No Change In CPF Interest And HDB Mortgage Rates

Source : The Straits Times, May 12, 2008

THE Central Provident Fund (CPF) board will keep the interest rate for members' CPF savings in their Ordinary Account at 2.5 per cent for the third quarter of this year.

According to a joint statement by CPF and HDB on Monday, the computed CPF interest rate derived from the major local banks' interest rates for the three-month period - Feb 1 to Apr 30, is 0.74 per cent per annum.

But the board will pay the higher rate of 2.50 per cent from July 1 to Sept 30 as the CPF Act provides for a minimum rate of 2.5 per cent per annum.

An extra one per cent interest will be also paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA).

The extra interest from the OA will go into the member's Special or Retirement Account for retirement savings.

The Housing Development Board's concessionary interest rate for its mortgage loan - pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account - will remain unchanged at 2.6 per cent per annum for the third quarter.

As for the interest rate for CPF's Special, Medisave & Retirement Accounts (SMRA), the new rate for July to September will announced in June.

This is because the SMRA interest rate, currently at 4 per cent, is calculated based on the 12-month average yield of the 10-year Singapore Government Security plus one per cent.