CPF interest rate to increase! This is a piece of good news for Singaporeans! From 1 July to 30 September 2023, the interest rate for CPF Special and MediSave account will increase from 4.0 per cent per annum to 4.01 per cent per annum. The interest rate for CPF Ordinary account remain unchanged at 2.5 per cent per annum.
How come there was a sudden increase in interest for the Special and MediSave account? The 12-month average yield of 10-year Singapore Government Securities (10YSGS) increased.
If you did not know, savings in the Special and MediSave accounts earn the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%. The interest rate is subjected to the current floor interest rate of 4% per annum and reviewed quarterly.
Savings in the Ordinary Account earn the 3-month average of major local banks’ interest rates. The interest rate is subjected to the legislated minimum interest of 2.5% per annum and reviewed quarterly.
If you are aged 55 and above, your savings in the Retirement Account earn the weighted average interest rate of the entire invested portfolio. New savings credited to Retirement Account each year earn the 12-month average yield of 10YSGS plus 1% computed for the year. The interest rate is subjected to the current floor interest rate of 4% per annum and reviewed annually.
Summary of CPF Interest Rate to Increase
Even though the increase is a minor 0.01%, I am already happy with any increase.
Here is a summary of the CPF interest rate for the various accounts:
- Ordinary Account interest rate from 1 July 2023 to 30 September 2023 is 2.5% per annum.
- Special Account and MediSave Account interest rates from 1 July 2023 to 30 September 2023 is 4.01% per annum.
- Retirement Account interest rate 1 July 2023 to 30 September 2023 is 4% per annum.