The interest rate for Central Provident Fund (CPF) Special, MediSave, and Retirement accounts is set to fall to 4 per cent per annum in the first quarter of 2025, a decline from the previous quarter’s rate of 4.14 per cent. The CPF Board, Housing Board (HDB), and Ministry of Health (MOH) attributed this adjustment to the decrease in the 12-month average yield of 10-year Singapore Government Securities.
In a joint news release on Wednesday (Dec 11), it was announced that “Savings in the Special, MediSave and Retirement accounts will earn 4 per cent per annum from Jan 1 to Mar 31, 2025.” Meanwhile, the Ordinary Account (OA) interest rate will remain steady at 2.5 per cent for the first quarter of the upcoming year. The concessionary interest rate for HDB housing loans will also remain unchanged at 2.6 per cent, pegged at 0.1 per cent above the OA interest rate.
As part of the government’s initiative to bolster retirement savings for CPF members, additional interest will be granted on members’ CPF savings. According to the announcement, “Those below 55 years old will earn an extra 1 per cent interest on the first S$60,000 of their combined balances. This interest is capped at S$20,000 for the OA.”
For members aged 55 and above, “an extra 2 per cent interest on the first S$30,000 of their combined balances, capped at S$20,000 for the OA, and an extra 1 per cent on the next S$30,000” will be provided. The supplementary interest accrued on the OA balances will be transferred to the member’s Special Account or Retirement Account.
Additionally, members over the age of 55 who participate in the CPF LIFE scheme will still enjoy the extra interest on their combined CPF balances, including savings used for CPF LIFE.
The authorities also revealed an increase in the Basic Healthcare Sum (BHS) in 2025. Starting from Jan 1, “CPF members aged below 65 will have their BHS increased from S$71,500 to S$75,500,” with those turning 65 in 2025 having a fixed BHS of S$75,500. For members aged 66 and above in 2025, their BHS has already been fixed and will remain unchanged.
The BHS represents the estimated savings necessary for basic subsidized healthcare needs in old age and is adjusted annually by MOH for members below 65 to align with the growth in MediSave use.
Members have the option to contribute to the MediSave account up to the BHS. Any MediSave contributions exceeding a member’s BHS will be automatically transferred to their other CPF accounts. Furthermore, CPF members with less than the BHS are not mandated to top up their MediSave account and can still withdraw from it to cover approved medical expenses.
