The CPF Ordinary Account (CPF OA) pays a guaranteed 2.5% a year, while the SPDR Straits Times Index ETF (SGX: ES3) has returned 8.59% a year since 2002 and 11.03% a year over the last 10 years, with no guarantee at all.

Over 20 years, the ETF has the better track record. The CPF OA is the only one of the two that cannot lose money.

On S$10,000 left alone for 20 years, the OA grows to about S$16,386 at 2.5%, or about S$19,898 on the first S$20,000 once the 1% extra interest is counted. The same S$10,000 at a 6% market return becomes about S$32,071, and at 8% about S$46,610.

Here is the catch most comparisons skip: if you invest your OA through the CPF Investment Scheme, your hurdle is not zero. It is the OA interest you gave up.

From 1 October to 31 December 2026, the CPF Board pays 2.5% a year on the Ordinary Account and 4% a year on the Special, MediSave and Retirement Accounts. On top of that, the government pays extra interest on your first S$60,000 of combined balances.

In plain terms, if you are under 55, the first S$20,000 in your OA works out to roughly 3.5% a year, as long as it sits inside your first S$60,000 of combined balances. Everything above S$20,000 earns the base 2.5%. That is the real benchmark an ETF has to beat.

ES3 tracks the Straits Times Index, the 30 largest counters on the SGX. The other big STI tracker, G3B, follows the same index, so the maths below applies to both.

Here are the annualised numbers on the SSGA fund page, as at 30 September 2026.

The fund charges an expense ratio of 0.28% a year, holds 30 stocks, and showed a dividend yield of 3.24% as at 16 October 2026. Distributions are semi-annual. Notice the small, steady gap between ES3 and the index in every row. That gap is the cost of owning the fund.

Now the uncomfortable part, and I would rather say it plainly than bury it. The 36.48% one-year figure is the number that makes everyone feel like a genius, and it is the one I would not project forward. The 8.59% since 2002 is the more honest anchor because it includes 2008, 2020 and the long flat stretches in between. Even that is a look backwards, not a promise.

I ran a simple projection with a constant return, annual compounding, and no fees or tax. Real markets do not move in a straight line, so treat these as a guide, not a forecast.

Most of us do not have a lump sum. So here is S$500 a month for 20 years, S$120,000 of your own money in total.

At 8%, the monthly plan ends at nearly twice the 2.5% result. Sequence matters too. If the market fell 30% in year one and then returned 7% a year for the next 19, the S$10,000 would still reach about S$25,300, well above the OA path. A bad start hurts, but 20 years gives it time to heal. The real risk is needing the money during the bad stretch.

Yes, through the CPF Investment Scheme (CPFIS), but with rules. Based on the CPF Board's page, these are the ones that matter:

You also need a broker that supports CPFIS. I compared the options in my guide to the best online brokers in Singapore.

Now the part that changes the maths. As I understand the rule, when you sell, the proceeds go back to your OA, and what you withdrew plus the OA interest it would have earned has to be restored before any gain is truly yours. So an ETF that returns 2.5% over a stretch has left you exactly where the OA would have, minus brokerage and fund costs. Your real hurdle is the OA rate, not zero.

The row that matters most is capital risk. Everything else is a trade-off you can price. That one is a trade-off you have to be able to sit through.

My table uses a handful of return rates. Your situation has its own numbers: your age, your OA balance, your monthly top-up, and whether you will need the money for a home. An AI assistant is good at running these variations quickly, as long as you give it clear inputs and check the maths.

Two prompts I would start with:

Always re-check the output against a spreadsheet or the tables above. If you want a full set of ready-made prompts like these, I put them in the free AI Prompts for Investor Handbook.

Receive bite-sized market updates and actionable stock ideas - so you stay informed without spending hours researching.

On history, the ETF grows faster. On certainty, the OA wins. Those are different jobs, so I think the better question is what each dollar is for. Money you will need for a flat down payment in the next few years has a job that a market drop can break. Money you will not touch for 15 or 20 years has a job that a market drop can only delay.

Personally, I find it helpful to split the OA mentally. The first S$20,000 is the part CPFIS makes you keep anyway, and it earns the extra interest. What sits above that is where the ETF question really lives. If you already hold dividend counters or want income, my guide to the best SGX dividend stocks in 2026 is a useful companion read. None of this is personal advice. Your age, home plans and risk comfort change the answer.

What I would watch: the next quarterly CPF rate announcement, and how I feel when a screen is red, not just when it is green.

It depends on the job. The OA gives a guaranteed 2.5%, while the STI ETF has historically returned more, with the risk of loss. Over long periods the ETF has grown faster, but the OA is the only one that cannot fall.

The OA pays 2.5% a year from 1 October to 31 December 2026. If you are under 55, extra interest of 1% applies on your first S$60,000 of combined balances, with the OA portion counting up to S$20,000.

Yes, through the CPF Investment Scheme, if you are 18 or older and keep S$20,000 in your OA. Check the CPF Board's included list to confirm the specific ETF qualifies before you invest.

Only the amount above S$20,000 is investible. Of that investible amount, up to 35% can go into stocks and up to 10% into gold.

At 2.5% a year it grows to about S$16,386. If it earns about 3.5% with the extra interest, it reaches about S$19,898. Both assume annual compounding and no change in rates.

The SSGA fund page shows 11.03% a year over 10 years and 8.59% a year since April 2002, as at 30 September 2026. Past performance does not guarantee future returns.

Yes. Units of an ETF can fall in value, and the OA's guarantee no longer applies to the money you invest. You also need to recover the OA interest foregone before you are truly ahead.

Extra interest is paid on your combined balances in the CPF accounts. Money you have invested is no longer in the account, so it stops counting. Check your CPF statement to see exactly what is being credited.

That is a personal call. If you will need the money for a down payment or mortgage soon, the certainty of the OA matters more. If your horizon is long, the ETF's growth may matter more.

The CPF OA gives you something rare: a guaranteed return with no decisions to make. The STI ETF gives you a good chance of a higher return over 20 years, which history supports, and which no one can promise.

The open question is not which line ends higher on a chart. It is whether you can hold through a deep fall without needing the money, and whether the OA interest you give up is worth the extra risk for your situation.

Before you move any OA money, run your own numbers with your own balance and timeline, and confirm the ETF is on the CPF Board's included list. Revisit the maths each time the quarterly rate changes.

Join our community for more insights:
https://investkaki.com/community