Central Provident Fund (CPF) members will earn 4.14 per cent interest for their Special, MediSave, and Retirement Account (SMRA) for the fourth quarter of 2024, which extends from Oct. 1 to Dec. 31, 2024. This marks an increase from the previous quarter’s rate of 4.08 per cent. Meanwhile, the Housing and Development Board (HDB) concessionary interest rate remains unchanged at 2.6 per cent.
Background
The CPF Board and HDB announced the new interest rates in a joint press release on Sep. 20. The SMRA interest rate is pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1 per cent. The average yield of 10YSGS from August 2023 to July 2024 was 3.14 per cent. The government has extended the 4 per cent interest rate floor for SMRA monies for another year, from Jan. 1 to Dec. 31, 2025, to provide CPF members with certainty amidst a volatile interest rate environment.
CPF interest rates from Oct. 1 to Dec. 31, 2024
The interest rate for the CPF Ordinary Account (OA) remains unchanged at 2.5 per cent per year. CPF members below the age of 55 can earn an extra 1 per cent interest on the first S$60,000 of their combined CPF balances. Those aged 55 and above will earn an extra 2 per cent interest on the first S$30,000 of their combined CPF balances, and an additional 1 per cent on the next S$30,000.
“The extension of the floor rate will continue to provide CPF members with certainty on the returns of their CPF savings amidst the volatile interest rate environment,” stated the CPF Board and HDB.
HDB loan interest rate stability
The HDB concessionary interest rate remains stable at 2.6 per cent per year. This rate is pegged at 0.1 per cent above the OA interest rate. The stability of the HDB loan interest rate provides predictability for homeowners financing their properties through HDB loans.
Implications for CPF members
The increase in the SMRA interest rate to 4.14 per cent is part of the government’s efforts to boost CPF members’ retirement savings. By maintaining the floor rate and offering additional interest for younger and older members, the CPF scheme aims to enhance the financial security of its members. This move is particularly significant in the current economic climate, where interest rates can be unpredictable.
Future outlook
The government’s decision to extend the 4 per cent floor rate for SMRA monies until the end of 2025 indicates a commitment to providing stable returns for CPF members. This measure is expected to help members plan their retirement savings more effectively, despite the fluctuating interest rate environment. The continued stability of the HDB loan interest rate also ensures that homeowners can manage their housing finances with greater confidence.
