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4% interest rate extended for SMRA CPF accounts

SINGAPORE — The Government is extending the 4 per cent minimum interest rate on Central Provident Fund (CPF) savings in the Special, Medisave and Retirement accounts (SMRA) by another year, until Dec 31, 2014, in view of the uncertain global economy and low interest rate environment, the CPF said today (Sept 27).

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SINGAPORE — The Government is extending the 4 per cent minimum interest rate on Central Provident Fund (CPF) savings in the Special, Medisave and Retirement accounts (SMRA) by another year, until Dec 31, 2014, in view of the uncertain global economy and low interest rate environment, the CPF said today (Sept 27). The first S$60,000 of a CPF member’s combined savings earns an additional 1 per cent interest and that amount will thus continue to earn 5 per cent interest with the extension. Since 2008, SMRA savings have been invested in Special Singapore Government Securities (SSGS), which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities plus 1 per cent. This is a market-based rate for instruments of comparable risk and duration, and will ensure that members receive fair and reasonable interest rates, the CPF said. To help members cope with the transition, the Government had committed to providing a 4 per cent floor rate for SMRA interest for two years up to December 2009. The rate has been extended every year since then in light of global economic conditions and the fact that interest rates had been exceptionally low, the CPF said. The 4 per cent floor rate is currently due to expire on Dec 31 before this latest extension.

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