The Special, Medisave and Retirement Accounts (SMRA) interest rate from October 1, 2009 to December 31, 2009 will remain at the floor rate of 4 per cent.

To help CPF members adjust to the floating SMRA rate, the Government will maintain the 4% floor rate for two years. From January 1, 2008 to December 31, 2009, the interest rate for savings in the SMRA has been pegged to the 12-month average yield of the 10-year Singapore Government Security (10YSGS) plus 1%.

The average yield of the 10YSGS over one year, from September 1, 2008 to August 31, 2009, plus 1% worked out to be 3.40%.

After December 31 this year, the 2.5% floor rate will apply for all CPF accounts.

Additional interest of 1%

An additional 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 additional interest received on 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. Improving returns on CPF savings is one of the key changes introduced to help Singaporeans improve their retirement adequacy.