SINGAPORE: The Central Provident Fund (CPF) Board, Housing Development Board, and Ministry of Health have announced that the interest rate on the Special, MediSave, and Retirement Accounts (SMRA) will decrease to 4 per cent from January to March 2025, down from the current 4.14 percent.
This adjustment is due to a decline in the 12-month average yield of 10-year Singapore Government Securities, which the SMRA interest rate is pegged to.
The SMRA interest rate is calculated by adding 1 percent to the average yield. According to the CPF website, the average yield from November 2023 to October 2024 is 2.99 percent. This yield was used to compute the SMRA interest rate for the first quarter of 2025, resulting in a figure of 3.99 percent, which is below the floor rate of 4 percent. Consequently, the floor rate of 4 percent will apply during this period.
Changes in healthcare sum and extra interest rates
In addition to the interest rate adjustment, the Basic Healthcare Sum has been set at $75,500 in 2025 for those below the age of 65, up from $71,500 in 2024.
This sum is the estimated savings needed for basic subsidized healthcare needs in old age and is adjusted yearly for CPF members below 65 to keep pace with the growth in MediSave use.
For those who turn 65 in 2025, the sum will be fixed at $75,500 and remain unchanged thereafter.
CPF members below 55 years old will continue to earn an extra 1 percent interest on the first $60,000 of their combined account balances, capped at $20,000 for the Ordinary Account.
Those aged 55 and above will continue to earn an extra 2 percent interest on the first $30,000 of their combined balances, capped at $20,000 for the Ordinary Account, and an extra 1 percent on the next $30,000.
This extra interest applies to those who have used their savings to participate in CPF Life, which provides monthly payouts to CPF members for as long as they live, from age 65.
The extra interest earned on the Ordinary Account will go into the member’s Special or Retirement accounts.
The interest rates for the Ordinary Account and HDB housing loans remain unchanged at 2.5 percent and 2.6 percent respectively.