MOM to retain existing computation method for CPF interest payment

The current method provides members with higher interest.

The Ministry of Manpower is not keen to change the computation method of CPF monthly interest.

In a reply to the Parliament, Manpower Minister Tan See Leng said the current method of computing CPF monthly interest payments "already provide CPF members with much higher interest and a greater boost to their CPF savings."

Tan added the computation method should be seen in the context of the CPF system, which does not apply to bank deposits.

"Premature withdrawals from banks’ fixed deposits would, in many cases, result in the forfeiture of the potential interest earned," Tan said.

For the past 20 years, the government has been paying the 2.5% minimum interest on Ordinary Account savings and the 4% floor rate for savings in the Special, MediSave, and Retirement Accounts (SMRA).

"With the SMRA pegged rate currently exceeding the 4% floor rate, CPF members will receive 4.08% per annum interest on their SMRA savings in the first quarter of 2024," Tan explained.

"In addition, the Government continues to pay 1% of extra interest on the first $60,000 of combined CPF balances for all members, as well as an additional 1% extra interest on the first $30,000 of combined CPF balances for members aged 55 and above," Tan added.

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