As Singaporeans, we know that a portion of our salary goes to our CPF. We also know there exist many accounts, but which ones exactly do we have? What are the interest rates for the different CPF accounts? What exactly is the extra interest for CPF? Find out all the answers here.
Which CPF Accounts do I have?
If you have yet to reach 55 years old, you will possess 3 different CPF accounts namely, the Ordinary Account (OA), the Special Account (SA) and the Medisave Account (MA).
If you are age 55 and above, you will have one additional account on top of these 3 accounts. This additional account is the Retirement Account (RA).
What are the current CPF Interest Rates?
Interest Rate for Ordinary Account (OA)
Currently, the interest rate for the ordinary account is 2.5% per annum. This interest rate is dependent on the 3-month average of major local banks’ interest rates. However, it is subject to the legislated minimum interest of 2.5% per annum. Though reviewed quarterly, this rate has not changed in the past 20 years. The last time the interest rate for the OA was different was from January to June 1999 when the interest rate was 4.44%. Since then, the rate has remained at the minimum rate of 2.5%.
Interest Rate for Special Account (SA)
The interest rate for SA is 4% per annum. While the OA was based on the interest rate of banks, the SA is dependent on the Singapore Government Securities. More specifically, the interest rate is computed based on the 12-month average yield of 10-year Singapore Government Securities, also known as 10YSGS. However, it is also subject to a minimum rate, at 4%.The rate is reviewed quarterly and similarly hasn’t changed since July 1999.
Interest Rate for Medisave Account (MA)
The interest rate for MA is also 4% per annum, just like the SA. Computation is also like that of SA’s.
Interest Rate for Retirement Account (RA)
The RA has an interest rate of 4% per annum. Unlike the other accounts, the interest rate for RA is reviewed annually. The interest rate is computed based on the weighted average interest rate of the entire invested portfolio. New savings credited to RA each year earn the 12-month average yield of 10YSGS plus 1% computed for the year, subject to the current floor interest rate of 4% per annum.
How much extra interest can I earn for my CPF?
To make the CPF more progressive, the government is paying extra interest. This also serves to encourage Singaporeans to preserve savings in their CPF accounts and make top-ups to the CPF accounts of family members.
If you are below 55 years old, you will earn an extra 1% per annum on the first $60,000 of your combined balances (capped at $20,000 for OA). The extra interest earned on your SA and MA will go to the respective accounts, while the extra interest earned on your OA will go into your SA to enhance your retirement savings.
If you are 55 years old and above, you will earn an extra 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA also). The extra interest earned on your SA.MA and RA balances will go to the respective accounts, while the extra interest earned on your OA balances will go into your RA to enhance your retirement savings. This means you can earn up to 6% on your retirement savings! If you are participating in the CPF LIFE scheme, the extra interest will still be earned on your combined balances, including the savings used for CPF LIFE.