CPF Board has just announced the extension of the floor rate of 4% interest p.a. for Special, Medisave and Retirement Account (SMRA) till 31 December 2012.
Since 1 January 2008, savings in SMRA have been invested in Special Government Securities (SSGS) which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%. The average yield of the 10YSGS plus 1%, from 1 September 2010 to 31 August 2011, works out to be 3.30%. As this is lower than the floor rate of 4%, CPF members will continue to enjoy the 4% interest p.a..
An additional 1% 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). Therefore, the SMRA monies which form the first $60,000 of a member’s combined balances will therefore continue to earn a 5% interest rate.
From 1 Jan 2013, the SMRA rates will be pegged to the 12-month average yield of 10YSGS plus 1%, subject to a floor rate of 2.5% per annum.