Written Answer to PQ on 4% Interest Rate Floor

NOTICE PAPER NO. 2470 OF 2023 FOR THE SITTING ON OR AFTER 10 JANUARY 2024
QUESTION NO. 5541 FOR ORAL ANSWER

MP: Mr Yip Hon Weng

To ask the Minister for Manpower (a) whether the 4% interest rate floor on the CPF Special, MediSave and Retirement Accounts will be extended beyond 31 December 2024; (b) what factors will be considered in determining the revised rate after that date; and (c) what are the circumstances under which the current interest rate floor may be reduced.

Answer:

1.The Government has extended the 4% interest rate floor on the Special, MediSave and Retirement Accounts (SMRA) monies to 31 December 2024 given the uncertain interest rate environment. With the pegged rate exceeding the 4% floor rate, CPF members will receive 4.08% per annum interest on their SMRA monies in the first quarter of 2024. The interest rate is reviewed quarterly.

2. We remain committed to help members grow their CPF savings. We will continue to review the CPF interest rates regularly, including whether to continue extending the 4% interest rate floor, taking into consideration factors such as the evolving global economic conditions and the interest rate environment.