Interest rate for CPF Special and MediSave Account up to 4.01% in Q3; first increase since 2008
SINGAPORE: The interest rate for the Central Provident Fund (CPF) Special and MediSave Account (SMA) will increase to 4.01 per cent per annum in the third quarter of this year, up for the first time since the floor rate of 4 per cent was established in 2008.
"This is due to the increase in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), which the SMA interest rate is pegged to," said CPF and the Housing and Development Board (HDB) in a joint news release on Monday (May 29).
CPF members below 55 will continue to earn an extra 1 per cent interest on the first S$60,000 (US$44,400) of their combined balances, capped at $20,000 for the Ordinary Account (OA).
For CPF members aged 55 and above, the government pays an extra 2 per cent interest on the first $30,000 of their combined balances, also capped at S$20,000 for the OA, and an extra 1 per cent on the next S$30,000.
The SMA interest rate will be 4.01 per cent per annum from Jul 1 to Sep 30.
The OA interest rate will remain unchanged at 2.5 per cent for the same period as the pegged OA rate remains below the floor rate.
Meanwhile, 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 for the same period.
For the Retirement Account (RA) interest rate, it will be maintained at 4 per cent from Jan 1 to Dec 31.
The extra interest received in the OA will go into the member's Special Account (SA) or RA, said CFP and HDB.
"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," they said.
They added: "The government is watching the interest rate environment closely to ensure that the CPF interest rate pegs remain relevant in the prevailing operating environment while taking into consideration the longer-term outlook."