CPF interest rate kept at 2.5% minimum

Ordinary account savings will continue receiving the risk-free rate until end-2012.

In addition, an extra 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 OA.

According to Central Provident Fund (CPF) Board, the computed CPF interest rate, derived from the major local banks’ interest rates for the three-month period, 1 May 2012 to 31 July 2012, worked out to be 0.16% per annum. As this is below the legislated minimum of 2.50% per annum, the OA (ordinary account) interest rate for October to December 2012 will remain unchanged at the legislated minimum of 2.50% per annum.

CPF Board also said the extra interest from the OA will go into the member’s Special or Retirement Account to enhance his retirement savings.

Meanwhile, the concessionary interest rate for HDB mortgage loans, which is pegged at 0.1 percentage point above  the CPF interest rate for the OA, will remain unchanged at 2.60% per annum from 1 October 2012 to 31 December 2012.