4% p.a. interest rate for CPF SMA and RA

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.



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