One of Lee Hsien Loong’s biggest failures: CPF Interest Rate

The CPF interest rate is one of the most important aspect for Singaporeans to achieve retirement. It’s role is not only to beat inflation, but also to grow a fund for a decent and dignified retirement. Through a compulsory monthly contribution, many Singaporeans are able to gather a large sum of CPF and there were hardly any problems with retiring in Singapore during the 1980s and 1990s.

The list of interest rate under 3 different Prime Ministers is found respectively on this CPF link [Source].

This is the CPF interest rate during Lee Kuan Yew’s time when he was Prime Minister from 1965 to 1990.


CPF interest rate went as high as 6.5% during Lee Kuan Yew’s stewardship. It certainly beat inflation by at least 2% during the 1973 oil crisis. Those were the good times where putting cash in CPF certainly makes sense than investments in the stock market. Notice how the interest rates were rarely adjusted, it reflects LKY’s leadership as placing the people as priority regardless of the state of economy.

Then the next Prime Minister Goh Chok Tong, CPF interest rate’s performance were pretty decent averaging about 3.5% with a consistent up and down.


The returns look decent and there are consistent updates every 6 months to reflect the true state of the market. When times are good, interest rate were higher and Goh Chok Tong then ensured the people enjoy an interest rate higher than that of inflation rate. It was a very nimble and volatile approach like how Singaporeans were used to be given Singtel shares then.

Now we look at Lee Hsien Loong…tsk tsk tsk…

I wouldn’t bother with a screenshot because every single year, the Ordinary Account interest rate is 2.5%. This is even lower than the yearly inflation rate 2 to 4%.

Lee Hsien Loong was supposed to be a Mathematician [Source] from Cambridge, but why did he allow the interest rate to fall below that of a yearly inflation?


His excuse was of course mathematically blamed. Apparently he devised a formula for calculating CPF interest rate, and going by his magical formula, interest rate is always at its lowest [Source]. It has been a full 10 years since the interest rate were sitting on its mandatory minimum rate. The “formula” is not working at all, and its implications for Singaporeans is disastrous.

A person so good with numbers should know retirement will be impossible with such interest rates, especially when they fall short of inflation as I’ve highlighted in red above. There is no real return from the compulsory CPF. In fact it is such a bad idea putting your money with CPF, most Singaporeans are taking a risk with their retirement by putting their CPF in one of the many CPF-approved funds in the open market.

To make things worse, under Maths genius Lee Hsien Loong, Minimum Sum jumped 85% in the 10 years under his leadership.

min sum

This is world class calculation by the Mathematician. CPF interest rate stagnate while Minimum Sum keeps jumping.

The issue here is not about a Mathematician who can score straight As in Cambridge being a Prime Minister. How could any Prime Minister jeopardize his people’s retirement?

The severity of this issue is still at its infantile stage because we have only seen a decade of low interests today, and the effects can only be felt some 25 years down the road when Singaporeans in their 20s today retire. If Singaporeans in their 20s still vote for Lee Hsien Loong and his PAP administration, they have better buy their wheelchairs early while they could afford it.

Alex Tan Zhixiang


2 thoughts on “One of Lee Hsien Loong’s biggest failures: CPF Interest Rate

  1. Note that interest rates started falling around mid 1980s, right about the time when LKY had successfully put away his old comrades and reigned supreme. It was all him.

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