4% interest rate on CPF Special, Medisave and Retirement accounts extended to end-2023
The 4 per cent floor rate for interest earned on all Special, MediSave and Retirement Account (SMRA) monies has been extended for another year until Dec 31, 2023.
In a joint statement on Wednesday, the Housing Board (HDB) and Central Provident Fund (CPF) Board said CPF interest rates have been pegged to market instruments of comparable risk and duration to ensure that members receive fair and reasonable returns.
Since Jan 1, 2008, savings in SMRAs have been invested in Special Singapore Government Securities, which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities, plus 1 per cent.
"While the recent rise in interest rates have led to an increase in the pegged SMRA rates, they remain below the floor rate of 4 per cent," the statement added.
The Government will thus be extending the 4 per cent floor rate on SMRA interest to help CPF members grow their savings consistently, said the agencies.
HDB and CPF Board noted that the SMRA rates will continue to be reviewed regularly and CPF members will earn the higher of the floor or pegged rate.
CPF members below 55 years old will continue to earn interest rates of up to 3.5 per cent per annum on their Ordinary Account (OA) monies, and up to 5 per cent per annum on their Special and MediSave Account (SMA) monies in the last quarter of 2022.
These rates include an extra 1 per cent interest on the first $60,000 of their combined balances (capped at $20,000 for OA).
For members aged 55 and above, an extra 2 per cent interest will be paid on the first $30,000 of their combined balances (capped at $20,000 for OA), and an extra 1 per cent interest on the next $30,000.
This means that they will earn up to 6 per cent interest per annum on their retirement balances.
The extra interest paid to CPF members is part of the Government's efforts to enhance the retirement savings of CPF members, said the agencies.
The extra interest received on the OA will go into the member's Special Account (SA) or Retirement Account (RA).
If a member is above 55 years old and participates in the CPF LIFE scheme, the extra interest will still be earned on his combined balances, which includes the savings used for CPF LIFE.
The OA interest rate will be maintained at 2.5 per cent per annum from Oct 1, 2022 to Dec 31, 2022.
Correspondingly, the concessionary interest rate for HDB housing loans, which is pegged at 0.1 per cent above the OA interest rate, will remain unchanged at 2.6 per cent per annum from Oct 1, 2022 to Dec 31, 2022.
The SMA interest rate will be maintained at 4 per cent per annum from Oct 1, 2022 to Dec 31, 2022 while the RA interest rate will be maintained at 4 per cent per annum from Jan 1, 2022 to Dec 31, 2022.
CPF members who have further inquiries may visit cpf.gov.sg or contact the CPF Board through cpf.gov.sg/writetous.