We all know that we earn 2.5% interest for our CPF ordinary account and 4% for the special and medisave accounts.
While flipping through the MAS Annual Report 2006/2007, I noted that in 2006, the interest credited to CPF members’ balances is a total of $3,926.8 million (yes, that’s close to $4 billion). This figure is also available from the CPF Annual Report.
Let’s assume that the interest is calculated purely based on the previous year’s balances (i.e. 2005), which is $111,873.8 million (yes, this is almost $112 billion). This means CPF paid out an effective interest rate of 3.28%.
In fact, for the 5 consecutive years from 2002 to 2006 inclusive, I calculated that the average effective interest rate is 3.24%.
This is a nice number! It’s very close to 3.25%, which is the average of 2.5% and 4% – the interest rates of ordinary and special/medisave.
Does this mean that the average CPF member has almost an equal balance amount in his ordinary account as there is in his special & medisave accounts combined?
Nonetheless, you might be interested in calculating the effective interest rate you will get from CPF. Just enter your ordinary, special and medisave balances here: