The interest rate for members' CPF savings in their Ordinary Account (OA) will remain unchanged at 2.50% interest per annum from January 1, 2009 to March 31, 2009.

This is despite the computed CPF interest rate derived from the major local banks' interest rates for the three-month period from August 1, 2008 to October 31, 2008, which works out to be 0.74% per annum. The higher rate of 2.50% will be paid as the CPF Act 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 January 1, 2009 to March 31, 2009.

Interest Rate For Special, Medisave & Retirement Accounts (SMRA)

The prevailing (October to December 2008) CPF interest rate for SMRA is 4%. This was computed based on the 12-month average yield of the 10-year Singapore Government Security (10YSGS) plus 1%. The SMRA interest rate for January to March 2009 will be announced in December 2008 after the average yield of the 10YSGS is computed. To help members adjust to this floating rate, the 4% floor for the SMRA rate will be maintained for the first two years.

Extra Interest of 1%
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. Improving returns on CPF savings is one of the key changes introduced to help Singaporeans improve their retirement adequacy.