CENTRAL Provident Fund (CPF) members’ savings in their Special and MediSave Accounts (SMA) will generate interest at a rate of 4.08 per cent from Jan 1, 2024, to Mar 31, 2024, from 4.04 per cent previously.

The CPF Board, Housing and Development Board (HDB) and Ministry of Health said on Wednesday (Dec 6) that the SMA interest rate has now exceeded the floor rate of 4 per cent due to the increase in the 12-month average yield of 10-year Singapore Government Securities.

The interest rate for savings in the Retirement Account (RA) will also be 4.08 per cent over the first quarter of 2024, from 4 per cent in 2023.

The authorities said that the RA interest rate peg will be aligned to that of the SMA, and will be computed quarterly, instead of annually, from Jan 1, 2024. “This change will allow the RA interest rate to be more responsive to the prevailing interest rate environment,” they noted.

The Ordinary Account (OA) interest rate will remain unchanged at 2.5 per cent, as the pegged OA rate remains below the floor rate of 2.5 per cent.

The HDB concessionary interest rate, which applies to housing loans taken from the board, will also stay unchanged at 2.6 per cent. The concessionary interest rate is pegged at 0.1 per cent above the OA interest rate.

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CPF members will also earn extra interest on their savings.

Those under 55 years old will earn an extra 1 per cent on the first S$60,000 of their combined balances. This will be capped at S$20,000 for OA balances.

For those aged 55 and above, the government will pay an extra 2 per cent interest on the first S$30,000 of combined balances, and an extra 1 per cent on the next S$30,000. The same cap on OA balances will apply.

Extra interest received on OA balances will go into the Special Account or Retirement Account.

From Jan 1, 2024, the basic healthcare sum (BHS) will be raised to S$71,500, from S$68,500 previously, for CPF members below 65 years old. It will be fixed at S$71,500 for those turning 65 in 2024.

The BHS is adjusted yearly for CPF members under 65, and represents the estimated savings required for basic subsidised healthcare needs in old age.

Members can make contributions to their MediSave Account up to the BHS, while MediSave contributions in excess of the BHS will be automatically transferred to their other CPF accounts.

CPF members who have less than the BHS are not required to top up their MediSave Account, and will still be able to withdraw funds from the account to pay for approved medical expenses. 

The authorities said the government will continue to ensure that CPF interest rate pegs remain relevant in the prevailing operating environment, while taking into consideration the longer-term outlook.