The interest rates that Central Provident Fund (CPF) members earn on their various accounts will remain unchanged in the first quarter of next year, a joint statement by the CPF Board and Housing Board said yesterday.
CPF members will continue to earn interest rates of up to 3.5 per cent a year on the balances in their Ordinary Account (OA) and up to 5 per cent a year on their Special and Medisave Accounts from January to March next year.
The interest rates include an extra 1 per cent paid on the first $60,000 of a member's combined balances, which is part of the Government's efforts to enhance retirement savings of CPF members.
In addition to this, those aged 55 and above will also earn 1 per cent on the first $30,000 of their combined balances.
As a result of the additional interest, members aged 55 and above will earn up to 6 per cent interest per year on their retirement balances.
The extra interest received on the OA will go into the members' Special Account or Retirement Account to boost their retirement savings.
Those who are 55 and above and participate in the CPF Life scheme will also earn extra interest on their combined balances, which includes savings used for CPF Life.
The OA interest rate will be maintained at 2.5 per cent per annum from Jan 1 to March 31 next year.
The concessionary interest rate for HDB mortgage loans, pegged at 0.1 per cent above the OA interest rate, will remain unchanged at 2.6 per cent per annum from Jan 1 to March 31 next year.
The interest rates for Special and Medisave Accounts will be maintained at 4 per cent per year during the same period.
The Retirement Account interest rate will be maintained at 4 per cent a year for the first quarter of next year, as announced in September.
From Jan 1, the Basic Healthcare Sum for members below 65 will be raised from $57,200 to $60,000.
Those who turn 65 next year will have the sum fixed at $60,000, which will not be changed.
Those who are 66 and above next year will see no change to their cohort's Basic Healthcare Sum.
The Basic Healthcare Sum is the estimated savings required for basic subsidised healthcare needs in one's old age.
It is adjusted yearly for members below 65 years of age to keep pace with the growth in Medisave withdrawals. Once members reach the age of 65, the sum will be fixed for the rest of their lives.
