How is the extra 1% interest calculated in CPF?

From my understanding CPF pays additional 1% interest for the first $60k combined balances with up to $20k from the OA. Does this mean that the first $20k in OA gets 3.5% and the first $40k in SA gets 5%?

For illustrative purposes, assuming I have $50k in OA and $50k in SA respectively, does this mean I would earn $1450 (700+750) interest from my OA and $2400 (2000+400) interest from my SA?

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Welson Lee

08 Apr 2022

Hi, regarding the extra 1% interest for first $60K, I understand that it is capped at extra 1% for first $20K in OA.

Thus, back to OP's example on $50k in OA & $50K in SA, assuming i do a full transfer from OA to SA (i.e. now $0 in OA & $100K in SA), does it mean that I would earn $4600 (3000 + 1600) interest from my SA?

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Geraldo L.

03 Mar 2020

Your calculations are correct. FYI the additional 1% of interest from your OA will go into your SA account.

CPF interest flow:

Year 1

OA Balance $50k

First $20k @ 3.5% interest - $700 ($500 goes into OA, $200 goes into SA)
Next $30k @ 2.5% interest - $750

SA Balance $50k

First $40k @ 5% interest - $2,000
Next $10k @ 4% interest - $400

Year 2

OA Balance $50k + $1,250

First $20k @ 3.5% interest - $700 ($500 goes into OA, $200 goes into SA)
Next $30k + $1,250 @ 2.5% interest - $781.25

SA Balance $50k + $2,400

First $40k @ 5% interest - $2,000
Next $10k + $2,400 @ 4% interest - $496

Note: CPF OA 1% additional interest goes in SA to earn 4% interest in the next year. CPF SA 1% additional interest remains in SA to earn 4% interest in the next year.

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