4% CPF interest rate for Special, Medisave and Retirement Accounts to be extended till end-2017

THE CPF building in Tampines Central.
THE CPF building in Tampines Central. PHOTO: ST FILE

SINGAPORE - All Central Provident Fund (CPF) members will continue to earn a minimum interest rate of 4 per cent on their Special, Medisave and Retirement Accounts (SMRA) till Dec 31 next year.

A joint news release by the CPF Board and Housing Development Board on Wednesday (Sept 21) said the Government had decided to further extend the rate for another year "in view of the continuing low interest rate environment".

It had been due to expire at the end of 2016.

The 4 per cent floor rate was first introduced in 2008 for two years. It was subsequently extended in light of global economic conditions and the fact that interest rates had been exceptionally low.

Meanwhile, the interest rate for Ordinary Account (OA) monies will be maintained at 2.5 per cent per annum from Oct 1 to Dec 31 this year.

This is because the computed rate - derived from the three-month average of major local banks' interest rates from May to July - of 0.24 per cent is lower than the legislated minimum interest rate.

The concessionary interest rate for HDB mortgage loans, pegged at 0.1 per cent above the OA interest rate, will also remain at 2.6 per cent over the same period.