CPF interest rates to remain unchanged until end 2019

Those with Ordinary Accounts will earn interest rates up to 3.5% per annum on their monies until end of Q4 2018.

The Central Provident Fund revealed that it would extend its 4% floor rate for special, MediSave, and retirement account (SMRA) monies until 31 December 2019 amidst the sustained low-interest environment.

The agency noted that savings in the SMRA go into the Special Singapore Government Securities (SSGS) since 1 January 2008. The scheme earns an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%.

“This is a market-based rate for instruments of comparable risk and duration, and will ensure that members receive fair and reasonable interest rates,” they explained.

For CPF members with ordinary accounts, they will continue to earn interest rates up to 3.5% per annum on their Ordinary Account (OA) monies until the end of Q4 2018. Meanwhile, those with Special and MediSave accounts (SMA) monies will see interest rates of up to 5% per annum until the end of Q4 2018.

Also read: 6 in 10 Singaporeans eye financial support from CPF by age 62

“These interest rates include an extra 1% interest paid on the first $60,000 of a member’s combined balances (with up to $20,000 from the OA) which is part of the government’s efforts to enhance the retirement savings of CPF members,” the agency noted.

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

“The extra interest received on the OA will go into the member’s Special Account (SA) or Retirement Account (RA) to enhance his or her retirement savings,” CPF explained. “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.”

For those with OA accounts, interest rates will be unchanged at 2.5% per annum from 1 October 2018 to 31 December 2018, as the computed rate of 0.32% is lower than the legislated minimum interest rate.

M eanwhile, the concessionary interest rate for HDB mortgage loans, which is pegged at 0.1% above the OA interest rate, will remain unchanged at 2.6% per annum from 1 October 2018 to 31 December 2018.

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