Ultimate CPF Interest Rates (2024) Guide: Rates, Calculation Methodology & Additional CPF Interest

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29 May 2024

29 May 2024 Update: Special, MediSave, Retirement Accounts Interest Rises to 4.08% In Q3 2024

Breaking news from the Central Provident Fund (CPF) board.

With the Special MediSave Account and Retirement Account (SMRA) pegged rate exceeding the floor rate of 4.00%, savings in the SMRA will earn 4.08% per annum (p.a.) in the third quarter of 2024 (1 July – 30 September 2024). This is due to the increase in the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1% which the SMRA interest rate is pegged to. This is a slight increase from last quarter’s 4.05% p.a.

However, as announced on 21 September 2023, the SMA and RA floor rate of 4.00% p.a. will not change until 31 December 2024.

The Ordinary Account (OA) interest rate will remain unchanged at 2.50% p.a. for the same period, as the pegged OA rate remains below the floor rate of 2.50% p.a. The Government will continue to ensure that the CPF interest rate pegs remain relevant in the prevailing operating environment while considering the longer-term outlook.

As such, the Housing and Development Board (HDB) Concessionary Interest rate, pegged at 0.10% above the OA interest rate, will remain unchanged at 2.60% p.a. for Q3 2024.

Here’s why this announcement — following CPF’s quarterly interest rate review — is important.

TL;DR: CPF Interest Rates (1 Jul – 30 Sep 2024) — What Are the Changes to CPF in 2024

Here are the upcoming changes to the CPF interest rates:

	Q2 2024 (1 Apr to 30 Jun 2024)	Q3 2024 (1 Jul to 30 Sep 2024)
Ordinary Account Interest Rate	2.50% p.a.	2.50% p.a.
Special, MediSave & Retirement Accounts Interest Rate	4.05% p.a.	4.08% p.a.

Source: CPF

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Interest Rate for CPF Ordinary Account and HDB Mortgage Rate (1 Jul – 30 Sep 2024)
Interest Rate for Special and MediSave Accounts (1 Jul – 30 Sep 2024)
Interest Rate for Retirement Account (1 Jul – 30 Sep 2024)
How Are The CPF Interest Rates Calculated?
How Can I Maximise My CPF Money: Additional CPF Interest and CPF Contribution Rate Explained

CPF OA Interest Rate and HDB Mortgage Rate (1 Jul – 30 Sep 2024)

Since the OA interest rate will be maintained at 2.50% p.a. from 1 July 2024 to 30 September 2024.

If you’re a home-owner, all you need to know is that the Concessionary Interest Rate for an HDB Mortgage Loan, which is pegged at 0.10% above the OA interest rate (charged as a loan distribution fee), remains unchanged at 2.60% p.a. for the same time period in Q3 2024.

Want the lowdown of all things property?

You might want to check out the property group on Seedly to learn more about home loans and more.

MediSave and Special Account CPF Interest Rate (1 Jul – 30 Sep 2024)

The SMA interest rate will be increased slightly to 4.08% p.a. from 1 July 2024 to 30 September 2024.

This is slightly higher than the previous quarter, where the rate was 4.05% p.a. from 1 April 2024 to 30 June 2024.

CPF Interest Rate History

This increase is history in the making. This is the first few times the CPF SMA account interest rate has been increased since the floor rate of 4.00% p.a. was first established in 2008.

Also, you might be wondering. How much more will you get with the increased interest for 2023 when the interest is credited on 1 January 2024?

Let me show it with an example.

For context, CPF has stated that:

CPF interest is computed monthly. It is credited to your respective accounts by 1 January of the following year and compounded annually.

CPF balances used for interest computation are affected by the transactions in your account. For instance, contributions (including refunds) received this month start earning interest next month. Withdrawals/deductions in this month will not earn interest from this month onwards.

This means that at the end of the year, you will get interest on the average weighted balance in your CPF account for the whole year.

Let’s say you have $100,000 in your SA and have maintained this amount for the whole year without any withdrawals.

