Support My Efforts By Visiting The Advertisers


This is a personal blog. The opinions expressed here represent my own, not those of my employer and is not intended to malign any religion, ethnic group, club, organization, company, or individual.

Interest Rates

>> Wednesday, October 5, 2011

The CPF Board has announced that the minimum floor rate of 4% in the Special, Medisave and Retirement Account (SMRA) will be extended by another year to Dec 2012.

From 2008, the SMRA rate was announced to be pegged to the 12-month average yield of the 10-year Singapore
Government Securities (10YSGS) plus 1%, subject to a floor rate of 2.5% per annum.

However, the government had kept a floor rate of 4% till the end of 2009 in order to help people cope with the transition. Subsequently, the government extended the 4% floor rate for year 2010 and once more for this year, 2011.

This time round will be the third extension for year 2012.

If they had not kept the extension for the 4th year running, the average yield of the 10YSGS plus 1%, from 1
September 2010 to 31 August 2011, works out to be 3.30%, which is lower than 4%.

I suppose it will keep extending till the yield of 10YSGS plus 1% is close to, if not higher than 4%. This is of course great news, as with the additional 1% bonus interest, $60k in the CPF is enjoying government guaranteed
"risk-free" 5% returns.

On the flip side, a piece of bad news is DBS Group, Southeast Asia's largest lender, said it would cut interest rates for Singapore dollar deposit accounts from Oct 14.

From an insignificant 0.1% for most deposits, the decimal place will be shifted to become 0.05%. Percentage change wise, it is a stunning 50% cut! Those who are so risk adverse and still leave huge amounts in savings account, it is time to reassess the situation. This is a definite erosion of value with inflation stubbornly high and a clear signal that rates are not going to recover to near 1% levels any time soon.

Those aged 50 - 62 can consider transferring excess savings to CPF.




The owner of this blog does not share personal information with third-parties nor does the owner store information is collected about your visit for use other than to analyze content performance through the use of cookies, which you can turn off at anytime by modifying your Internet browser’s settings. The owner is not responsible for the republishing of the content found on this blog on other Web sites or media without permission.

Blog Comments

The owner of this blog reserves the right to edit or delete any comments submitted to this blog without notice due to;

1. Comments deemed to be spam or questionable spam
2. Comments including profanity
3. Comments containing language or concepts that could be deemed offensive
4. Comments that attack a person individually

Terms and Conditions

All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.

This policy is subject to change at anytime.

About This Blog

To promote the education of individuals for the need to have a healthy lifestyle and wealth management through proper financial planning, particularly in investments.

Top Blogs


Top Sites

  © Blogger templates Sunset by 2008

Back to TOP