How is CPF interest calculated — is it monthly or yearly?

CPF Interest Calculation Frequency

CPF interest is calculated monthly but credited to your accounts annually in January of the following year. This monthly calculation is crucial because it allows interest to compound throughout the year.

Monthly Calculation and Crediting

Interest is calculated based on the lowest balance in the account for that specific month. For example, if you make a contribution or withdrawal mid-month, the interest for that month is calculated on the balance present for the majority of the period, or prorated based on the daily balance, depending on the specific transaction timing. The interest earned each month is then compounded onto the principal balance in January of the subsequent year.

Interest Rates Applied

Different accounts earn different base rates:

• Ordinary Account (OA): Earns a minimum of 2.5% per annum.
• Special Account (SA) / Retirement Account (RA): Earns a minimum of 4% per annum. For 2025, the RA is guaranteed a minimum of 4% floor (as per the knowledge provided, the SMRA rate is set at 4% for 2025).
• Medisave Account (MA): Earns a minimum of 4% per annum.

Extra Interest

CPF members aged 55 and above receive additional interest on their first $60,000 of combined CPF balances ($30,000 from OA, and the rest from MA/SA/RA).

• An extra 1% interest is paid on the first $20,000 of OA balances (on top of the base 2.5%, resulting in 3.5% on this portion).
• An extra 1% interest is paid on the first $30,000 of MA/SA/RA balances (on top of the base 4%, resulting in 5% on this portion).

This monthly calculation and annual crediting ensures that your CPF savings benefit from compounding throughout the year, maximizing growth within the CPF framework.