Unchanged Cap on CPF Balances Earning Additional 1% Interest

Mr Kenneth Tiong Boon Kiat asked the Minister for Manpower (a) why has the $60,000 cap on CPF balances earning the additional 1% interest remained unchanged since 2008 when other major CPF parameters are revised regularly; (b) whether the Ministry will consider pegging growth of this cap to growth of Full Retirement Sum (FRS); and (c) how much interest do CPF members forgo annually because the cap has not tracked FRS growth.

The Government pays extra interest on Central Provident Fund (CPF) balances up to a cap to help members boost their retirement savings through compounding interest. Since 2008, 1% extra interest has been paid on the first $60,000 of combined CPF balances. The Government enhanced this in 2016, paying an additional 1% of extra interest on the first $30,000 of CPF balances for all members aged 55 and above. This enables members with lower balances to benefit from a higher effective interest rate on their savings.

The CPF retirement sums, such as the Basic or Full Retirement Sums (BRS or FRS), are set independently based on the amount of savings needed to provide an adequate level of retirement payouts. It is therefore not accurate to link the balance cap to the growth in FRS quanta. As such, there is no interest forgone by CPF members.

The retirement sums guide members on how much to set aside based on their retirement needs. These are complemented by a comprehensive suite of measures implemented by the Government to help Singaporeans build their retirement savings. Over the years, we have introduced the Majulah Package and enhanced the Silver Support Scheme, Matched Retirement Savings Scheme, and Workfare Income Supplement. In Budget 2026, we have also announced a CPF Top-Up for older Singaporeans who have not met the BRS.