Home News Board: No changes to minimum interest rates until end of 2020

CPF Board: No changes to minimum interest rates until end of 2020

This means that the current rate of four percent, which was supposed to have expired by the end of 2019, for Special, MediSave and Retirement accounts, will be extended by one year, until 2020 ends

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Singapore—In a joint press release from the Central Provident Fund (CPF) Board and the Housing and Development Board (HDB), it was announced on September 20, Friday, that minimum interest rates would remain at the same rate until the end of 2020 “in view of the continuing low interest rate environment.”

This means that the current rate of four percent, which was supposed to have expired by the end of 2019, for Special, MediSave and Retirement accounts, will be extended by one year, until 2020 ends.

The release read, “In view of the continuing low interest rate environment, the Government has further extended the 4% rate floor for interest earned on all Special, MediSave and Retirement Account (SMRA) monies for another year until 31 December 2020.

The Government has committed to providing a 4% rate floor for SMRA interest for two years since 2008, and had subsequently extended the rate floor in light of the global economic conditions and the fact that interest rates had been exceptionally low. The current 4% rate floor is due to expire on 31 December 2019.”

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CPF members will keep on earning interest rates of as much as 3.5 percent for Ordinary accounts, and as much as five percent for the Special and MediSave accounts.

The release also says these interest rates include an additional one percent interest on the first S$60,000 of a member’s combined balances (with up to S$20,000 from the OA) that forms part of the Government’s endeavours to further support retirement savings of CPF members.

CPF members who are 55 and older will also be earning another one percent interest on the first S$30,000 of their combined balances. According to the release, “This is paid over and above the current extra 1% interest that is earned on the first $60,000 of their combined balances. As a result, members aged 55 and above will earn up to 6% interest per year on their retirement balances.”

This extra interest on the Ordinary Account go either to the Special Account (SA) or Retirement Account (RA) for the enhancement of retirement savings. Furthermore, members 55 and older who are part of the CPF LIFE scheme will have the extra interest earned on their combined balances, including savings used for CPF LIFE.

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As for the interest rate for the CPF Ordinary Account, the interest rate will stay at 2.5 percent per year from October 1, 2019, to December 31, 2019. And the HDB Mortgage Rate will also stay at its current rate at  2.6 percent per year from October 1, 2019, to December 31, 2019.

For Special and MediSave Accounts, the interest rate will remain at four percent per year from October 1, 2019, to December 31, 2019.

For the interest rate for Retirement Accounts, it will remain at four percent per year from January 1, 2019 to December 31, 2019, as previously announced on September 27, 2018.

If they have any questions regarding these new announcements, CPF members may visit cpf.gov.sg or call the CPF Call Centre at 1800-227-1188./ TISG

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Read related:Reform Party promises to return CPF at age 55 and make CPF savings voluntary if elected into Parliament

Reform Party promises to return CPF at age 55 and make CPF savings voluntary if elected into Parliament

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