CPF and HDB have announced their decision to keep key rates unchanged. Members will have a chance to earn up to 3.5% p.a. on their Ordinary Account monies and up to 5% p.a. on their Special, Medisave and Retirement Account monies. HDB loan has been kept unchanged at 2.6% p.a.
Bankbazaar Singapore – February 20, 2018
Singapore: The Government of Singapore has announced that key interest rates applicable on Central Provident Fund (CPF) accounts and the interest rate on mortgage loans offered by Housing Development Board (HDB) will remain unchanged for the second quarter of 2018.
General members will continue to earn 2.5% p.a. on their monies in their CPF Ordinary Account (OA) and 4% p.a. on their savings in their Special and Medisave Accounts (SMA). Interest rate applicable on the CPF Retirement Account (RA) has also been held at 4% p.a.
HDB mortgage loans will continue to stay pegged at 0.1% above the OA interest rate. Currently, it stands at 2.6% p.a.
It was also announced that CPF members who have a combined balance of S$60,000 or more will continue to earn a full percentage point above the usual rates. A maximum of S$20,000 will be considered from the Ordinary Account of a member when calculating the total balance.
This means, members have a chance to earn up to 3.5% p.a. on their OA monies and up to 5% p.a. on their SMA and RA monies during Q2 2018. This move is consistent with the government’s goal to encourage greater savings among CPF members for a secure future, especially after retirement.
Additional interest earned by a member on their OA will be deposited in their SMA or RA account.
The government has announced that CPF members aged 55 and above will continue to earn an additional 1% p.a. on their retirement funds held with CPF.
This interest payout will be calculated on the first S$30,000 of their combined balance in addition to 1% that members can earn on the first S$60,000 of their combined CPF balances. So, a member who is aged 55 or above, can earn up to 6% on their RA monies.
In the joint press release from CPF and HDB, it was also announced that for members who are aged 55 or above, and who have invested money in the CPF Life plan, interest will be calculated on the combined balance that includes their contribution to the life insurance policy.
It needs to be mentioned in this context that to encourage aging members to save more money in anticipation of a steady rise in healthcare costs, CPF had revised the Basic Healthcare Sum (BHS) contribution upwards from S$52,000 to S$54,500 sequentially in the last quarter.