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Joint Press Release by CPF Board & HDB - CPF interest rates and HDB’s mortgage rate for Q2 2017
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 second quarter of 2017. CPF members will also earn up to 5% per annum on their Retirement Account (RA) monies in 2017. 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. 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 Special Account (SA) or RA 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 April 2017 to 30 June 2017, 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 April 2017 to 30 June 2017.
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 April 2017 to 30 June 2017, as the computed rate of 3.04% 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 2017 to 31 December 2017, as announced on 28 November 2016.
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.
RA monies credited in 2017 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 2015 to October 2016 is 3.08% per annum. As this is below the current floor rate of 4% per annum, new SSGS issued in the year of 2017 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.