retirement Account (RA). The remaining SA balance went to Ordinary Account (OA) before SA closed, making his OA fully liquid.
His HDB is fully paid, but the CPF OA money he used for his HDB still sits in CPF, accruing 2.5% interest. When he sells his HDB, he has to refund the principal plus all that accrued interest. I shared the idea of doing VHR.
OA as a one way savings bank
Since he hit FRS, his OA acts like a high interest one way savings bank. You can withdraw but not deposit easily. The only way to put money in is via CPF contribution or VHR.
The interest? 2.5% per year. Risk free. Guaranteed. 2.5% is the floor rate since 1999. That beats keeping it in bank account that is giving 0.5 to 1% per year.
The one catch. Withdrawal limits
However, there is one catch. The default CPF withdrawal limit is $2,000 per day, adjustable up to $50,000. If you need more than $50,000, you must apply and collect the amount in person at a CPF Service Centre. Getting a large amount out is not instant. For smaller amounts, you can withdraw online. VHR works best for spare cash you do not need urgently.
When VHR makes sense. Four criteria
In summary, if you meet these four conditions, doing a VHR is worth considering.
First You have turned 55. After 55, your OA above FRS is withdrawable.
Second You have FRS in your RA. Your OA is fully liquid.
Third You have spare cash earning less than 2.5 percent. VHR into your OA earns more.
Fourth You do not need more than $50,000 urgently.
You can do VHR before 55. But the money is locked
Of course you can do VHR before 55 as well. I did a VHR myself before 55 and you can read more about it here. Before 55, the VHR money is not liquid. It sits in your OA and you cannot withdraw it until you turn 55. My spare cash then earned 1.8 to 2% in the bank. By doing a VHR, I moved it to my OA earning 2.5 percent. After I turned 55, that money became withdrawable.
How to do it
You can do VHR easily now with the CPF mobile app. Just download it, log in with your Singpass and go to the Housing section. You can find your loan amount, your accrued interest and also VHR. Just follow the instructions to perform your refund and it gets reflected almost immediately. Do note that CPF interest calculation is based on the lowest balance in the calendar month. So you can perform VHR at the end of the month so it starts earning interest the next month.
Final thoughts
If you meet the four criteria. Turned 55, FRS in RA, spare cash earning less than 2.5 percent, and you do not need more than 50,000 dollars urgently. A VHR is one of the easiest ways to get a guaranteed 2.5 percent return on your cash.
Happy CPFing!
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Reviewed by Valuewarrior
on
August 30, 2026
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