SINGAPORE – Interest rates for Special and MediSave accounts (SMAs) of Central Provident Fund (CPF) members will go up by 0.03 percentage point to hit 4.04 per cent a year for the final quarter of 2023, the CPF Board and the Housing Board said in a joint statement on Thursday.

The rate hike is due to an increase in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), which the SMAs’ interest rates are pegged to.

Interest rates will remain at 2.5 per cent for the Ordinary Account (OA) and 4 per cent for the Retirement Account (RA) for the last quarter of 2023.

CPF members will continue to earn at least 4 per cent interest on their Special, MediSave and Retirement accounts in 2024, the statement added.

This will provide certainty for CPF members amid the uncertain interest rate environment, said the statement.

The Government has maintained a floor interest rate of 4 per cent for the Special, MediSave and Retirement accounts since 2008.

The interest rates for the SMAs first went above 4 per cent for the period from July 1 to Sept 30 in 2023.

These rates are reviewed quarterly to ensure that members receive fair and reasonable returns, said the statement.

The concessionary interest rate for HDB housing loans, pegged at 0.1 per cent above the OA interest rate, will remain unchanged at 2.6 per cent a year from Oct 1 to Dec 31.

In addition, CPF members below 55 years old will continue to earn an extra 1 per cent interest on the first $60,000 of their combined account balances.

Those aged 55 and above will earn an extra 2 per cent interest on the first $30,000 of their combined balances, and an extra 1 per cent on the next $30,000.

CPF interest rates are determined based on the yields of major market instruments of similar risk and duration.

For the OA, the rate is pegged to the 12-month fixed deposit and month-end savings rates of the major local banks.

For the SMAs and RA, the rate is pegged to the 12-month average yield of the 10YSGS plus 1 per cent.