Nearly half a million Singaporeans hold substantial balances across CPF accounts, and small shifts in returns can change retirement outcomes dramatically. We start with a clear fact: the CPF ordinary account has a legislated floor of 2.5 per annum, while special, MediSave and Retirement Accounts carry a 4.0% floor through 2025.
We guide you through how these rules affect housing, healthcare, and long‑term savings in simple terms you can act on. You’ll learn why CPF interest rates are reviewed quarterly and how extra payouts for early savings slices boost your balance as you age.
We explain key trade‑offs between guaranteed CPF returns and market options so you can balance safety with growth. If you want tailored numbers, Whatsapp us for a discovery session and we’ll map policies to your goals.
Key Takeaways
- CPf ordinary account has a 2.5 per annum floor that anchors returns.
- SMRA accounts get a 4.0% floor to end‑2025, tied to long‑term government yields.
- Extra boosts apply to the first slices of combined CPF balances and rise with age.
- Quarterly reviews mean policy can change, but floors protect core savings.
- Understand salary ceilings and contribution rules to plan retirement and liquidity.
- Contact us on WhatsApp to translate policy into a personal plan.
Understanding CPF and Interest Basics in Singapore
We break down the CPF system so you can see which funds help you today and which protect your future.
CPF accounts at a glance: Ordinary, Special, MediSave, and Retirement
The CPF has four main buckets during your working years: the Ordinary Account (for housing, insurance, and approved investments), the Special Account (for retirement growth), and MediSave (for healthcare). At age 55 your Retirement Account opens to provide monthly payouts.
Why these rules matter for housing, healthcare, and retirement
Choices about using CPF funds change your short‑term liquidity and long‑term savings. Use the Ordinary Account for property or approved loans, keep Special and the Retirement Account to grow your retirement nest egg, and reserve MediSave for medical needs.
“Policy floors give savers predictability even when markets shift.”
How interest is reviewed: Quarterly adjustments and market linkages
The Board reviews returns quarterly. The Ordinary Account links to short‑term figures from local banks, while the SMRA uses a 12‑month average of longer government yields plus a buffer. Floors are in place to protect core savings.
| Account | Primary use | How returns link |
|---|---|---|
| Ordinary Account | Housing, education, approved investments | Short‑term bank averages with a legislated floor |
| Special Account | Retirement growth | Longer government yields plus buffer |
| MediSave / Retirement Account | Healthcare and retirement payouts | 12‑month average of 10‑yr yields; annual RA review |
If you want a quick walkthrough of your allocations and potential savings by age and income, Whatsapp us for a discovery session.
oa interest rate: How It’s Set, The Current Floor, and What Affects It
We explain the mechanism that decides your ordinary account return so you can plan with confidence.
Current OA rate: 2.5% per annum and the legislated minimum
The ordinary account earns the higher of two measures: a legislated floor of 2.5 per annum or a bank‑based peg.
This guaranteed minimum protects core cpf savings when market deposit figures fall below that level.
Pegged formula: Three-month average from major local banks
The peg uses a three‑month average of figures reported by major local banks. It blends 80% fixed‑deposit and 20% savings components to mirror short‑term deposit conditions.
When the floor applies and what it means
When recent three‑month averages dip — for example around 0.45% in early 2025 — the legislated 2.5 per floor applies. That keeps your ordinary account at the higher minimum even if market deposit numbers soften.
“The floor ensures steady, tax‑exempt compounding on core cpf balances.”
Illustrative scenario and monthly crediting
Interest is computed monthly on your balance and credited so returns compound through the year.
| What | How it’s measured | Practical effect |
|---|---|---|
| Legislated floor | 2.5 per annum fixed | Protects savings during low deposit cycles |
| Bank peg | 3‑month avg of major local banks (80/20) | Reflects short‑term deposit conditions |
| Crediting | Monthly calculation | Steady compounding; tax‑exempt |
- Quick takeaway: The higher of the two applies — floor or peg — so your cpf interest is resilient.
- Want a personalised estimate using your balance and loan size? Whatsapp us for a discovery session.
Special, MediSave, and Retirement Accounts: 12-month average yield linkage
Long-term CPF accounts track a bond-based benchmark to smooth returns for retirement savers.
The special account, medisave account and retirement account use a 12-month average yield of the 10-year Singapore Government Securities plus 1% to set their long-term returns.
This average yield approach reduces short-term swings and keeps CPF savings predictable for planning.
SMRA formula and the 4% floor through 2025
SA, MA and the SMRA are pegged to the 12‑month average yield of 10‑year Singapore Government Securities plus 1%.
For Q2 and Q3 2025 the SMRA sits at 4.0% per annum, and the 4% floor is extended until 31 December 2025. That gives you a reliable medium-term anchor for retirement savings.
Retirement Account specifics
The retirement account earns a weighted portfolio return based on invested assets and is reviewed annually.