Since CPF interest for the SA is increasing to 4.04% p.a. in Q4 2023, this means that the blended interest rate for the entire year would be 4.0125% [(4.0% + 4.0% + 4.01% + 4.04%)/4].

This means you’ll get just $4,012.50 in interest credited to you on 1 January 2024, which means you will have $104,012.50 in your CPF SA after 1 January 2024.

If you compare it to last year’s interest rate, where interest for the SA is 4.00% p.a. for 2022, you will have $4,000 in interest credited to you on 1 January 2023, which means you will have $104,000 in your CPF account.

In other words, you’ll get $12.50 more with the 2023 increase.

Retirement Account Interest (1 Jul – 30 Sep 2024)

The RA interest rate will increase to 4.08% p.a. from 1 July 2024 to 30 September 2024. This is a slight increase from the previous quarter (1 April 2024 to 30 June 2024), when it was 4.05% p.a.

However, as announced on 21 September 2023, the SMA and RA floor rate of 4.00% will not change until 31 December 2024.

How Are The CPF Interest Rates Calculated?

If you’re wondering how the people at Central Provident Fund (CPF) decide on the interest rates…

No, they don’t just pluck a number from the sky.

And no… they don’t throw darts at a piece of paper to randomly choose a number either.

There’s a science to it.

CPF Account	Current Interest Rate (% per annum)	Rate of Review	Type of Interest Rate	Interest Rate Determined By?	Current Interest Rate (% p.a.)
Ordinary Account	2.50	Quarterly	Floor	Legislated minimum	2.50%
Ordinary Account	2.50	Quarterly	Market	Three month average of major local banks' interest rates	0.45% for the period from Feb to Apr 2024
Special Account	4.00	Quarterly	Floor	Current interest rate floor	4.00%
Special Account	4.00	Quarterly	Market	Average yield of 10YSGS + 1%	4.08% for the period from May 2023 to Apr 2024
Medisave Account	4.00	Quarterly	Floor	Current interest rate floor	4.00%
Medisave Account	4.00	Quarterly	Market	Average yield of 10YSGS + 1%	4.08% for the period from May 2023 to Apr 2024
Retirement Account*	4.00	Yearly	Floor	Current interest rate floor	4.00%
Retirement Account*	4.00	Yearly	Market	Average yield of 10YSGS + 1%	4.08% for the period from May 2023 to Apr 2024

*From 1 January 2024, the RA interest rate peg will be aligned to that of the SMA and computed quarterly instead of annually. This change will allow the RA interest rate to be more responsive to the prevailing interest rate environment. Correspondingly, the SMA computed rate will apply to the RA from 1 January 2024.

If you’re wondering why the CPF interest rates took so long to go up when interest rates of Singapore Savings Bonds and Fixed Deposits have shot up, CPF’s official response was that the Government has extended the 4% floor rate on SMRA interest:

CPF interest rates have been pegged to market instruments of comparable risk and duration to ensure that members receive fair and reasonable returns. While the recent rise in interest rates have led to an increase in the pegged SMRA rates, they remain below the floor rate of 4%. To help members grow their savings consistently, the Government will be extending the 4% floor rate on SMRA interest. The SMRA rates will continue to be reviewed regularly and CPF members will earn the higher of the floor or pegged rate.

CPF Ordinary Account (OA) Interest Rate

Your OA balances earn a legislated minimum interest of 2.50% p.a.

OR the three-month average of major local banks’ interest rates, whichever is higher.

Average banks' interest rate (Feb to Apr 2024)	0.45%
CPF OA interest rate (1 Jul to 30 Sep 2024)	2.50% (legislated minimum)
Fee to cover cost of loan administration	0.10%
HDB mortgage rate (1 Jul to 30 Sep 2024)	2.60%

Since the most recent 3-month average yields from February 2024 to April 2024 yield a pitiful interest rate of 0.45% p.a.

