Updated: 09/27/2012 02:35 | By Channel NewsAsia

CPF extends 4% interest rate till Dec 2013

SINGAPORE: The Central Provident Fund Board (CPF) is extending its minimum four per cent annual interest rate for Special, Medisave and Retirement Account (SMRA) holders for another year because of the clouded economic outlook.

"In view of the continuing uncertainty in the global economy and low interest rate environment," the four per cent floor rate for SMRA will be extended until Dec 31, 2013, the pension fund said in a statement.

After December 2013, the SMRA rates will be pegged to the 12—month average yield of 10—year Singapore Government Securities (SGS), plus one per cent.

The current yield for a 10—year SGS with a coupon of 3.125 per cent expiring in September 2022 stands at 1.439 per cent.

With the four per cent minimum extension, the first S$60,000 of a member’s combined balances in SMRA will continue to earn a five per cent interest rate.

— CNA/fa