Economics
CPF raises Special and MediSave Account interest rate to 4.01% for Q3 2023, while Malaysia’s EPF declared dividend rate of 5.35% for 2022
The Central Provident Fund (CPF) and the Housing and Development Board (HDB) have announced that the interest rate for CPF’s Special and MediSave Account (SMA) will increase to 4.01% per annum for Q3 2023. However, some netizens criticized the increase, stating that it was only a 0.01% increment and barely noticeable in small CPF balances. In comparison, Malaysia’s Employees Provident Fund (EPF) declared higher dividend rates for conventional and syariah savings.

SINGAPORE — In a joint statement issued on Monday (29 May), The Central Provident Fund (CPF) and the Housing and Development Board (HDB) had announced that the interest rate for the CPF’s Special and MediSave Account (SMA) will increase to 4.01% per annum for Q3 2023.
The previous SMA interest rate was 4%, which means the increase will be merely 0.01%.
The statement stated that this is due to “increase in the 12-month average yield of 10-year Singapore Government Securities (10YSGS), which the SMA interest rate is pegged to.”
The Ordinary Account (OA) interest rate will remain unchanged at 2.5% for the same period, as the pegged OA rate remains below the floor rate of 2.5%.
The joint statement added that the Government is watching the interest rate environment closely to ensure that the CPF interest rate pegs “remain relevant in the prevailing operating environment” while taking into consideration the longer-term outlook.
CPF members below 55 will continue to earn an additional 1% interest on the first S$60,000 (US$44,400) of their combined balances, with a cap of $20,000 for the Ordinary Account (OA).
For CPF members aged 55 and above, the government provides an additional 2% interest on the first $30,000 of their combined balances, also capped at S$20,000 for the OA, and an additional 1% on the next S$30,000.
The concessionary interest rate for HDB housing loans, which is pegged at 0.1% above the OA interest rate, will remain unchanged at 2.6% per annum in Q3 this year.
The RA interest rate will be maintained at 4% per annum from 1 January 2023 to 31 December 2023, as announced on 29 November 2022.
Netizens called out the “petty” SMA interest rate increase
Some netizens remarked that it was not even a 0.1% increase, but merely 0.01%, sarcastically “thanked” the authorities for the small increment:
In addition, a comment highlighted that the 0.01% increase is barely noticeable in small CPF balances:
In light of inflation, a netizen argued that CPF contribution rates should be reduced or that CPF account holders should have the option to choose lower contribution rates, ranging from 5% to 20%, in exchange for lower interest rates.
“Wouldn’t such a system be better over govt payouts that covers a small part of tax raises in the short term, and lead to a cycle of increasing taxes, esp on middle income earners?”
Meanwhile in Malaysia…
In comparison, Malaysia’s Employees Provident Fund (EPF) declared a dividend rate of 5.35 % for Conventional Savings for 2022 in March this year, with a total payout amounting to RM45.44 billion (approximately USD 9.8 billion).
In 2022, Malaysia’s EPF declared dividends of 6.1% for conventional savings (for the year 2021) and 5.65% for syariah savings.

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