CPF interest rates unchanged for Q1 2017

CENTRAL Provident Fund (CPF) members will continue to earn interest rates of up to 3.5 per cent per annum on their Ordinary Account (OA) and up to 5 per cent per annum on their Special and Medisave Accounts in the first quarter of 2017.

In a Tuesday announcement, CPF Board also said members will earn up to 5 per cent per annum on their Retirement Account in 2017. These interest rates include an extra one per cent interest paid on the first S$60,000 of a member's combined balances (with up to S$20,000 from the OA).

This is part of the government's efforts to enhance the retirement savings of CPF members, it said.

In addition, CPF members aged 55 and above will also earn an additional one per cent interest on the first S$30,000 of their combined balances from January 2016.

This is paid over and above the current extra one per cent interest that is earned on the first S$60,000 of their combined balances. As a result, CPF members aged 55 and above will earn up to 6 per cent interest per year on their retirement balances.

CPF Board added that from Jan 1, 2017, for members below 65 years, the Basic Healthcare Sum (BHS) will be raised from S$49,800 to S$52,000.

For members who turn 65 in 2017, their BHS will be fixed at S$52,000, which will not change for the rest of their lives.

For members aged 66 and above in 2017, their cohort BHS has been fixed and will remain unchanged at S$49,800.

BHS is the estimated savings needed for basic subsidised healthcare needs in old age. It is adjusted yearly for members below age 65 to keep pace with growth in Medisave withdrawals.

As for the concessionary interest rate for HDB (Housing & Development Board) mortgage loans, which is pegged at 0.1 per cent above the OA interest rate, this will remain unchanged at 2.6 per cent per annum in Q1 2017.