New RA inflows each year receive the 12‑month benchmark (10YSGS+1%) for that year, subject to the 4% per annum floor while it remains in place.
“The long-bond linkage helps combined CPF balances grow steadily without taking market risk.”
- Long bond link = smoothing: the 12‑month average yield reduces volatility.
- The 4% per annum floor through 2025 provides certainty for retirement planning.
- When the 10‑year curve moves, future SMRA and RA inflows can rise or fall with those yields.
If you’re unsure whether to top up SA or RA now, Whatsapp us for a discovery session and we’ll map options to your combined cpf balances and retirement goals.
Extra interest earned on combined CPF balances: Maximizing the first 60,000
Knowing how the first S$60,000 of combined CPF balances is formed helps you capture extra returns.
Below 55: Boost on the first S$60,000
If you are under 55, you earn an extra 1% per annum on the first S$60,000 of combined CPF balances.
The ordinary account portion that qualifies is capped at S$20,000. Any extra earned on the ordinary account is then credited to the special account.
Age 55 and above: Higher boosts on the first 60K
At 55+, the first S$30,000 gets an extra 2% and the next S$30,000 gets an extra 1% per annum.
When ordinary account amounts form part of these tiers, the extra on the ordinary account is credited to the retirement account.
Sequence rules and practical moves
The order that forms the first S$60,000 is: retirement account (including CPF LIFE premium), ordinary account up to S$20,000, special account, then medisave account.
This sequence matters. You can boost extra interest earned by topping up SA or RA so more of the first S$60,000 sits in higher-yielding buckets.
Worked examples: How extra interest is credited
| Scenario | Combined CPF balances | Portion earning extra | Where extra is credited |
|---|---|---|---|
| Under 55, OA S$25,000; SA S$20,000; MA S$15,000 | S$60,000 | First S$20,000 from OA; remaining S$40,000 from SA/MA | Extra on OA moves to SA; SA/MA get extra directly |
| 55+, RA S$10,000; OA S$20,000; SA S$20,000; MA S$10,000 | S$60,000 | First S$30,000 (RA+OA cap) get 2%; next S$30,000 get 1% | Extra on OA credited to RA; SA/MA receive their extra |
| Under 55, want to maximise extra | Top-up SA or move non-essential OA to SA | More of first S$60,000 sits in SA | Higher extra interest earned on those dollars |
- Practical tip: Small SA or RA top-ups early in the year can shift how much of your first S$60,000 gains boosted returns.
- Property owners: weigh keeping OA for mortgages against shifting funds to SA to pick up higher extra payouts.
If you want a walk-through of your combined cpf balances and how to boost extra interest, Whatsapp us for a discovery session.
Policy updates that shape your interest earned
Changes to salary ceilings and contribution bands will nudge CPF balances higher for many workers.
The monthly salary ceiling is rising in steps: S$6,300 (Sep 2023), S$6,800 (Jan 2024), S$7,400 (Jan 2025) and S$8,000 (Jan 2026).
That channels more regular pay into CPF contributions and boosts long-run compounding in your accounts. The annual ceiling stays at S$102,000, so total yearly contributions remain capped for high earners with large bonuses.
Senior worker contributions and retirement adequacy
Contribution rates for older workers increased from Jan 2024 and again in Jan 2025. For example, total contributions in 2025 reach about 32.5% for ages 55–60 and 23.5% for 60–65.
These higher contributions lift projected balances without asking you to take market risk. More savings in the special, medisave and retirement pots improve retirement adequacy over time.
- Payroll planning: Employers and contractors should adjust pay runs as ceilings approach S$8,000 in 2026.
- Cash flow: You can rebalance mortgage payments and voluntary top-ups to keep liquidity while growing cpf savings.
- Market link: Policy shifts interact with major local yields and the peg from major local banks, which helps determine cpf interest rates and expected returns.
Need a tailored projection based on your pay structure? Whatsapp us for a discovery session.
Strategies to grow OA, SA, MA, and RA balances over time
Timing and consistency are the two simplest levers to grow CPF balances over decades. We focus on practical moves you can make each year to boost retirement savings while keeping risk low.
Leverage compound interest: Start early, stay consistent
Compound growth works best with time. Even small monthly top‑ups add up over 10–20 years.
Keep regular contributions and check accounts annually to capture guaranteed CPF returns like the 2.5% ordinary account floor and the SMRA floor of 4.0% through 31 December 2025.
Voluntary cash top-ups (SA/RA): Interest and potential tax benefits
Top‑ups to the special account or retirement account raise the portion that earns higher, guaranteed returns. This can be more tax‑efficient than some market moves.
Tip: Use cash top‑ups for the first months of the year so new funds compound longer.
Timing matters: Why topping up in January can boost returns
Funds topped up in January get nearly a full year of credited returns. That small edge repeats every year and materially lifts retirement savings over time.
Investing considerations: Balancing risk vs. the guaranteed CPF return
Before moving money into higher‑risk assets, benchmark potential gains against CPF guarantees. For those near 55, extra interest earned can push some slices to as high as 6%.
