To help members cope with the current economic climate, the Government will maintain the four per cent floor rate for interest earned on all Special, Medisave and Retirement Accounts for another year.

From 2011, the 2.5 per cent floor rate will apply for all CPF accounts.

Interest rate for Special, Medisave and Retirement Accounts

Since January 2008, savings in the Special and Medisave Accounts have been invested in Special Government Securities which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities plus one percent.

The 12-month average yield of Special Government Securities worked out to be 3.31 per cent for the period Dec 1, 2008 to Nov 30, 2009.

As the interest rate peg is below 4 per cent, the interest rate for the first quarter of 2010 will be maintained at 4 per cent.

The Retirement Account interest rate for the same period will also be 4 per cent.

An additional 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 Ordinary Account.

The additional interest received will go into the member's Special or Retirement account to enhance his retirement savings.

If the member is above 55 years old and participates in the LIFE scheme, the additional 1 per cent interest will also apply to his annuity premium, less annuity payouts already made.

Medisave required amount

From Jan 1 next year, the Medisave required amount will be raised from the current $18, 000 to $22,500.

For more information, you can visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.