A guide to CPF interest rates for all accounts in 2025

The interest rate on Special , MediSave, and Retirement accounts of Central Provident Fund (CPF) will dip to 4% per annum in the first quarter of 2025.

Including your Ordinary Account, all these CPF accounts are essential for effective financial planning, from retirement, housing or family, let’s take a look at how these CPF interest rates come about, and how they have changed over the years. We’ll examine historical trends, discuss strategies to maximise returns and provide insights into the future outlook of CPF interest rates.

CPF interest rates: An overview

Your CPF accounts earn different interest rates, providing a foundation for your retirement savings. 

As of Dec 2024, the Ordinary Account (OA) offers a 2.5% per annum interest rate. 

The interest rate for Special, MediSave and Retirement Accounts is adjusted to 4.0% per annum from 1 January to 31 March 2025. 

The CPF Board cited the decrease was due to a fall in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), which the SMRA interest rate is pegged to.

One can boost your savings further with additional interest. If you’re below 55, you’ll earn an extra 1% on the first $60,000 of your combined CPF balances. For those 55 and above, the first $30,000 earns an additional 2%, and the next $30,000 earns an extra 1%.

CPF Ordinary Account (OA) interest rates

Your CPF OA (Ordinary Account) currently earns 2.5% interest p.a., which is the minimum guaranteed rate. 

The interest rates earned on the OA is a 3-month average of major local banks’ interest rates. Precisely, the benchmark rate is computed based, using the formula of 80% fixed deposit rates and 20% savings rates. Reviewed quarterly, this is subject to the legislated minimum interest of 2.5% p.a.

Yields on T-bills have been on a downtrend over the past year, and banks’ fixed deposit and savings rates have seen the same trend. Despite that, any change in OA interest rates in the near term is highly unlikely.

While the interest rates for CPF OA have remained the same, the government has increased the CPF monthly salary ceiling — which affects the maximum amount of CPF contributions you need to pay — in stages from $6,000 to $8,000 by 2026. 

The higher salary ceiling started on 1 Sep 2023 (increasing from $6,000 to $6,300), and will go up to $8,000 by 1 Jan 2026. This can mean more savings accumulating in your CPF OA over time.

Several factors influence your OA interest:

• For members below 55, an extra 1% interest is earned on the first $60,000 of combined CPF balances (capped at $20,000 for OA).
• Members 55 and above earn an additional 2% on the first $30,000 and 1% on the next $30,000 of combined balances.
• This extra interest is credited to your Special Account or Retirement Account to boost your retirement savings.

The OA interest rate plays a crucial role in your long-term financial planning, offering a stable, risk-free return on your CPF contributions. It's worth noting that interest earned is tax-exempt and credited monthly, providing a reliable foundation for your retirement strategy.

CPF Special Account (SA) and Medisave Account (MA) interest rates

CPF Special Account (SA) and MediSave Account (MA) currently earn an interest rate of 4.0% p.a. from 1 January to 31 March 2025. 

This rate is reviewed quarterly and computed based on the 12-month average yield of 10-year Singapore Government Securities plus 1%, subject to a floor rate of 4% per annum.

Extra interest

• If you're below 55, you'll receive an extra 1% interest on the first $60,000 of your combined CPF balances.
• If you're 55 and above, you'll earn an extra 2% interest on the first $30,000, and an extra 1% on the next $30,000.

This extra interest on your Ordinary Account balances will be credited to your Special Account or Retirement Account, boosting your retirement savings.

CPF Retirement Account (RA) interest rates

Your CPF Retirement Account (RA) offers an attractive interest rate of 4.0% p.a. from 1 January to 31 March 2025. 

This rate is reviewed quarterly and is based on the 12-month average yield of 10-year Singapore Government Securities plus 1%, subject to a floor rate of 4% per annum.

The RA interest rate surpasses that of other CPF accounts, helping you grow your retirement savings more effectively. Further contributing to your retirement, the government pays extra interest on the first $60,000 of your combined CPF balances, with up to $20,000 from your Ordinary Account.

It's worth noting that the 4% floor rate for Special, MediSave, and Retirement Account savings has been extended until 31 December 2025. This extension provides certainty on your CPF savings returns amidst volatile interest rate environments, ensuring your retirement funds continue to grow steadily.

CPF interest rates: Historical trends and future outlook

CPF interest rates have remained relatively stable over the years, providing a stable foundation for Singaporeans' retirement savings. The Ordinary Account (OA) has maintained a floor rate of 2.5% per annum since 1999, whilst the Special Account (SA) and MediSave Account (MA) have offered a minimum of 4% per annum since 2008.

These rates have historically outperformed many low-risk investments, making CPF an attractive option for risk-averse savers. While the interest rates have remained steady thus far, this does not mean that they will always be fixed. The future outlook for CPF interest rates is subject to various factors, including global economic conditions and monetary policies.

The interest rate cuts by the US Federal Reserve could influence Singapore's monetary policy, potentially affecting CPF rates. Additionally, the government’s decision to increase CPF contribution rates for older workers indicates a commitment to bolstering retirement savings, which may impact future interest rate decisions.

Prior to that, the government has also extended the 4% floor rate for SMRA savings until 31 December 2025, providing certainty amidst volatile interest rates. This extension helps you grow your retirement savings more effectively, ensuring you and your family a stable financial future.

How to maximise your CPF interest earnings

The power of compound interest can significantly boost your CPF savings over time. Compound interest is the interest earned on interest, allowing your money to grow exponentially. 

With CPF interest rates of up to 5% per annum for those below 55 and up to 6% per annum for those 55 and above, your savings can multiply year after year. 

The earlier you start saving, the more time compound interest has to work its magic. For instance, if you begin saving $100 monthly at age 25 with a 4% annual return, you could accumulate over $116,000 by age 65. However, if you wait until 35, you'd need to save $170 monthly to achieve the same amount.

Making voluntary contributions is another effective strategy. Regular cash top-ups to your SA or RA can significantly increase your retirement savings through compound interest. Even small monthly contributions can make a substantial difference over time.

Consider making cash top-ups in January rather than December. Due to monthly interest compounding, with this, you can earn up to 20% more interest over a decade. These top-ups may provide tax relief benefits, further enhancing your financial position.

Stay informed

By leveraging the power of compound interest and implementing suitable approaches to your personal conditions, you can enhance your CPF savings over time. 

In fact, if we look at the evidence of historical returns, a globally diversified equity market over the long term has consistently delivered superior returns compared to the OA interest rates or T-bills, for example. 

Of course, the volatility of returns for the equity market is higher but the average returns are also higher thus fully justifying taking that risk to achieve higher returns. 

For those who are more conservative, even an allocation of 100% into a fixed income investment over the long term would have yielded more returns in excess of 2.5% during the same period, with significantly less volatility as shown in the chart.

The way to mitigate that volatility of returns is to invest for the long term and achieve the average returns. 

Start investing your CPF with Endowus — Singapore’s first and leading digital advisor for CPF investing — click here.

To learn more about optimising your CPF savings and investments, read more:

• How to be a CPF millionaire
• 5 things to know before investing your CPF
• Why homeowners should invest their CPF savings

‍