CPF Interest Calculation

[fr33d0m]

Discussion about interest calculation

For me, my own calculation of MA interest is only 1 cent different.

Formula as

=ROUNDDOWN(SUM(Jan to June balance)/12 * 0.04 + SUM(July to Sept balance) / 12 * 0.0401 + SUM(Oct to Dec balance) / 12 * 0.0404, 2)

month balance is calculated as the lowest balance of any time within the month. If contribution is before deduction, only the difference is reduced if deduction is more than contribution, or 0 deducted

However, my SA interest difference is more than $2. Same formula with additional 60K for extra 1%

=ROUNDDOWN(SUM(Jan to June balance)/12 * 0.04 + SUM(July to Sept balance) / 12 * 0.0401 + SUM(Oct to Dec balance) / 12 * 0.0404, 2) + 60000 * 0.01

ETA:

adding kehyi4's formula, it works for me and for the past few years, too

MA = ROUND(month balance * MA interest rate / 12, 2) then sum for all 12 months
SA = ROUND(month balance * SA interest rate / 12, 2) then sum for all 12 months + 60000 * 0.01
OA = ROUND(month balance * OA interest rate / 12, 2) then sum for all 12 months

MA interest rate for 2023: Jan - June 4%, July - Sept: 4.01%, Oct - Dec:4.04%
SA interest rate for 2023: Jan - June 4%, July - Sept: 4.01%, Oct - Dec:4.04%
OA interest rate for 2023: 2.5%

month balance is the lowest balance within the month

 

[kehyi4]

i did my calculation month by month separately, rounded to 2 decimal places, then added them up. i think this method reduces the incidence of rounding errors and might help eliminate the 1 cent variance that you experienced

and in case you're wondering, my result was accurate to the cent for all accounts

 

[fr33d0m]

Thanks. How is your SA calculation? Rounding can't explain more than $2 difference.

 

[epigram]

Oh. Interest is in quickly this year

 

[reddevil0728]

Oh. Interest is in quickly this year

hmm it has always been in by this time no?

 

[fr33d0m]

I think I figured out what went wrong with SA interest, as well as OA interest. Due to the raise of cap for salary eligible for CPF since this Sept, earlier contribution for Bonus was adjusted retrospectively instead. With this adjustment and rounding month by month, I got exact the same interest as CPF credited.

 

[a4973]

i did my calculation month by month separately, rounded to 2 decimal places, then added them up. i think this method reduces the incidence of rounding errors and might help eliminate the 1 cent variance that you experienced

and in case you're wondering, my result was accurate to the cent for all accounts

Followed your method of calculating, my calculated results is lesser by 71 cents.

 

[kehyi4]

yeah, last yr's cpf interest calculation was complicated by:
1) change in SMA interest from 4 to 4.01 (jul to sep) then 4.04 (oct to dec)
2) change in CPF Ordinary Wage ceiling from 6k to 6.3k in Sep

-_-

 

[DevilPlate]

Wah piang…i never calculate my cpf interest sia….

 

[reddevil0728]

Wah piang…i never calculate my cpf interest sia….

why need. unless you got specific objective, they wouldn't cheat u 1 la.

some ppl just curious about such stuff