Floor interest rate for CPF Special, MediSave and Retirement accounts to remain at 4% for 2027

SINGAPORE: The 4 per cent floor interest rate for all Central Provident Fund (CPF) Special, MediSave and Retirement accounts will be extended for another year in 2027.

The extension of the floor rate will continue to help members grow their retirement savings, providing them with certainty on their CPF returns amid the uncertain economic and interest rate environment, the CPF Board and the Housing and Development Board (HDB) said in a joint press release on Tuesday (Sep 22).

The 4 per cent interest rate for Special, MediSave and Retirement accounts will also remain unchanged for the fourth quarter of this year as the pegged rate remains below the floor rate of 4 per cent.

It is pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1 per cent.

The Ordinary Account interest rate will also remain unchanged at the floor rate of 2.5 per cent per annum for the fourth quarter, as the pegged rate remains below the floor rate.

Similarly, the concessionary interest rate for HDB housing loans, which is pegged at 0.1 per cent above the Ordinary Account interest rate, will remain unchanged at 2.6 per cent per annum for Q4.

The US Federal Reserve raised interest rates by 0.25 percentage points on Sep 16, marking the first increase since 2023. 

Fed policymakers have signalled that more increases could follow, and while Singapore does not directly follow the US central bank’s interest rate decisions, US rates can influence global funding conditions and, in turn, Singapore’s interest rates.

These include the Singapore Overnight Rate Average (SORA) that is used to price many floating-rate home loans.

CPF members will continue to earn extra interest as part of the government’s efforts to boost retirement savings.

For members aged below 55, they will earn an extra 1 per cent interest on the first S$60,000 of their combined balances, capped at S$20,000 for Ordinary Accounts.

For members aged 55 and above, the government pays an extra 2 per cent interest on the first S$30,000 of their combined balances, also capped at S$20,000 for Ordinary Accounts, and an extra 1 per cent on the next S$30,000.  

The extra interest earned on Ordinary Account balances will go into the member’s Special Account or Retirement Account.

Members aged 55 and above who participate in the CPF LIFE scheme will still earn the extra interest on their combined CPF balances. This includes the savings used for CPF LIFE.