The Government has further extended the 4 per cent floor rate for interest earned on all Special, Medisave and Retirement Account monies until the end of next year.
In a joint statement yesterday, the Housing Board and Central Provident Fund (CPF) Board said that the decision was made due to the continuing low interest rate environment.
Before the extension, the current 4 per cent floor rate was due to expire on Dec 31 this year.
CPF members will continue to earn interest rates of up to 3.5 per cent a year on their Ordinary Account monies, and up to 5 per cent a year on their Special and Medisave accounts' monies in the last quarter of this year.
These interest rates include an extra 1 per cent interest paid on the first $60,000 of a member's combined balances, which is part of the Government's efforts to enhance the retirement savings of CPF members.
Up to $20,000 of this $60,000 comes from a member's Ordinary Account.
CPF members aged 55 and above will also earn an additional 1 per cent interest on the first $30,000 of their combined balances.
This is paid over and above the current extra 1 per cent interest that is earned on the first $60,000 of their combined balances.
As a result, CPF members aged 55 and above will earn up to 6 per cent interest a year on their retirement balances.
The extra interest received on a member's Ordinary Account will go into their Special Account or Retirement Account to enhance their retirement savings.