The Central Provident Fund (CPF) Board will continue to pay 2.50% interest per annum for members' CPF savings in their OA from 1 July 2009 to 30 September 2009. This is despite the computed CPF interest rate derived from the major local banks' interest rates for the three-month period, 1 February 2009 to 30 April 2009, which worked out to be 0.56 % per annum.

The higher payout rate is in line with the CPF act, which provides for a minimum CPF interest rate of 2.50% per annum.

Meanwhile, the concessionary interest rate for HDB mortgage loan, which is pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account, will remain unchanged at 2.60% per annum from 1 July 2009 to 30 September 2009.

The Special, Medisave & Retirement Accounts (SMRA) interest rate for July to September 2009 will be announced in June 2009 after the average yield of the 10YSGS is computed. It is currently pegged at 4 per cent. This rate will be maintained till 31 December 2009 to help members adjust to the floating rate.

In addition, an extra 1% interest will be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA). The extra interest from the OA will go into the member's Special or Retirement Account to enhance his retirement savings.

The CPF interest rate will continue to be reviewed quarterly.