BT : CPF interest rate for members' OA to remain at 2.5%

Business Times - 13 May 2010

CPF interest rate for members' OA to remain at 2.5%

THE Central Provident Fund Board said yesterday that it will continue to pay 2.5 per cent interest per annum for members' CPF savings in their Ordinary Account (OA) from July 1 to Sept 30.

The rate of 2.5 per cent was decided upon despite the computed CPF interest rate of 0.41 per cent per annum, which is derived from the major local banks' interest rates for the three-month period from February to end-April.

The CPF Board explained that this is because the CPF Act provides for a minimum CPF interest rate of 2.5 per cent per annum.

The concessionary interest rate for an HDB mortgage loan, which is pegged at 0.1 percentage point above the CPF interest rate for the OA, will remain unchanged at 2.6 per cent per annum for the same period.

In addition, an extra one per cent interest will continue to be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA.

The extra interest from the Ordinary Account will go into the member's Special or Retirement Account to enhance his retirement savings.

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