We recommend keeping a protected core in CPF and using surplus cash for measured market exposure.
“Automate contributions, top up early in the year, and review balances around major life events.”
| Action | Why it helps | When to do it |
|---|---|---|
| Automate monthly contributions | Smooths savings and captures compounding | Year‑round |
| Top up SA/RA in January | Maximises credited returns for the year | January each year |
| Keep core in CPF; invest surplus | Protects guaranteed growth before taking market risk | After emergency fund is set |
- Practical plan: automate, schedule January top‑ups, review annually, rebalance at life events.
- Want a step‑by‑step action plan aligned to your goals? Whatsapp us for a discovery session.
Conclusion
Knowing how policy floors and bond linkages work lets you make practical saving moves.
The OA remains at 2.5% per annum while the SMRA sits at 4.0% with the 4% floor extended to 31 December 2025.
SMRA returns are pegged to the 12-month average yield of the 10-year Singapore Government Securities plus 1%, so the yield 10-year link offers predictable long-term growth backed by the singapore government.
Extra payouts on the first S$60,000 and quarterly reviews mean your CPF can compound more quickly if you time top-ups and match liquidity to goals.
For a personalised plan and clear next steps, Whatsapp us for a discovery session or learn when to move funds by reading when to transfer CPF OA to.
FAQ
What is the Ordinary Account (OA) interest and how is it set?
The OA earns a minimum of 2.5% per annum by law. The final credited figure is linked to a benchmark formula that uses a three‑month average of major local banks’ deposit and savings yields (80% fixed deposit + 20% savings). When that blended bank average falls below the legal floor, OA stays at 2.5%.
How do CPF Special, MediSave and Retirement accounts earn returns?
These accounts follow a formula tied to the 12‑month average yield of the 10‑year Singapore Government Securities plus 1%. There is currently a temporary 4% floor that applies through end‑2025, protecting returns if market yields are low.
What is the 12‑month average yield and why does it matter?
The 12‑month average yield smooths short‑term swings in the 10‑year Singapore Government Securities yield. It determines the minimum portfolio rate used for Special, MediSave and Retirement accounts, so it directly affects the long‑term growth of those balances.
What extra interest can I get on combined CPF balances?
Extra interest is applied to incentivize savings. If you’re under 55, you receive an additional 1% on the first S,000 of combined balances (with OA capped at S,000 for that extra). Once you reach 55, the extra becomes 2% on the first S,000 and 1% on the next S,000.
How are extra interest amounts allocated between CPF accounts?
Sequence rules dictate allocation: Retirement Account (RA) is credited first, then OA up to its cap, followed by Special Account (SA) and MediSave Account (MA). This ensures the extra yields boost your retirement nest egg before topping up other accounts.
How often are CPF rates reviewed and adjusted?
CPF rates are reviewed regularly and can be adjusted to reflect market conditions. OA benchmarking uses a three‑month moving average, while SMRA‑linked rates use a 12‑month average. Policy changes or temporary floors can also be announced to stabilise returns.
How does the 10‑year Singapore Government Securities yield affect my CPF returns?
The 10‑year yield is the reference for the 12‑month average that determines SMRA‑linked returns. When the yield rises, the average increases and boosts returns for SA, MA and RA. When it falls, the 12‑month smoothing limits abrupt changes, and floors may apply to protect savers.
Can I increase my CPF balances to earn more guaranteed returns?
Yes. Voluntary cash top‑ups to SA or RA increase the base that earns the guaranteed, government‑linked returns. Starting early and topping up consistently leverages compound growth. Consider tax relief rules and the annual limits when planning top‑ups.
Are there timing benefits to when I top up my CPF accounts?
Timing matters. Topping up earlier in the year gives your money more months to earn credited returns. Many people top up in January to maximise that year’s compounded growth, but always weigh liquidity needs and tax considerations.
How do workplace and policy changes affect CPF savings?
Changes like a rising salary ceiling or higher employer contribution rates for older workers raise the maximum CPF contributions you can accumulate. This impacts how quickly OA, SA, MA and RA balances grow and can improve retirement adequacy over time.
What is the illustrative impact of OA credited monthly versus annually?
CPF credits are typically applied monthly or quarterly depending on account rules. Monthly crediting slightly increases effective yield through intra‑year compounding compared with a single annual credit, so earlier and more frequent credits benefit savers modestly.
How do I compare CPF guaranteed yields with bank products?
CPF returns are government‑backed and meant to be conservative and stable. Compare the blended bank benchmark (80% fixed deposit + 20% savings) to see how commercial products perform, but remember CPF yields include policy floors and extra rates for retirement protection.
Where can I find the current figures for OA, SA, MA and RA yields?
The Ministry of Manpower and the CPF Board publish prevailing rates, formula explanations and any temporary floors or policy updates. Check their official websites for the most up‑to‑date, authoritative information.
