CENTRAL Provident Fund members will continue to receive 2.5 per cent a year interest on savings in their Ordinary Account for the first three months of next year.
The CPF board said yesterday the interest rate as derived from those of the major local banks from August to October this year worked out to 0.42 per cent a year. But interest of 2.5 per cent will be paid, as this is the minimum rate provided for under the CPF Act.
With the Housing & Development Board, the CPF Board also said the concessionary interest rate for HDB mortgage loans will remain at 2.6 per cent a year from January to March next year.
For the Medisave, Special and Retirement accounts, the interest rate will be announced in December, after the 12-month average yield of the 10-year Singapore Government Security has been computed.
The CPF interest rate for the Special, Medisave and Retirement Accounts is pegged at one per cent above the yield rate. The current rate of 4 per cent for the October-December period will be kept as the floor until Dec 31 next year, to ‘help members adjust to this floating rate’. In addition, an extra one per cent interest will be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account.
Source : Business Times – 17 Nov 2009
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