Answer
CPF OA Interest Rate — How Much Does It Earn?
Your CPF Ordinary Account is probably your biggest housing piggy bank. Here's exactly what it earns, how extra interest works, and why that 2.5% matters more than you think when you buy property.
Answer: 2.5% per year (guaranteed floor). First $20K of OA gets an extra 1% (3.5% effective). Every dollar of CPF used for property must be refunded with 2.5% accrued interest when you sell.
CPF Interest Rates by Account
| Account | Base Rate | Extra Interest |
|---|---|---|
| Ordinary Account (OA) | 2.5% p.a. | +1% on first $20K |
| Special Account (SA) | 4.0% p.a. | +1% on first $60K combined |
| MediSave Account (MA) | 4.0% p.a. | +1% on first $60K combined |
| Retirement Account (RA) | 4.0% p.a. | +2% on first $30K (55+), +1% on next $30K |
Rates reviewed quarterly. The 2.5% OA floor has been in effect for decades.
How Extra Interest Works (Under 55)
CPF gives extra interest on your first chunk of balances. Here's how it stacks:
- • First $60K of combined balances: Extra 1% interest (with OA capped at $20K of this)
- • In practice: First $20K in OA earns 3.5% instead of 2.5%
- • The rest of OA: Earns the base 2.5%
- • Extra interest goes to SA (not OA) — so it doesn't help with housing directly
Why 2.5% Matters When You Buy Property
When you use CPF OA to pay for property (downpayment or monthly mortgage), every dollar used accrues interest at 2.5% per year. When you sell, you must refund the principal + all accrued interest back to your CPF OA.
| CPF Used for Property | Years Held | Accrued Interest to Refund |
|---|---|---|
| $200,000 | 5 years | ~$26,000 |
| $200,000 | 10 years | ~$56,000 |
| $200,000 | 15 years | ~$90,000 |
| $200,000 | 20 years | ~$128,000 |
Simplified illustration. Actual accrued interest depends on timing of each CPF withdrawal (downpayment + monthly payments over time).
The Opportunity Cost of Using CPF for Housing
CPF in your OA earns 2.5% guaranteed, risk-free. When you use it for property, you lose that compounding — and still have to refund it with 2.5% interest at sale. The real question is: could your cash earn more than 2.5% elsewhere?
- • If your mortgage rate is below 2.5%: Using CPF costs you more than paying cash (rare scenario now)
- • If your mortgage rate is above 2.5%: Using CPF is usually fine — the accrued interest is less than what you'd pay in bank interest on that amount
- • Bottom line: At current rates (3%+), using CPF for housing is reasonable. Just know how much the accrued interest adds up to when you sell.
Want to see how CPF accrued interest affects your sale proceeds?
Run your numbers through the pipeline calculator — it factors in CPF refund, accrued interest, and what you actually walk away with.
FAQ
What is the CPF OA interest rate?
The CPF Ordinary Account (OA) earns 2.5% per annum. This is the guaranteed minimum floor rate, reviewed quarterly by the CPF Board but unchanged for decades.
Does the CPF OA rate ever change?
The 2.5% is a legislated floor — it cannot go below this. The actual rate is pegged to the 3-month average of major local banks’ interest rates, but this formula has never produced a rate above the floor. So in practice, it’s been 2.5% for as long as anyone remembers.
What is the extra interest on CPF OA?
The first $20,000 in your OA earns an extra 1%, bringing it to 3.5%. On top of that, under-55 members get an additional 1% on the first $60,000 of combined CPF balances (with up to $20,000 from OA). This means some of your OA money effectively earns 3.5%.
Why does the CPF OA interest rate matter for property buyers?
When you use CPF for property, every dollar must be refunded with 2.5% accrued interest when you sell. The longer you hold the property, the more CPF claws back at sale. This accrued interest can add up to tens of thousands of dollars over 10-20 years.
Is 2.5% good compared to leaving money in a savings account?
2.5% guaranteed is better than most savings accounts (0.05%-0.5% base). But it’s lower than SA (4%) and MA (4%). If you don’t need OA for housing, some people transfer OA to SA for the higher rate — but that’s irreversible.
Related
- CPF Accrued Interest After 10 Years — see the actual numbers
- Buying Property with CPF — full guide on CPF for housing
- How Much CPF Can I Use for HDB? — limits and rules
- HDB to Condo Affordability Calculator
Last updated Feb 2026. CPF interest rates per CPF Board guidelines. This is informational, not financial advice.