The CPF Board said the computed interest rate, derived from the major local banks' interest rates for the three-month period from 1 May to 31 July worked out to be 0.16 per cent per annum.
As this is below the legislated minimum of 2.50 per cent per annum, the Ordinary Account interest rate for October to December will remain unchanged at the legislated minimum of 2.50 per cent per annum.
In addition, an extra 1 per cent interest will continue to be paid on the first S$60,000 of a member's combined balances, with up to S$20,000 from the Ordinary Account.
The extra interest from the Ordinary Account will go into the member's Special or Retirement Account to enhance his retirement savings.
The concessionary interest rate for HDB mortgage loans, which is pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account, will remain unchanged at 2.60 per cent per annum from 1 October to 31 December.
For more information, the public can visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.
This is an interesting overview of how CPF Ordinary Account interest rates can influence housing decisions. The connection between CPF savings and HDB mortgage rates is especially useful for buyers to understand, since even a small difference in interest can affect the total cost of a home loan over time. I think it is also helpful for borrowers to compare their options carefully rather than looking only at the headline rate. Using the CPF housing loan interest rate as a reference point can give buyers a clearer idea of how their financing costs may work.
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