We’ll all receive the 2.50% p.a. from our CPF OA as the yields are lower than the legislated minimum of 2.50% p.a.

This is reviewed every quarter.

CPF Special and MediSave Account Interest Rate

Your SA and MA balances earn the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1.00%.

OR the current rate floor of 4.00% p.a., whichever is the higher.

12-Month Average Yield of 10YSGS (February 2023 to January 2024)	3.05%
Plus 1%	1.00%
CPF SMA interest rate (1 April to 30 June 2024)	4.05%
CPF SMA interest rate floor (1 October 2023 to 31 December 2024)	4.00% (current rate floor; extended till 31 Dec 2024)

And since the average yield of the 10YSGS plus 1% from May 2023 to April 2024 is 4.08% p.a., which is higher than the current floor interest rate of 4.00% p.a. This is why we’ll receive a higher interest rate of 4.08% p.a. for Q3 2024.

Like the OA interest rate, the SMA rate will also be reviewed quarterly.

CPF Special Account Ceiling 2024

And in case you were wondering, the amount you can have in your CPF SA is not capped.

But, there is a cap to how much you can top up to your SA or RA.

Top-ups will be made to the SA if the recipient is under 55 and the RA if the recipient is 55 or older.

The top-up limit is the maximum top-up amount a recipient can receive in his CPF account. The limit is computed based on the recipient’s CPF savings:

Recipients below 55 years old: Current Full Retirement Sum (FRS) less the sum of SA savings and net SA savings withdrawn under the CPF Investment Scheme for investments that have not been completely disposed of.
Recipient 55 years old or above: Current Enhanced Retirement Sum (ERS) less RA savings¹.
1 RA savings refer to the cash set aside in the RA (excluding amounts such as interest earned and any government grants received), plus retirement withdrawals.

If you have topped up to these limits, you can still receive CPF contributions to your three CPF accounts from your employment or voluntary contributions to your three accounts.

But, the yearly amount you can top-up to your three CPF accounts is the difference between the CPF Annual Limit of $37,740 and the mandatory CPF contributions made for the calendar year. Remember to consider your mandatory CPF contributions, which you will receive for the calendar year, before making voluntary top-ups.

If the total mandatory CPF contributions and voluntary top-ups exceed the CPF Annual Limit in the calendar year, any excess voluntary top-ups will be refunded without interest. Therefore, consider your mandatory CPF contributions, which you will receive for the calendar year, before making voluntary top-ups.

CPF RA Interest Rate

From 1 January 2024, the RA interest rate peg will be aligned to that of the Special and SMA and computed quarterly instead of annually. This change will make the RA interest rate more responsive to the prevailing interest rate environment. Correspondingly, the SMA computed rate will apply to the RA from 1 January 2024.

This is why, from 1 July 2024, we will receive 4.08% p.a. on our RA savings.

How Can I Maximise My CPF Money: Additional CPF Interest and CPF Contribution Rate Explained

The CPF is a social security system that helps Singaporeans set aside savings for retirement.

So, if you put money into it for your future, you best believe that the Government is going to want to help you attain your retirement faster at these CPF contribution rates:

“How do they do that,” you ask?

By giving you additional CPF interest depending on your age!

Additional CPF Interest For CPF Members Below 55

If you are under 55 years old, you will be paid an extra 1% p.a. on the first $60,000 of your combined balances—up to $20,000 from your OA.

You will earn up to 3.50% p.a. a year on your OA monies.

And up to 5.00% p.a. on your SA and MA monies.

Additional CPF Interest For CPF Members Above 55

If you are above 55 years old, you will earn an extra 2.00% p.a. on the first $30,000 of your combined balances — with up to $20,000 from your OA.

And an extra 1.00% p.a. on the next $30,000.

The extra interest earned on your OA will go into your SA or RA.

If you’re above 55 and participating in the CPF LIFE scheme.

Extra interest will still be earned on your combined balances, including the savings used for CPF LIFE.

That’s a CPF tip you need to know for sure.

About Kenneth Fong

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