The Central Provident Fund (CPF) interest rates are not fixed arbitrarily. They follow legislated formulas linked to market benchmarks, with guaranteed floors for certain accounts.
This note explains the mechanics for Ordinary Account (OA) and Special/Retirement/MediSave Accounts (SMRA).
Ordinary Account (OA) Interest Rate
| Feature | Detail |
|---|---|
| Guaranteed Floor | 2.5% per annum |
| Formula | 3-month average interest rate of major local banks |
| Review Frequency | Quarterly |
| Applicable Rate | Higher of (a) 2.5% or (b) the computed 3-month average bank rate |
Each quarter, CPF Board computes the average interest rate from Singapore’s major local banks over the preceding three months. This computed rate is compared against the 2.5% floor. Members receive the higher of the two for that quarter.
The OA rate can rise above 2.5% if bank rates exceed that threshold, but it will never fall below 2.5%.
Special, Retirement, and MediSave Accounts (SMRA)
| Feature | Detail |
|---|---|
| Guaranteed Floor | 4.0% only until 2026 (no permanent statutory floor thereafter) |
| Formula | 12-month average yield of 10-year Singapore Government Securities (SGS) bonds + 1% |
| Review Frequency | Quarterly |
| Applicable Rate | Higher of (a) 4.0% (temporary floor) or (b) the computed 12-month average SGS yield + 1% |
Each quarter, CPF Board computes the average yield of 10-year SGS bonds over the preceding 12 months, then adds 1%. This computed rate is compared against the 4.0% floor (which is guaranteed only through 2026). Members receive the higher of the two.
Example – Q4 2024:
The computed rate (12-month average 10-year SGS yield + 1%) rose to 4.14%, exceeding the 4.0% floor. Members therefore received 4.14% for that quarter.
From 2027 onward, there is no statutory guarantee that the SMRA rate cannot fall below 4.0%. The rate will be purely market-driven based on the SGS+1% formula.
Summary Comparison
| Account | Floor Rate | Floor Validity | Benchmark | Directional Potential |
|---|---|---|---|---|
| OA | 2.5% | Permanent | 3-month avg major local bank rates | Can go higher, cannot go lower |
| SMRA | 4.0% | Only until 2026 | 12-month avg 10-year SGS yield + 1% | Can go higher; may go lower after 2026 |
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Quarterly review cycle: CPF Board announces applicable rates before each quarter based on preceding period’s market data.
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No member action required: Rates are automatically applied to all CPF accounts.
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Post-2026 monitoring required: For SMRA, taxpayers and planners should monitor 10-year SGS yield trends as the 4.0% floor will expire.
Key Takeaway for Planning
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OA provides permanent downside protection at 2.5%, making it a stable base.
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SMRA currently benefits from a temporary 4.0% floor, but from 2027 onward, rates will float with long-term bond yields. If SGS yields fall significantly, SMRA interest could drop below 4.0%.
Source: CPF Board, 4 April 2026