CPF Ordinary Account interest stays at 2.5%

Source : Straits Times - 18 Nov 2008

CENTRAL Provident Fund Board (CPF) members will continue to get interest of 2.5 per cent per annum on their savings in their Ordinary Accounts (OAs) from Jan 1 next year to March 31.
In a statement yesterday, the CPF Board said its computed interest rate, derived from the rates of major local banks for the Aug 1 to Oct 31 period, works out to 0.74 per cent per annum.
But the higher rate of 2.5 per cent will be paid because that is the minimum specified under the CPF Act.

At the same time, the Housing Board also announced that the concessionary interest rate for HDB mortgage loans will remain unchanged at 2.6 per cent per annum from Jan 1 to March 31.
This is pegged at 0.1 of a percentage point above the CPF interest rate for the OA.
The interest rates for Special, Medisave and Retirement accounts (SMRA) for January to March will be announced next month.

The prevailing CPF interest rate is 4 per cent, based on the 12-month average yield of the 10-year Singapore Government Security plus one per cent. To help members adjust to this floating rate, the 4 per cent floor for the SMRA rate will be maintained for the first two years from Jan 1 this year.

An extra 1 per cent interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the OA. The extra interest from the OA will go into members’ Special or Retirement accounts to boost their retirement savings.