CPF Members to Continue Earning Extra Interest in Q2 2025

CPF members, regardless of age, will continue to receive additional interest on their savings. The extra interest structure is as follows:

• For members below 55 years old: They will earn an extra 1% interest on the first $60,000 of their combined CPF balances, with a cap of $20,000 for their Ordinary Account (OA).
• For members aged 55 and above: They will receive an additional 2% interest on the first $30,000 of their combined balances (capped at $20,000 for OA) and an extra 1% interest on the next $30,000.

This means that older CPF members, who are closer to or already in retirement, receive a higher boost in their savings, reinforcing the Government’s effort to support senior citizens in maintaining financial stability.

Allocation of Extra Interest

The additional interest earned on the OA balances will be redirected into either the member’s Special Account (SA) or Retirement Account (RA), further strengthening their long-term savings.

For those aged 55 and above who are enrolled in CPF Life, the extra interest will still be credited based on their combined CPF balances, including savings allocated for CPF Life. This ensures that retirees continue to see growth in their CPF funds, which provides them with lifelong monthly payouts from the age of 65.

CPF Life: Securing Retirement with Lifelong Payouts

CPF Life remains a cornerstone of Singapore’s retirement system, offering members monthly payouts for as long as they live. This annuity scheme ensures that retirees do not outlive their savings, providing a steady stream of income to support their retirement needs.

The continuation of extra interest rates in Q2 2025 will help CPF Life participants accumulate more savings, further securing their retirement income.

CPF Interest Rates in Q2 2025

In addition to the extra interest, the base interest rates for CPF savings will remain unchanged in the second quarter of 2025:

• Special, MediSave, and Retirement Accounts: Will continue to earn a floor rate of 4% per annum. This is because the pegged rate, which is based on the 12-month average yield of 10-year Singapore Government Securities plus 1%, has remained below the floor rate.
• Ordinary Account (OA): Will continue to earn the floor rate of 2.5% per annum, as the pegged rate remains below this level.

Impact on HDB Housing Loan Interest Rates

Since HDB housing loan interest rates are directly linked to CPF OA interest rates (pegged at 0.1% above OA rates), the concessionary interest rate for HDB housing loans will remain at 2.6% per annum in Q2 2025. This stability ensures that homeowners continue to enjoy predictable and manageable mortgage repayments.

What This Means for CPF Members

The continuation of extra interest rates and the maintenance of the floor interest rates offer CPF members a stable and reliable way to grow their retirement funds. Whether they are still accumulating savings or already receiving payouts from CPF Life, this policy ensures:

• Higher savings accumulation over time
• Greater financial security for retirees
• Stable housing loan rates for homeowners

With these measures in place, CPF members can plan their finances with confidence, knowing that their savings will continue to grow steadily in Q2 2025 and beyond.

Financial Tips to Maximize Your CPF Savings

1. Maximize Your CPF Contributions

• Voluntary top-ups to your Special Account (SA) or Retirement Account (RA) can help you earn higher interest (up to 4%).
• If you have excess funds, consider making CPF top-ups to take advantage of the extra interest in your CPF accounts.

2. Build an Emergency Fund

• Save at least 3-6 months’ worth of expenses to cover unexpected financial difficulties.
• Keep your emergency fund in a high-interest savings account or a fixed deposit for liquidity and growth.

3. Invest Wisely for Long-Term Growth

• Consider low-cost index funds, ETFs, or blue-chip stocks to build wealth over time.
• Ensure your portfolio is diversified to minimize risks.

4. Avoid Unnecessary Debt

• Pay off high-interest debts (e.g., credit cards) as quickly as possible.
• If taking a loan, compare interest rates and choose the most cost-effective option.

5. Plan for Retirement Early

• Take advantage of CPF Life to secure lifelong income.
• Supplement CPF savings with private retirement plans or endowment policies for added security.

6. Spend Below Your Means

• Follow the 50/30/20 rule:
  • 50% for needs (housing, food, bills)
  • 30% for wants (entertainment, shopping)
  • 20% for savings & investments

7. Review Your Insurance Coverage

• Ensure you have adequate health, life, and critical illness insurance to protect against unexpected events.
• If you’re a homeowner, review home insurance to safeguard your property.

8. Take Advantage of Government Schemes

• Utilize tax reliefs such as CPF top-up reliefs and SRS (Supplementary Retirement Scheme) contributions.
• Check for housing grants if planning to purchase an HDB flat.

9. Regularly Review Your Finances

• Set aside time every 3-6 months to check your budget, savings, investments, and debt levels.
• Adjust your financial plan based on life changes (e.g., marriage, children, career shifts).

10. Keep Learning About Finance

• Read books, attend financial workshops, or follow trusted finance professionals.
• Stay updated on changes in CPF policies, investment opportunities, and tax benefits.