🗓️ 21092025 1800
Singapore Investment Interest Rate Overview
| Investment Type | Interest Rate | Compounding | Risk Level | Liquidity | Tax Treatment |
|---|---|---|---|---|---|
| CPF OA | 2.5% + 1%* | Annual | None | Low (55+) | Tax-free |
| CPF SA/MA/RA | 4% + 1%* | Annual | None | Low (55+/62+) | Tax-free |
| SSB | 1.8-3.1% (step-up) | None (distributed) | None | High | Tax-free |
| T-Bills | 3-4% (market) | None (discount) | None | None (hold to maturity) | Tax-free |
| High-Yield Savings | 2-3% | Monthly/Daily | None | High | Taxable |
| Fixed Deposits | 1.5-2.5% | Annual | None | Low (penalty) | Taxable |
| Robo Advisors | 4-8% (expected) | Reinvested | Medium | Medium | Taxable |
| ETFs/Stocks | 6-10% (historical) | Reinvested | High | High | Taxable |
*Extra 1% on first S$60,000 combined CPF balance (under 55)
Interest Calculation Methods
For detailed calculation methods and formulas: See interest_calculation_methods
CPF Interest Calculation Deep Dive
Basic CPF Interest (Compounded Annually)
- OA: 2.5% per annum
- SA/MA/RA: 4% per annum
- Compounding: Interest earned each year is added to principal
Extra Interest (Under 55)
- 1% extra on first S$60,000 combined CPF balance
- OA cap: Maximum S$20,000 in OA earns extra interest
- Transfer rule: Extra interest on OA transferred to SA
Example CPF Calculation (Age 28)
Scenario: S$50,000 in OA, S$30,000 in SA
OA Interest:
- First S$20,000: (2.5% + 1%) = 3.5% = S$700
- Remaining S$30,000: 2.5% = S$750
- Total OA interest: S$1,450
SA Interest:
- First S$30,000: (4% + 1%) = 5% = S$1,500
- Total SA interest: S$1,500
Extra Interest Transfer: S$700 (extra OA interest) → transferred to SA Net Result: OA gets S$750, SA gets S$1,500 + S$700 = S$2,200
Tax Implications Cheatsheet
Tax-Free Investments
- CPF interest - All interest earned
- SSB interest - Government securities exemption
- T-Bills returns - Government securities exemption
- SRS investments - Tax-free while in account
Taxable Investments
- Bank savings interest - Added to income
- Fixed deposit interest - Added to income
- Stock dividends - Generally tax-free for individuals
- Capital gains - Tax-free for individuals (not trading business)
- Robo advisor returns - Dividends tax-free, interest taxable
Risk vs Return Matrix
Conservative (0-2% risk)
- CPF: 2.5-4% guaranteed
- SSB: 2-3% average, government guaranteed
- High-yield savings: 2-3%, bank guaranteed up to S$75k
Moderate (2-5% risk)
- Robo advisors: 4-6% expected, diversified portfolios
- Bond funds: 3-5% expected, interest rate risk
Aggressive (5%+ risk)
- Individual stocks: 0-15%+ potential, high volatility
- Growth ETFs: 6-10% historical, market risk
- REITs: 4-8% expected, property market risk
Liquidity Comparison
Immediate Access
- Savings accounts: Instant
- Current accounts: Instant
- Money market funds: 1-2 days
Short-term Lock-up
- Fixed deposits: 1 month - 5 years (penalty for early withdrawal)
- T-Bills: 6 months - 1 year (hold to maturity)
Medium-term Lock-up
- SSB: Up to 10 years (can redeem anytime without penalty)
- Robo advisors: No lock-up but recommended 3-5 years
Long-term Lock-up
- CPF: Until 55/65 years old
- SRS: Until 62 years old
Quick Decision Framework
For Emergency Fund (High Liquidity Needed)
- High-yield savings (2-3%, instant access)
- Money market funds (2-3%, 1-2 day access)
For Short-term Goals (1-2 years)
- T-Bills (3-4%, 6-12 months)
- Fixed deposits (2-3%, various terms)
For Medium-term Goals (2-10 years)
- SSB (2-3% average, flexible)
- Robo advisors (4-6% expected, moderate risk)
For Long-term Wealth Building (10+ years)
- CPF top-ups (4% guaranteed for SA)
- ETFs (6-8% historical, diversified)
- SRS investments (tax benefits + growth potential)
For Tax Optimization
- Max SRS contribution (S$15,300/year for residents)
- CPF voluntary contributions (guaranteed 2.5-4% + tax relief)
- Government securities (tax-free interest)