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CPF Ordinary Account interest to stay at 2.5%

Published on Nov 15, 2012 1:59 PM
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All Central Provident Fund (CPF) members will continue to receive a guaranteed interest rate of 2.5 per cent on their Ordinary Account (OA) savings from Jan 1 to March 31 next year, the CPF Board announced on Thursday. -- ST PHOTO: CAROLINE CHIA

All Central Provident Fund (CPF) members will continue to receive a guaranteed interest rate of 2.5 per cent on their Ordinary Account (OA) savings from Jan 1 to March 31 next year, the CPF Board announced on Thursday.

This is because the computed CPF interest rate was below the legislated minimum of 2.5 per cent a year. The computed rate, derived from the major local banks' interest rates from Aug 1 to Oct 31 this year, was only 0.21 per cent a year.

An extra 1 per cent interest will continue to be paid on the first $60,000 of a CPF member's combined balances, including up to $20,000 from the OA. This extra interest from the OA will go into the member's Special or Retirement Account.

The concessionary interest rate for HDB mortgage loans, which is pegged at 0.1 percentage point above the CPF interest rate for the OA, will also remain unchanged at 2.6 per cent per annum for the first three months of 2013.