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Interest rates to drop to 4% for CPF Special, MediSave, and Retirement Accounts in Q1 2025

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SINGAPORE: From Jan 1 to Mar 31, 2025, the interest rate for the Central Provident Fund (CPF) Special, MediSave and Retirement Accounts (SMRA) will decrease to the floor rate of 4 per cent per annum, down from 4.14 per cent, according to The Business Times.

On Dec 11, the CPF Board, Housing and Development Board (HDB), and Ministry of Health explained that this follows a drop in the 12-month average yield of the 10-year Singapore Government Securities, which the SMRA interest rate is tied to.

Meanwhile, the Ordinary Account (OA) interest rate will stay at 2.5 per cent per annum for the first quarter of 2025, as it remains below the floor rate. The concessionary interest rate for HDB housing loans, set at 0.1 per cent above the OA rate, will also stay the same at 2.6 per cent per annum.

All CPF members will continue to earn extra interest on their savings. Members under 55 will earn an additional 1 per cent interest on the first S$60,000 of their combined CPF balances, with the extra interest capped at S$20,000 for OA balances.

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Members aged 55 and above will receive an extra 2 per cent interest on the first S$30,000 of their combined balances, with the same cap of S$20,000 for OA.

They will also get an additional 1 per cent interest on the next S$30,000. The extra interest earned on OA balances will be moved to their Special Account or Retirement Account.

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Starting Jan 1, 2025, the Basic Healthcare Sum (BHS) for CPF members under 65 will increase from S$71,500 to S$75,500.

For members turning 65 in 2025, their BHS will be set at S$75,500 from January 1, 2025, and will stay the same.

The BHS, which is the amount needed for basic subsidised healthcare in old age, is reviewed annually for members under 65 to reflect the growth in MediSave. Once members turn 65, the amount becomes fixed for life.

CPF members can contribute up to the BHS amount to their MediSave accounts. The extra money will be moved to their other CPF accounts if they contribute more.

Members with less than the BHS in their MediSave accounts do not need to top up and can still use their MediSave funds for approved medical expenses. /TISG

Read also: Singapore’s CPF ranks 5th in the 2024 Mercer CFA Institute Global Pension Index

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