Singapore CPF to keep OA interest rate at 2.5% for Apr-June

Singapore CPF to keep OA interest rate at 2.5% for Apr-June
THE Central Provident Board said yesterday that it will continue to pay 2.5 per cent interest a year for members’ CPF savings in their Ordinary Account (OA) from April 1 to June 30.
The concessionary interest rate for HDB mortgage loan, which is pegged at 0.1 percentage point above the CPF interest rate for the OA, will remain unchanged at 2.6 per cent a year over the same period, the Housing Development Board (HDB) said in the joint statement.

Although the computed CPF interest rate derived from the major local banks’ interest rates for the three months between November and January works out to 0.74 per cent a year, the CPF Act provides for a minimum CPF interest rate of 2.5 per cent a year.

The prevailing CPF interest rate from January to March for the Special, Medisave and Retirement Accounts (SMRA) is 4 per cent. This was computed based on the 12-month average yield of the 10-year Singapore Government Security (10YSGS) plus one per cent under the new CPF reforms announced last year.

The SMRA interest rate for April to June will be announced in March after the average yield of the 10YSGS is computed. To help members adjust to this floating rate, the 4 per cent floor for the SMRA rate will be maintained for the first two years, as earlier announced.
 
An extra one per cent interest will also be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the OA. The extra interest from the OA will go into the member’s Special or Retirement Account to enhance his retirement savings.

The CPF interest rate will continue to be reviewed quarterly, the CPF said.

Source : Business Times  - 19 Feb 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Bargain hunting starts in tepid property market »« Unexpected fall in new US jobless claims - WASHINGTON