My CPF balances consist of Medisave Account (MA), Retirement Account (RA) and Ordinary Account (OA). I have hit the maximum for MA and RA accounts. I still keep some balances in the Ordinary Account (that earns less interest compared with MA and RA). I have no more balance in the Special Account (SA).
Interest payment for Ordinary Account is 2.5%.
Interest payment for Medisave Account is 4.0%
Interest payment for Retirement Account is 4.0%.
Additional interest will be paid out to all CPF members: “An additional 1% interest is paid on the first $60,000 of a member’s combined balances, of which up to $20,000 comes from the Ordinary Account.”
Interest Yield of 3.3%
Looking at total interest earned in 2015 on CPF balances, this works out to about 3.3% p.a. on opening balances of 2015. (I had few transactions through the year.) By keeping money in CPF and not withdrawing had added a significant cash amount to my account. This rate of return with near zero risk is hard to achieve in this financial climate. It does make sense not to withdraw money from CPF and try to beat this kind of return on your own.
Additional interest from 1 January 2016
Starting this year, CPF members aged 55 and above get an extra 1% per year interest on their first $30,000 of combined CPF balances.
This extra 1% interest is on top of the existing additional interest to be paid out to all CPF members: “An additional 1% interest is paid on the first $60,000 of a member’s combined balances, of which up to $20,000 comes from the Ordinary Account.”
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