srs investmentFor every Singaporean or permanent resident in Singapore, having a CPF account is compulsory. It is the government’s attempt to create a Singapore where the elders are financially capable. In the real practice, there are many factors that can make CPF alone is no longer sufficient. This is where SRS comes to the scene.


SRS or Supplementary Retirement Scheme is a government’s program which complements CPF by deferring tax. The main difference with CPF is that SRS is a voluntary program; meaning nobody is mandated to join the program.

How to participate is simple; create an SRS account and contribute to the SRS account. Since 2016, the SRS annual contribution cap is $15,300 for Singapore citizens and permanent residents, and $35,700 for foreigners. Those who make contribution will be granted tax savings based on the amount contributed.

Illustration 1

Without SRS ContributionWith $15,300 SRS Contribution
Chargeable Income50,00036,500
Income Tax1,250364.5
Tax Savings885.5


Illustration 2

Without SRS ContributionWith $15,300 SRS Contribution
Chargeable Income160,000144,700
Income Tax13.95011.655
Tax Savings2,295


Based on the illustrations, we can see that contributing to SRS reduces chargeable income which eventually results in lower tax. Since 2017, there is a $80,000 tax relief cap – meaning you cannot receive tax savings more than the number.

The benefit does not stop at tax relief, but there is also a tax-free investment gain and tax-free withdrawal for 50% of the amount withdrawn at age 65. For example, if someone earns 60,000 from investment using SRS funds, he will not be charged with tax – but when he turns 65 and wants to withdraw 60,000, he will be charged with tax but only for half of the amount withdrawn.

In terms of interest, SRS actually only grows 0.05% p.a., similar to ordinary bank savings interest. Imagine how small you will get after years of nesting your SRS funds. If your target is to grow wealth, doing nothing is clearly not an option.


Since SRS funds can only be withdrawn at payout eligibility age, you actually have plenty of time to turn your SRS funds into a nest egg. There are quite a lot of SRS products that you can choose.

If you are one of those who are weighing which SRS investment option is the most suitable for you, here is the breakdown based on whether you are the conservative type or the risk taker one.


Being a conservative investor it means you prefer to keep it slow but steady to avoid huge loss. We have recapped some SRS products that we think are suitable for you.

1.Fixed Deposits

This is the simplest way of investing your SRS funds. The interest rate is not as huge as other options. OCBC, for example, offers returns up to 0.65% per annum for fixed tenure up to 36 months. DBS with fixed tenure up to 60 months offers returns up to 1.35% p.a.  The rates might not be as fruitful as other types of investment, but it is still better than just letting your SRS sit still with only 0.05% rate per year.

2. Single Premium Insurances/Endowments

Single premium endowment is another option for conservative investors because this plan tends to have lower risks. One of the banks which have endowment plan that can be paid with SRS funds is OCBC with PrimeGold Bonus 2. Whichever endowment plan you choose, keep in mind that insurance programs allowed for SRS are only the single premiums.

3. Unit Trusts

Some may disagree that Unit Trusts is suitable for conservative investment, but when done correctly this is actually a pretty safe option with lower risks. Unit Trusts work by the investor trusting their money to a financial company or institution which acts as the trustee who will then manage the money.

4. Bond

Bonds are the option for those who don’t mind receiving low returns as long as it’s not too risky and still gives higher returns than SRS’ 0.05% interest. There is Singapore Saving Bonds (SSB) which was created by the government, so that you can even be more certain about the safety.


Available options for those who want to gain higher returns are Index Funds, ETFs, Stocks, and REITs.

5. Index funds

Index funds are considered a simpler and more affordable option, but it gives you option to invest globally beyond geographical limit. How it works is by tracking an index and following its performance.

6. Stocks

Buying stocks does not require you to time the market. With help of a stock broker, you can invest using SRS funds.

7. Real Estate Investment Trusts (REITs)

Did you know that you cannot invest directly on property with SRS funds? Well, don’t worry there is also this method called REITs which allows you to invest on real estate through a manager or a trustee. Similar to unit trusts, the manager will be the one taking care of your money, and you will receive the returns.


Have you decided on which type of investor is more like you? And which investment product is more suitable for you?

Choosing an investment product cannot be taken lightly as it is a commitment which involves your financial life. Some who don’t understand might just innocently invest all the funds in one single product which is very risky because if that investment does not go well, then all the money is at risk. We need to remember that investment is not always about winning, sometimes we also suffer loss. It is important to choose one with good risk control.

Don’t choose the wrong path of investment life by consulting first with TheFinlens before deciding. We are the expert in the area and have handled a lot of clients. We help them achieve the potential in investment by showing them which one to choose, which one to do, and which one to avoid.

Leave your contact detail below, or click here so that we can design your investment plan based on your very own financial condition, not someone else’s.

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