Special and MediSave Account interest rate to increase in Q3; other CPF accounts unchanged
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The increase is due to a rise in the 12-month average yield of 10-year Singapore Government Securities.
PHOTO: ST FILE
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SINGAPORE – The interest rate for the Special and MediSave Account (SMA) of Central Provident Fund (CPF) members will increase to 4.01 per cent per annum, up from 4 per cent, for the period from July 1 to Sept 30.
This is due to an increase in the 12-month average yield of 10-year Singapore Government Securities,
The Government has maintained a floor interest rate of 4 per cent for the Special, Medisave and Retirement accounts since 2008. This is the first time the rate for the SMA has gone above 4 per cent since then.
Meanwhile, the interest rates for the Ordinary Account (OA) and Retirement Account will remain unchanged at 2.5 per cent and 4 per cent, respectively, per year.
“The Government is watching the interest rate environment closely to ensure that the CPF interest rate pegs remain relevant in the prevailing operating environment, while taking into consideration the longer-term outlook,” said the statement.
CPF members aged below 55 will continue to earn an additional 1 per cent interest a year on the first $60,000 of their combined balances, capped at $20,000 for the OA.
Meanwhile, those aged 55 and above will see more interest paid out on their accounts.
On top of receiving an extra 2 per cent interest on the first $30,000 of their combined balances, capped at $20,000 for the OA, they will also receive another 1 per cent on the next $30,000.
The concessionary interest rate for HDB housing loans will also remain unchanged during this period at 2.6 per cent a year.
The hike in interest rate for the SMA will correspond with the raising of the monthly salary ceiling for CPF contributions
The ceiling will be progressively increased to $8,000 by January 2026,
Mr Wong, who is also the Finance Minister, said the increase in the monthly salary ceiling would help middle-income Singaporeans save more for retirement, while also keep pace with rising salaries.
However, there will be no change to the annual salary ceiling, which sets the maximum amount of CPF contributions payable for all wages received in a year.
This is currently set at $102,000, and includes both ordinary wages and additional wages.
Those who are working and aged between 55 and 70 will also see more in their Special Accounts from Jan 1, 2024, when the contribution rates by employees and employers are raised by up to 1.5 percentage points.
For more information on CPF interest rates and their computation, go to cpf.gov.sg/CPFInterestRates
CPF members with inquiries can visit cpf.gov.sg cpf.gov.sg/writetous
