Minimum 4% interest rates extended for some CPF accounts to end-2024
THE Singapore government has extended the 4 per cent interest rate floor for all Special, MediSave and Retirement Account monies for another year from Jan 1, 2024, to Dec 31, 2024.
The Central Provident Fund Board (CPF) and Housing and Development Board (HDB) said jointly on Thursday (Sep 21) the extension provides certainty for CPF members amid the uncertain interest-rate environment.
Savings in the Special and MediSave Account (SMA) will earn 4.04 per cent interest in the fourth quarter of 2023.
This comes as the SMA pegged rate has exceeded the floor rate of 4 per cent due to the increase in the 12-month average yield of 10-year Singapore Government Securities, which the SMA’s interest rate is pegged to.
The Ordinary Account (OA) interest rate remains unchanged at 2.5 per cent for the same period, as its pegged OA rate remains below the floor rate of the same percentage.
The concessionary interest rate for HDB housing loans, which is pegged at 0.1 per cent above the OA interest rate, also remains unchanged at 2.6 per cent per annum from Oct 1, 2023, to Dec 31, 2023.
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“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.”
As announced last year in November, the Retirement Account interest rate will be maintained at 4 per cent per annum until Dec 31, 2023.
CPF members will continue to earn extra interest on their savings, with an extra 1 per cent interest on the first S$60,000 of their combined balances for members below 55 years old. This is capped at S$20,000 for the OA.
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For CPF members aged 55 and above, the government pays an extra 2 per cent interest on the first S$30,000 of their combined balances – also capped at S$20,000 for the OA – as well as an extra 1 per cent on the next S$30,000.
Extra interest received on the OA will go into the member’s Special or Retirement Account.
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.
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