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Joint Press Release by CPF Board and HDB - CPF Interest Rates & HDB Mortgage Rates from 1 July 2016 to 30 September 2016
Central Provident Fund (CPF) members will continue to earn interest rates of up to 3.5% per annum on their Ordinary Account (OA) monies, and up to 5% per annum on their Special and Medisave Accounts (SMA) monies in the third quarter of 2016. These interest rates include an extra 1% interest paid on the first $60,000 of a member’s combined balances (with up to $20,000 from the OA) which is part of the Government’s efforts to enhance the retirement savings of CPF members.
CPF members aged 55 and above will also earn an additional 1% extra interest on the first $30,000 of their combined balances (with up to $20,000 from the OA) from January 2016. This is paid over and above the current extra 1% interest that is earned on the first $60,000 of their combined balances. As a result, CPF members aged 55 and above will earn up to 6% interest per year on their retirement balances.
The extra interest received on the OA will go into the member’s SA or Retirement Account to enhance his or her retirement savings. If a member is above 55 years old and participates in the CPF LIFE scheme, the extra interest will still be earned on his or her combined balances, which includes the savings used for CPF LIFE.
The OA interest rate will be maintained at 2.5% per annum from 1 July 2016 to 30 September 2016, as the computed rate of 0.24% is lower than the legislated minimum interest rate.
Correspondingly, the concessionary interest rate for HDB mortgage loans, which is pegged at 0.1% above the OA interest rate, will remain unchanged at 2.6% per annum from 1 July 2016 to 30 September 2016.
Please refer to Annex A for the detailed computation of the OA interest rate and HDB mortgage rate.
The SMA interest rate will be maintained at 4% per annum from 1 July 2016 to 30 September 2016, as the computed rate of 3.43% is lower than the current floor interest rate of 4% per annum.
Please refer to Annex B for the detailed computation of the SMA interest rate.
The RA interest rate will be maintained at 4% per annum from 1 January 2016 to 31 December 2016, as announced on 30 November 2015.
Please refer to Annex C for the detailed computation of the RA interest rate.
CPF members can visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188 for enquiries.
The interest rate on OA monies is adjusted quarterly. OA monies earn either the legislated minimum interest of 2.5% per annum, or the 3-month average of major local banks’ interest rates, whichever is higher.
The interest rate on SMA monies is adjusted quarterly. SMA monies earn either the current floor interest rate of 4% per annum or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is higher.
Source: Yields of 10-Year Singapore Government Securities are obtained from www.sgs.gov.sg
RA monies credited in 2016 will be invested in newly-issued Special Singapore Government Securities (SSGS) which will earn a fixed coupon rate equal to either the 12-month average yield of the 10YSGS plus 1% computed for the year, or the current floor rate of 4% per annum, whichever is higher.
The average yield of the 10YSGS plus 1% from November 2014 to October 2015 is 3.39% per annum. As this is below the current floor rate of 4% per annum, new SSGS issued in the year of 2016 will pay a fixed coupon of 4%.
The interest rate earned by RA monies is the weighted average interest rate of the entire portfolio of these SSGS, which is adjusted in January each year to take into account the coupon rates payable by the new SSGS issuance.