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CPF raises Special, MediSave, and Retirement Account interest rates to 4.08%

In Q1 2024, CPF members will receive a 4.08% interest rate in their Special and MediSave Account (SMA), according to CPF’s Wednesday announcement.

Additionally, starting 1 January next year, the Retirement Account (RA) interest rate peg will match the SMA and be calculated quarterly.



SINGAPORE: In a joint statement on Wednesday (6 Dec), the CPF Board, Housing & Development Board (HDB), and Ministry of Health (MOH) announced an increase in the interest rates for Central Provident Fund (CPF) accounts, with the Special and MediSave Accounts (SMA) experiencing a rise to 4.08 per cent per annum.

This marks the third consecutive quarterly increase and is attributed to the upsurge in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), to which the SMA rate is linked.

The revised rates will come into effect in the first quarter of 2024.

Earlier this year, the SMA interest rates were raised successively to 4.01 per cent and then 4.04 per cent for the fourth quarter.

Simultaneously, the Retirement Account (RA) interest rate is also set to increase to 4.08 per cent for Q1 2024.

Additionally, starting 1 January next year, the RA interest rate peg will align with the SMA and be calculated quarterly, making it more responsive to the prevailing interest rates.

The floor rates for SMA and RA will remain at 4 per cent until 31 December 2024.

The Ordinary Account (OA) interest rate will stay unchanged at 2.5 per cent for the same period, being lower than the 2.5 per cent floor rate.

To bolster retirement savings, CPF members will continue to receive extra interest on their savings.

Members under 55 will earn an additional 1 per cent interest on the first S$60,000 of their combined balances, capped at S$20,000 for the OA.

For those 55 and above, an extra 2 per cent interest on the first S$30,000 of their balances, capped at S$20,000 for the OA, and an additional 1 per cent on the subsequent S$30,000 will be provided.

This extra interest on OA balances will be channelled into the member’s Special Account (SA) or RA.

For individuals participating in the CPF LIFE scheme and aged 55 or above, the extra interest will be earned on their overall CPF balances, encompassing the savings utilized for CPF LIFE.

Moreover, the concessionary interest rate for HDB housing loans, pegged at 0.1 per cent above the OA interest rate, will remain at 2.6 per cent per annum in Q1 2024, as the OA interest rate remains unchanged.

These rates will be effective from January 1 to March 31.

The authorities also disclosed an increase in the Basic Healthcare Sum (BHS) for 2024.

Below 65, CPF members will witness an increment from S$68,500 to S$71,500, while those turning 65 in 2024 will have their BHS fixed at S$71,500, remaining constant thereafter.

For members aged 66 and above in 2024, their BHS, already fixed, will remain unchanged.

The BHS reflects estimated savings necessary for basic subsidized healthcare needs in old age and is adjusted annually by the MOH for those below 65 to keep pace with MediSave use.

Contributions exceeding a member’s BHS will be automatically transferred to other CPF accounts.

Members with savings below the BHS aren’t required to top up their MA and can still withdraw from it for approved medical expenses.

WP MP Louis Chua calls for balanced CPF OA rates to safeguard Singaporeans’ retirement funds against inflation

In May this year, Mr Louis Chua, a Workers’ Party Member of Parliament for Seng Kang GRC, urged the government to review the CPF’s OA formula.

He believes that the formula should be adjusted in a timely manner to ensure that Singaporeans’ retirement savings can keep up with inflation or at least reflect market interest rates.

Commenting on the SMA’s interest rate adjustment, Louis Chua said while it is “not much to shout about”, at the very least, it is pegged to 10YSGS’s yields with a floor rate to ensure a minimal level of interest returns for Singaporeans long term retirement savings needs.

Loius Chua who is also a CFA® Charterholder (Chartered Financial Analyst), highlighted that the OA interest rate remains unchanged at 2.5% for the same period, as major local banks’ interest rates over the last 3 months are computed to be at 0.66 per cent (for the period from February to April 2023).

“Whether it’s fixed deposit rates or savings accounts across the 3 local banks such as the UOB One, OCBC 360 or DBS Multiplier accounts, it’s quite clear that interest rates are significantly higher than the 0.66% which the CPF computed.”

Moreover,  Mr Chua pointed out that the rising inflation rate, which was 5.7% in April last month, with core inflation at 5%, “even if inflation rates come down…it could well settle at higher levels vs. recent history.”

Therefore, he asserts that it is crucial to reevaluate the OA formula, which has remained unchanged since 1999, to at least better take into account the current nature of fixed deposit and savings rates from the three local banks, even if the “CPF’s preference is not to consider inflation in the formula”.

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Risk classification Moody has a few days back down graded Communist China and it’s municipals and big private corporations to problematical investment grades.Just hope that citizens CPF moneys on loan to the Singapore Government are not used to help out financially desperate Communist China.

Chuense speak English in Chinese land. Wow. Disrespectful of a yellow skin towards others of the same skin colour. Might be LW dyed his hair red colour since red is Communist colour.

CPF interests rates were at 5~6.5 % in the mid 60s thru to mid 80s. And IMPORTANTLY there WAS ZERO Ownself pay Ownself Millionaire Politicians of the PAP Administration. Kuan Yew WAS STRICTLY AGAINST. Against a backdrop, HDB flats RENTALS with 99 years life, most hardly priced at $200,000 and or above. And FACT IS MANY can serviced STILL RETIRE DECENTLY. Wise to infer now with PAP Administration Political Office Holders with SKY HIGH salaries, there must be a Co Relation between low CPF interest rates and Astronomical Public Salaries while they can claim economy is also a factor. As… Read more »

Said many times, the rich leaders just used this CPF system like their offshore account to park money on the ppl and take it back when they play their political game! Ask them questions and they refused to answer!

CPF not updated for 2023. Dunno what status?!? No idea?!?

Town Council fund made money then keep quiet lor .