The 4 per cent minimum interest rate on Central Provident Fund (CPF) savings in the Special, Medisave and Retirement accounts (SMRA) will be extended to Dec 31 next year.
The CPF Board said in a statement yesterday that the 4 per cent rate was supposed to end this year.
However, the rate is being extended to benefit members, given the much lower interest that can be earned commercially.
CPF members will continue to earn interest rates of up to 3.5 per cent a year for their Ordinary Account (OA), and up to 5 per cent a year on their SMRA until Dec 31 this year.
The interest rates include an additional 1 per cent interest paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA.
Since 2008, SMRA savings have been invested in Special Singapore Government Securities, which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities plus 1 per cent.
From Jan 1, CPF members aged 55 or older will earn an additional 1 per cent interest on the first $30,000 of their combined balances. This means CPF members aged 55 or above will earn up to 6 per cent interest a year on their retirement balances.
The extra interest received in the OA will go into CPF members' Special or Retirement Accounts.