Interest rate for SMA monies
Savings in the Special and Medisave Accounts (SMA) currently earn either 4% or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is the higher. The interest rate on SMA savings is adjusted quarterly, based on interest rates on 10YSGS over a preceding 12-month period. The average yield of the 10YSGS plus 1%, from March 2013 to February 2014, is 3.19%. Therefore, the SMA interest rate from 1 April 2014 to 30 June 2014 will be maintained at the current floor of 4%.
Interest Rate for RA Monies
New Retirement Account (RA) savings are invested in SSGS which earn a fixed coupon equal to either the 12-month average yield of the 10YSGS plus 1% at the point of issuance, or 4%, whichever is the higher, adjusted yearly. Given the lower 10YSGS yield, new RA savings will earn a fixed coupon of 4%.
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). The additional interest received on the OA will go into the member’s Special Account (SA) or RA to enhance his retirement savings. If a member is above 55 years old and participates in the CPF LIFE scheme, the additional 1% interest will still be earned on his combined balances, which includes the savings used for CPF LIFE.