CPF interest rates to remain unchanged until end of next year

CPF interest rates to remain unchanged until end of next year

SINGAPORE: Central Provident Fund (CPF) members will continue to receive a minimum 4 per cent interest on their Special, Medisave and Retirement accounts until Dec 31 next year, the CPF Board and the Housing and Development Board (HDB) said in a joint press release on Thursday (Sep 27). 

"In view of the continuing low interest rate environment, the Government has decided to further extend the 4 per cent floor rate for interest earned on all Special, Medisave and Retirement Account (SMRA) monies for another year until 31 December 2019," the press release stated. 

From Oct 1 to Dec 31 this year, CPF members will continue to earn interest rates of up to 3.5 per cent per annum on their Ordinary Account, and up to 5 per cent per annum on their Special and Medisave accounts. 

These interest rates include an additional 1 per cent interest paid on the first S$60,000 of their combined balances - part of the Government's efforts to enhance the retirement savings of CPF members, the authorities said.  

CPF members aged 55 and above will also earn an additional 1 per cent interest on the first S$30,000 of their combined balances. This is paid over and above the current extra 1 per cent interest that is earned on the first S$60,000 of their combined balances. This means that CPF members aged 55 and above will earn up to 6 per cent interest per year on their retirement balances.

The extra interest received on the Ordinary Account will go into the members' Special Account or Retirement Account. If a member is above 55 years old and participates in the CPF LIFE scheme, the extra interest will still be earned on his or her combined balances, which includes the savings used for CPF LIFE.

READ: Commentary - Saving too little, starting too late, do we have enough for retirement?

The Ordinary Account interest rate will be maintained at 2.5 per cent per annum from Oct 1 to Dec 31 this year as the computed rate of 0.32 per cent is lower than the legislated minimum interest rate. 

Meanwhile, the interest rate on Special and Medisave Accounts will remain at 4 per cent per annum in this last quarter as the computed rate of 3.28 per cent is lower than the current floor interest rate of 4 per cent per annum. 

The concessionary interest rates for HDB mortgage loans, which is pegged at 0.1 per cent above the Ordinary Account interest rate, will remain unchanged at 2.6 per cent per annum over the same period. 

The Retirement Account interest rate will be maintained at 4 per cent per annum till Dec 31, 2018. 

Source: CNA/hs(ra)

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