CPF Board has just announced that CPF members will continue to receive 4% interest per annum on their Special and Medisave Accounts (SMA) savings from 1 July 2010 to 30 September 2010.
Since 1 January 2008, savings in the SMA will earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, adjusted quarterly. However, the Government will maintain the 4% p.a. minimum rate for interest earned on all SMA and Retirement Account until 31 December 2010. Beyond this date, interest rates on all CPF accounts will be subject to a minimum rate of 2.5% p.a.
For the period 1 June 2009 to 31 May 2010, the 12-month average yield of the 10YSGS plus 1% worked out to be 3.59%. Since this rate is below the minimum rate of 4%, the SMA interest rate from 1 July 2010 to 30 September 2010 will remain at 4% p.a.