SINGAPORE: The minimum interest rate for Central Provident Fund (CPF) accounts will remain unchanged "in view of the continuing low interest rate environment", the board of Singapore's retirement savings scheme announced on Friday (Sep 20).
The prevailing floor of 4 per cent - due to expire at the end of this year - for Special, MediSave and Retirement accounts will be extended to the end of 2020, said the CPF Board in a joint news release with the Housing and Development Board (HDB).
"The Government had committed to providing a 4% rate floor for SMRA interest for two years since 2008, and had subsequently extended the rate floor in light of the global economic conditions and the fact that interest rates had been exceptionally low," said the news release.
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From October to December this year, CPF members will continue to earn interest rates of up to 3.5 per cent on their Ordinary account and up to 5 per cent on their Special and MediSave accounts.
These rates include an extra 1 per cent paid on the first S$60,000 of a member's combined balances - part of the Government's efforts to enhance the retirement savings of CPF members, the authorities said.
Members aged 55 and above will earn another 1 per cent on the first S$30,000 of their combined balances - bringing their earnings to a total of up to 6 per cent on their retirement balances.
The extra interest received on the Ordinary account will go into the Special or Retirement account.
Members above 55 years old who are part of the CPF LIFE scheme will still earn the extra interest on their combined balances, including the savings used for CPF LIFE.
The concessionary interest rate for HDB mortgage loans will remain at 2.6 per cent in the last quarter of 2019. This rate is pegged at 0.1 per cent above the Ordinary account interest rate, which will remain at the legislated minimum of 2.5 per cent - above the computed rate of 0.64 per cent.
The interest rate for Special and MediSave accounts will remain at the legislated minimum of 4 per cent in the same period, above the computed rate of 3.24 per cent.
As previously announced, the Retirement account interest rate will remain at 4 per cent until the end of this year.