SINGAPORE - CPF Members will continue to enjoy a risk-free interest rate of 4 per cent on their Special and Medisave Accounts (SMA) from April to the end of June this year.
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Here is the press release from CPF:
CPF members will continue to enjoy a risk-free interest rate of 4 per cent on their Special and Medisave Accounts(SMA) from April 1, 2013 to June 30, 2013.
This is in line with the Government's announcement made in September 2012 to maintain the 4 per cent p.a. floor rate for interest earned on all SMA monies and Retirement Account (RA) monies until 31 December 2013.
Interest rate for SMA monies
Savings in the SMA currently earn either 4 per cent or the 12-month average yield of 10-year Singapore Government Securities(10YSGS) plus 1 per cent, whichever is the higher. The interest rate on SMA savings is adjusted quarterly, based on interest rates on 10YSGS over a preceding 12-month period.
The average yield of the 10YSGS plus 1 per cent, from March 1, 2012 to February 28, 2013, works out to be 2.44 per cent.
Accordingly, the SMA interest rate payable to CPF members from April 1, 2013 to June 30, 2013 will be maintained at the current floor of 4 per cent.
Background information on other announcements related to CPF Interest rates for SMA and RA monies
Additional Interest of 1 per cent
An additional 1 per cent interest will continue to be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member's SA or RA to enhance his retirement savings. If the member is above 55 years old and participates in the LIFE scheme, the additional 1 per cent interest will also be payable on his annuity premium, less annuity payouts already made. The additional interest earned on the member's LIFE annuity monies will be paid into his RA.
Interest Rate for RA Monies
New RA savings are invested in SSGS which earn a fixed coupon equal to either the 12-month average yield of the 10YSGS plus 1 per cent at the point of issuance, or 4 per cent, whichever is the higher, adjusted yearly.
Given the lower 10YSGS yield, new RA savings will earn a fixed coupon of 4 per cent (floor rate). The interest rate to be credited to the RA is the weighted average interest rate of the entire portfolio of these SSGS, and adjusted yearly in January.
The weighted average interest of the entire portfolio of these SSGS is 4 per cent at the moment, so the interest rate payable to CPF members on their RA balances from January 1, 2013 to December 31, 2013 will be 4 per cent, as announced on December 21, 2012.
For more information, please visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.