The CPF is giving us a HIGHER savings rate

From 1 Mar 1986 to 30 June 1999, the formula to compute the calculated rate is 50% fixed deposit rate and 50% savings rate of the average of the big 4 local banks over the preceding relevant 6 months.

From 1 July 1999 to present, the formula to compute the calculated rate is 80% fixed deposit rate and 20% savings rate of the average of the major local banks over the preceding relevant 3 months.

From 1 Jan 2008, savings in the Special, Medisave and Retirement Accounts is pegged to the 12-month average yield of the 10-year Singapore Government Securities (10YSGS) plus 1%.

Current fixed deposit rates are 0.21% and 10 year SGS rates is 1.93%. If you look at the document, the government have been giving us more than the benchmark They are following

CPF in their eyes is meant to be risk free savings and not for retirement. Hope this address the narrative.

[CPF Rates]

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Kyith

Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.

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