CPF 4% Interest Rate Floor Extended Until 2026: What Singaporeans Need to

Hey there, fellow Singaporeans! If you’ve been keeping an eye on your CPF savings, you’re in for some good news. The Central Provident Fund (CPF) Board and Housing Board recently announced that the 4% interest rate floor for CPF Special, MediSave, and Retirement Account (SMRA) monies is being extended until the end of 2026. Yep, they’re basically keeping the interest guarantee going strong, which means more peace of mind when it comes to your hard-earned savings.

So, what exactly does this 4% interest rate floor mean? Well, it’s a minimum interest rate the CPF offers on your savings in the Special Account, MediSave Account, and Retirement Account. The floor ensures that even if market interest rates dip, your CPF savings won’t earn less than 4%, which has been a pretty solid safety net in recent years. Given how global interest rates have been quite volatile and generally trending downwards, this extension is a win for all CPF members.

Interest Rates Locked Until End of 2026

From October 1 to December 31, 2024, here’s the deal on the interest rates staying the same:

SMRA: 4%
Ordinary Account (OA): 2.5%
Concessionary HDB Housing Loan rate: 2.6%

These rates remain unchanged because the pegged interest rates for SMRA and OA are currently lower than their floor rates. How are these pegged rates calculated, you ask? The SMRA interest rate is pegged to the 12-month average yield of 10-year Singapore Government Securities plus 1%, and between August 2024 to July 2025, this average yield is 2.64%. Since 2.64% + 1% = 3.64%, which is below the floor, the 4% rate floor kicks in.

Similarly, the Ordinary Account’s interest rate is pegged to the three-month average interest rates of major local banks. From May to July, this average was around 0.45%, which is again below the OA’s floor rate of 2.5%.

And what about the concessionary rate for HDB housing loans? It’s pegged at a fixed 0.1% above the OA rate to help cover loan administration costs, making it a pretty affordable option for many homeowners.

Extra Interest Boost: More Savings, More Benefits

Now, here’s something to really smile about. CPF members can count on extra interest on their savings! Here’s the breakdown:

Under 55 years old: Earn an extra 1% interest on the first $60,000 of combined CPF balances, with a cap of $20,000 for the Ordinary Account.
55 years old and above: It gets better. You’ll receive an extra 2% interest on the first $30,000 of combined balances (capped at $20,000 for OA), plus an additional 1% extra interest on the next $30,000.

What’s really cool is that the extra interest earned on the OA balances for those above 55 is actually credited into their Special Account or Retirement Account, which helps beef up the savings that’re directly meant for retirement. It’s like getting a bonus savings boost that prepares you better for those golden years.

And for folks participating in CPF Life, the annuity scheme for retirement, you’re still earning extra interest on your combined CPF balances including the portion used for CPF Life. So, your retirement funds keep growing steadily even after you’ve started drawing from them.

Why This Matters

In times when interest rates globally have been all over the place, having a guaranteed minimum interest rate provides a comforting certainty. CPF savings form the bedrock of many Singaporeans’ financial security — whether it’s for housing, healthcare, or retirement. By extending the 4% floor, the authorities are showing a commitment to ensure that your CPF money works hard for you, even when market conditions are not so favorable.

On top of that, the extra interest incentives are not just numbers; they’re real boosts that help your savings grow faster, making a tangible difference in your financial future. For younger Singaporeans, it might take the pressure off having to save more aggressively elsewhere. For older members, meanwhile, the enhanced rates provide that much-needed comfort and flexibility.

Wrapping It Up

All in all, the extension of the 4% interest rate floor on your CPF Special, MediSave, and Retirement accounts until end-2026 is definitely a thumbs up. It preserves a safety net for your savings in an uncertain interest rate landscape and helps you prepare better for important life milestones like home ownership and retirement.

Of course, it’s always a good idea to keep an eye on your CPF statements and keep yourself informed about any updates. When it comes to your finances, staying proactive is the name of the game. With the guaranteed interest rates and extra bonuses in place, your CPF continues to be a cornerstone of your financial well-being. Here’s to more financially savvy days ahead!

Have thoughts or questions about CPF interest rates? Drop a comment below or chat with your friendly neighbourhood CPF service rep — because when it comes to your money, understanding the fine print really matters.