The interest rate floor on the Special, Medisave, and Retirement Account (SMRA) monies will remain at 4 per cent for another year until Dec. 31, 2023.
In a joint press release, the Central Provident Fund (CPF) Board and the Housing and Development Board (HDB) said on Sep. 21, that CPF members below 55 years old will continue to earn up to 5 per cent interest on the first S$60,000 of their combined balances, with up to S$20,000 from the Ordinary Account.
In the last quarter of 2022, they will also earn interest rates of up 3.5 per cent on their Ordinary Account monies and up to five per cent on their Special and Medisave Account.
CPF members aged 55 and above will be paid 6 per cent interest per annum on the first S$30,000 of their combined balances, with up to S$20,000 from the Ordinary Account. They will be paid 5 per cent on the next S$30,000.
The press release further stated that the HBD Concessionary Interest Rate would remain at 2.6 per cent until the end of the year.
It is pegged at 0.1 per cent above the Ordinary Account interest rate of 2.5 per cent.
Pegged to market instruments
Since Jan. 1, 2008, CPF interest rates have been pegged to market instruments of comparable risk and duration, CPF and HDB noted.
"While the recent rise in interest rates have led to an increase in the pegged SMRA rates, they remain below the floor rate of 4 per cent. To help members grow their savings consistently, the Government will be extending the 4 per cent floor rate on SMRA interest," stated the agencies.
They added that SMRA rates would continually be reviewed and that CPF members will earn the higher of the floor or pegged rate.
Top image from CPF and by John T via Unsplash