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Interest Rates
 

Interest Rates

CPF Interest Rates (01 Jul 2014 to 30 Sep 2014)
(reviewed quarterly)
Ordinary Account 2.50% p.a.
Special & Medisave Accounts 4.00% p.a.

 
CPF Interest Rates (01 Jan 2014 to 31 Dec 2014)
(reviewed yearly)
Retirement Account 4.00% p.a.

Note: Special Singapore Government Securities (SSGS) are non-tradable bonds issued specifically to CPF Board, Singapore's national pension fund. Singaporean's CPF monies are invested in these special securities, which are guaranteed by the Government.

Interest Rate for Ordinary Account Monies

For Ordinary Account (OA), CPF members receive a market-related interest rate based on the 12-month fixed deposit and month-end savings rates of the major local banks.

The computed CPF interest rate, derived from the major local banks’ interest rates for the three-month period, February 2014 to April 2014, worked out to be 0.21% per annum. As this is below the legislated minimum of 2.50% per annum, the OA interest rate for 1 July 2014 to 30 September 2014 will remain unchanged at 2.50% per annum.

Interest Rate for Special and Medisave Account Monies

Savings in the Special and Medisave Account (SMA) are invested in SSGS which currently earn either 4% per annum or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is the higher, adjusted quarterly.

The average yield of the 10YSGS plus 1%, from 1 June 2013 to 31 May 2014, works out to be 3.42%, which is lower than the current floor of 4% per annum. Accordingly, the SMA interest rate payable to CPF members from 1 July 2014 to 30 September 2014 will be maintained at the current floor of 4% per annum.

Additional Interest of 1%

As part of the government’s efforts to enhance the retirement savings of CPF members, an additional 1% per annum will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the OA. This works out to be 3.5% per annum earned on the first $20,000 in a member’s OA, and 5% per annum earned on the first $40,000 (up to $60,000 if no OA savings) in a member’s SMA and Retirement Account (RA).

The additional interest received on the OA will go into the member’s Special Account (SA) or RA to enhance his retirement savings. If a member is above 55 years old and participates in the CPF LIFE scheme, the additional 1% per annum interest will still be earned on his combined balances, which includes the savings used for CPF LIFE.

Interest Rate for Retirement Account Monies

New RA savings are invested in SSGS which earn a fixed coupon equal to either the 12-month average yield of the 10YSGS plus 1% at the point of issuance, or 4% per annum, whichever is the higher, adjusted yearly.

Given the lower 10YSGS yield, new RA savings will earn a fixed coupon of 4% (floor rate).

The interest rate to be credited to the RA is the weighted average interest rate of the entire portfolio of these SSGS, and adjusted yearly in January. The weighted average interest of the entire portfolio of these SSGS is 4% at the moment, so the interest rate payable to CPF members on their RA balances from 1 January 2014 to 31 December 2014 is 4% per annum, as announced on 13 December 2013.

Details on how CPF interest rates are computed can be found in News Releases.

Archive

CPF Interest Rates 1955 - 2014 (0.08MB)

 Last Updated on: Monday, July 21, 2014 at 5:33 PM
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