SGD – CPF interest rate to remain at 2.5%

Central Provision Fund (CPF) is a compulsory retirement savings plan that all Citizens of Singapore need to contribute to as a percentage of their monthly wage. The minimum interest given by the Government on CPF Savings is 2.5%, while in theory this CPF rate can be higher than 2.5% should SIBOR improves, for the past decade, low SIBOR in Singapore has pushed CPF Interest to stay at 2.5% and this appears to hold at least until March 31st 2013.

More information about how the Retirement Fund can be found here.

All CPF members will continue to receive a risk-free interest rate of 2.5 per cent on their Ordinary Account savings from Jan 1, 2013 to March 31, 2013.

The computed CPF interest rate, derived from the major local banks’ interest rates for the three-month period, Aug 1, 2012 to Oct 31, 2012, worked out to be 0.21 per cent per annum. As this is below the legislated minimum of 2.50 per cent per annum, the OA interest rate for January 2013 to March 2013 will remain unchanged at the legislated minimum of 2.50 per cent per annum.

In addition, an extra 1 per cent interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the OA. The extra interest from the OA will go into the member’s Special or Retirement Account to enhance his retirement savings.

The concessionary interest rate for HDB mortgage loans, which is pegged at 0.1 percentage point above the CPF interest rate for the OA, will remain unchanged at 2.60 per cent per annum from Jan 1, 2013 to March 31, 2013.

Via – AsiaOne

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