Gov’t extends 4% interest rate for SMRA in 2024

It will help CPF members mitigate the uncertain economic conditions.

The government said it extended a 4% interest rate floor for interest earned on all Special, MediSave, and Retirement Account (SMRA) monies for the whole year of 2024. 

In a joint statement, HDB and Central Provident Fund (CPF) said extending the floor rate will result in 4.04% earnings in the fourth quarter of 2023.

This is due to the increase in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), which the SMA interest rate is pegged to. 

The Ordinary Account (OA) interest rate will stay at 2.5% for the same period, as the pegged OA rate remains below the floor rate of 2.5%. 

The government is monitoring the interest rate environment closely to ensure that the CPF interest rate pegs stay relevant in the prevailing operating environment while taking into consideration the longer-term outlook.

Correspondingly, the concessionary interest rate for HDB housing loans, which is pegged at 0.1% above the OA interest rate, will be unchanged at 2.6% per annum from 1 October 2023 to 31 December 2023.

For members below 55 years old, they will earn an extra 1% interest on the first $60,000 of their combined balances (capped at $20,000 for OA).

For members aged 55 and above, the government pays an extra 2% interest on the first $30,000 of their combined balances (capped at $20,000 for OA), and an extra 1% on the next $30,000.

The extra interest received on the OA will be transferred to the member’s Special Account (SA) or Retirement Account (RA).

“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,” read the statement.

On the retirement account, the interest rate will be retained at 4% per annum from 1 January 2023 to 31 December 2023, as announced on 29 November 2022.