CPF Interest to Stagnate at Current Rates for Rest of the Year

Posted on Sep 18 2014 - 6:42pm by Redwire Singapore

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All CPF members will continue to receive 2.5 per cent interest on their Ordinary Account (OA), and 4 per cent interest on their Special, Medisave and Retirement Accounts (SMRA) from Oct 1 to Dec 31 this year.

This was announced today by the CPF Board.

The computed OA interest rate – derived from the major local banks’ interest rates from May to July 2014 – worked out to be 0.21 per cent per annum.

As this was below the legislated minimum of 2.5 per cent per annum, the OA interest rate will be maintained at the minimum amount.

Likewise, the interest rate for the Special and Medisave accounts will be maintained at the current rate of 4 per cent per annum, as the computed interest rate – derived from the 12-month average yield of 10-year Singapore Government Securities plus 1 per cent – worked out to be 3.41 per cent from August 2013 to July 2014, below the floor rate.

The CPF Board says the Government will extend the 4 per cent floor rate for interest earned on all SMRA until Dec 31, 2015.

An additional 1 percentage point of interest will continue to be paid on the first S$60,000 of a CPF member’s combined balances in their Medisave, Special, Retirement and Ordinary Accounts, of which up to S$20,000 can be from the Ordinary Account.

The concessionary interest rate for HDB mortgage loans, which is pegged at 0.1 percentage point above the Ordinary Account interest rate, will remain unchanged at 2.6 per cent per annum from Oct 1 to Dec 31.

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