Additional Interest Rates for Low-income Groups' CPF Savings

Mr Gan Thiam Poh asked the Minister for Manpower whether additional interest rates can be given to the low income groups' CPF savings that will support their retirement needs.

Mrs Josephine Teo: The CPF system has a progressive interest rate structure that provides a higher effective interest rate to CPF members with lower balances.

Balances in the Ordinary Account earn 2.5% per annum, while those in the Special Account, Retirement Account, and Medisave Account earn 4% per annum. On top of this, an Extra Interest of 1% is paid on the first $60,000 of combined CPF balances. CPF members aged 55 and above also receive an Additional Extra Interest of 1% on the first $30,000 of their combined CPF balances. Therefore, CPF members with lower balances are earning a higher effective interest rate per annum on their CPF savings.

The Government also provides CPF top-ups to help low-wage Singaporeans build up their retirement savings, via the Workfare Income Supplement (WIS) Scheme. For example, eligible low-wage employees aged 45 to 54 receive up to $2,200 of WIS payouts a year, comprising of 60% in CPF top-ups and 40% in cash. Older workers receive even higher WIS payouts. In total, more than $650 million in WIS payouts were paid to over 400,000 low-wage workers in 2017, of which more than $400 million were credited into their CPF accounts.