Cpf interest rate to drop to 4%

The interest rate for Central Provident Fund (CPF) Special, Medisave, and Retirement accounts will decrease to 4 per cent per annum in the first quarter of 2025. This marks the first decrease after two consecutive quarterly increases. The change is due to a decrease in the 12-month average yield of 10-year Singapore Government Securities, according to a joint announcement by the CPF Board, Housing Development Board (HDB), and the Ministry of Health (MOH) on Wednesday (Dec 11). From Jan 1 to Mar 31, 2025, savings in the Special, Medisave, and Retirement accounts will earn 4 per cent per annum. The interest rate for the Ordinary Account (OA) will remain unchanged at 2.5 per cent for the same period. The concessionary interest rate for HDB housing loans, which is pegged at 0.1 per cent above the OA interest rate, will also remain at 2.6 per cent. The government has continued its scheme for additional interest on CPF savings to support members in boosting their retirement savings. Members below 55 years old can earn an extra 1 per cent interest on the first S$60,000 of their combined balances, with the extra interest on OA balances capped at S$20,000. Members aged 55 and above will receive additional interest rates tiered at 2 per cent on the first S$30,000 and 1 per cent on the next S$30,000 of their combined balances.

Cpf interest rate changes explained

For those enrolled in the CPF LIFE scheme and aged above 55, the additional interest will apply to their combined CPF balances, including the savings utilized under CPF LIFE. Authorities also announced an increase in the Basic Healthcare Sum (BHS) for 2025. Effective Jan 1, CPF members below 65 will see their BHS rise from S$71,500 to S$75,500. For those turning 65 in 2025, their BHS will be fixed at S$75,500. Members aged 66 and above in 2025 will retain their previously fixed BHS. The BHS reflects the estimated savings required for basic subsidised healthcare during old age and is adjusted annually to account for the growth in MediSave usage. Members can contribute to their MediSave account up to the BHS limit, with any excess contributions being automatically transferred to other CPF accounts. CPF members who have not reached the BHS are not obligated to top up their MediSave account and can continue withdrawing funds for approved medical expenses. For further information and updates on CPF interest rates and related policies, members are encouraged to visit the official CPF Board website.