CPF Interest Rates On Some Accounts Including MediSave Will Increase To 4.08% In 2024
For the first quarter of 2024, the interest rates for Central Provident Fund (CPF) Special and MediSave (SMA) and Retirement Accounts (RA) will increase to 4.08%.
The increase in the rates for SMA is due to a rise in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), which it is pegged to.
Meanwhile, the Ordinary Account (OA) interest rate will remain unchanged at 2.5% for the same period.
CPF interest rates to increase for accounts including MediSave
According to a joint press release by the Ministry of Health (MOH), the CPF Board, and the Housing & Development Board (HDB), the interest rates will increase to 4.08% for SMA and RA from 1 Jan to 31 Mar 2024.
This was after an increase in the 12-month average yield of 10YSGS, which SMA’s interest rate is pegged to.
As a result, the SMA pegged rate exceeded the floor rate of 4%.
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The RA interest rate has also been aligned to that of the SMA and computed quarterly from 1 Jan 2024, as part of the government’s review of CPF interest rate pegs.
As such, savings in the RA will earn 4.08% for the first quarter of 2024 as well.
“This change will allow the RA interest rate to be more responsive to the prevailing interest rate environment,” MOH, HDB and the CPF Board stated.
In addition, there will be no change to the SMA and RA floor rate of 4% until 31 Dec 2024.
As for the interest rate for savings in the OA, it will remain unchanged at 2.5% for the same period, with the pegged OA rate remaining below the floor rate of 2.5%.
Enhancement of retirement savings
The government will also continue to enhance retirement savings for CPF members with them earning extra interest on their savings.
Members aged below 55 will earn an extra 1% interest on the first S$60,000 of their combined balances, capped at S$20,000 for OA.
Those 55 years old and above will have the government paying an extra 2% of interest on the first S$30,000 of their combined balances, capped at S$20,000 for OA, and an extra 1% on the next S$30,000.
The extra interest that the OA balances receive will be in the member’s Special Account (SA) or RA.
For members aged above 55 and under the CPF LIFE scheme, they will be able to earn the extra interest, which will include the savings used for CPF LIFE.
Basic Healthcare Sum will receive adjustment
There will also be an increase in the Basic Healthcare Sum (BHS).
The estimated savings required for basic subsidised healthcare needs in old age, the BHS receives yearly adjustments for members below 65 years old to keep up with the use of MediSave.
Once members reach 65 years of age, their BHS becomes fixed.
From 1 Jan 2024, the BHS will see an increase from S$68,500 to S$71,500 for members below 65 years old.
For those who will turn 65 years old in 2024, their BHS will remain fixed at S$71,500. The sum will also remain unchanged for members aged 66 and above in 2024.
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