SINGAPORE – The interest rate on the Central Provident Fund (CPF) Special Provision Accounts (SMA) will increase from 4.04 percent per annum to 4.08 percent per annum in the first quarter of 2024 – January 1 to March 31, 2024.
“This is due to the increase in the 12-month average yield of 10-year Singapore Government Bonds (10YSGS), to which the SMA interest rate is linked,” the CPF, Housing and Development Board (HDB) and Ministry of Health (MOH) said in a joint statement on Wednesday (Dec 6).
The interest rate on retirement accounts (RA) will also rise to 4.08 percent over the same period.
The RA interest rate peg will be aligned with that of the SMA as part of the government’s review of CPF interest rate pegs and will be calculated quarterly instead of annually from 1 January 2024.
“This change will enable the RA interest rate to better respond to the prevailing interest rate environment,” the authorities said.
No change in minimum interest rates for CPF accounts
However, the SMA and RA minimum rate of four percent will not change until December 31, 2024, as announced on September 21, 2023.
The interest rate on current accounts (OA) remains unchanged at 2.5 percent for the same period, as the fixed OA rate remains below the minimum rate of 2.5 percent.
They said the government would continue to ensure that CPF interest rate pegs remained relevant in the prevailing operating environment, while taking into account the longer-term outlook.
Additional interest on CPF savings
As part of the government’s efforts to improve retirement savings, CPF members will also receive additional interest on their CPF savings.
CPF members aged under 55 will receive one percent additional interest on the first S$60,000 of their total balance (up to S$20,000 for OA). CPF members aged 55 and above will receive two percent additional interest on the first S$30,000 of their total balance (up to S$20,000 for OA) and one percent additional interest on the next S$30,000.
“The additional interest earned on the OA balances will be paid into the member’s Special Account (SA) or Retirement Savings Account (RA). If a member is over 55 years old and participates in the CPF LIFE programme, the additional interest will still be earned on their combined CPF balances, which includes savings used for CPF LIFE,” the authorities said.
Accordingly, the reduced interest rate on HDB housing loans, which is 0.1 percent above the OA rate, will remain unchanged at 2.6 percent per annum from 1 January 2024 to 31 March 2024.
Adjusted basic care amount
From January 1, the Basic Healthcare Sum (BHS) for members under 65 will increase from S$68,500 to S$71,500. For members who turn 65 in 2024, their BHS will be fixed at S$71,500 and will not change thereafter.
For members who will be 66 years of age or older in 2024, their cohort BHS has already been determined and will remain unchanged.
Authorities said the BHS for members under 65 will be adjusted annually to keep pace with increasing Medisave usage. Once members reach age 65, their BHS will remain the same for the rest of their lives.
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