CPF Special, MediSave, and Retirement accounts’ interest rate drops to 4% in Q1 2025

SINGAPORE: The interest rate for Central Provident Fund (CPF) Special, MediSave, and Retirement accounts will decrease to 4 per cent per annum for the first quarter of 2025.

This marks the first reduction after two consecutive quarterly increases, down from 4.14 per cent in the previous quarter.

The decline in the interest rate is attributed to a decrease in the 12-month average yield of 10-year Singapore Government Securities, as explained by the CPF Board, Housing & Development Board (HDB), and the Ministry of Health (MOH) in a joint release on Wednesday (11 December).

From 1 January to 31 March 2025, savings in these accounts will earn an interest rate of 4 per cent annually.

Meanwhile, the Ordinary Account (OA) interest rate will remain unchanged at 2.5 per cent for the same period.

The concessionary interest rate for HDB housing loans, pegged at 0.1 per cent above the OA rate, will also remain steady at 2.6 per cent.

To support retirement savings, CPF members will continue to earn additional interest on their balances.

Members under 55 will receive an extra 1 per cent interest on the first S$60,000 of their combined balances, with a cap of S$20,000 on the OA.

Members aged 55 and older will earn an additional 2 per cent interest on the first S$30,000 of their combined balances, and 1 per cent interest on the next S$30,000, also capped at S$20,000 for the OA.

The extra interest earned on OA balances will be directed to the Special or Retirement Accounts.

Members who are 55 and above and participate in the CPF LIFE scheme will continue to earn the extra interest on their combined CPF balances, including the savings allocated for CPF LIFE.

Increase in Basic Healthcare Sum (BHS)

In addition, the authorities have announced an increase in the Basic Healthcare Sum (BHS) for 2025.

From 1 January, the BHS for CPF members under 65 will rise from S$71,500 to S$75,500.

Those turning 65 in 2025 will have their BHS fixed at S$75,500, and it will not change thereafter.

For members aged 66 and above, their BHS has already been fixed and will remain unchanged.

The BHS is the estimated amount of savings required for basic subsidised healthcare needs in old age.

It is adjusted annually by MOH for those under 65 to account for the rising costs of MediSave use.

Members can contribute to their MediSave accounts up to their BHS, and any contributions exceeding this amount will be automatically transferred to other CPF accounts.

Members with less than the BHS are not required to top up their MediSave accounts and can still withdraw funds for approved medical expenses.