The SRS is a voluntary savings plan which is added to your involuntary savings plan, that is to say your Caisse Centrale de Prévoyance (CPF).

Parking your money in your CPF gives you the basic retirement income you need, but the SRS does more than that. You can contribute and channel your funds to SRS, and these SRS funds can be used to buy investments so you can take your wealth growth to the next level.

The best part is that SRS contributions are eligible for tax relief and you’ll be able to earn tax-free returns on your investment.

So where to start ? Let’s cut to the chase.

How does SRS work?

Open an SRS account

Diving into the technical details, the SRS account is not automatically opened for every Singaporean. To open an account, you must meet the following eligibility criteria.

You must be :

  • A Singapore Citizen, Singapore Permanent Resident (SPR) or foreigner earning any form of income can make SRS contributions in the current year and be;
  • At least 18 years old;
  • Not an undischarged bankrupt;
  • Do not have a mental disorder; and
  • Able to manage yourself and your affairs.

If you meet all of the eligibility criteria above, great! You are now one step closer to maximizing the benefits of having and contributing to an SRS account.

You can open your SRS account with one of the 3 banking operators (DBS, OCBC and UOB). Make your request via the online banking sites or the mobile applications of the banking operators. Some of these banks also offer promotions and rewards for applying for SRS with them, so be sure to watch out for those limited promotions as well!

Make contributions to your SNS

To use your SRS funds to purchase other investment products, you will first need to make contributions to your SRS account. The total actual amount to which you contribute in one year would also qualify for tax relief in the following tax year.

Below is an example provided by the Inland Revenue Authority of Singapore (IRAS).

IRAS organizational chart

Source: IRA

Some important points to note are that all SRS contributions must be paid by December 31 of the year, or by any deadline depending on your SRS operator (DBS, OCBC, UOB). This is to ensure that you would qualify for the tax relief the following year.

For Singaporeans and PRs, the maximum annual SRS contribution is capped at S$15,300. As for foreigners, the ceiling is higher, at 35,700 Singapore dollars.

You can make SRS contributions at any time and any frequency throughout the year, as long as it’s before the deadline. In addition, your employer can also contribute on your behalf. All SRS contributions must be in cash.

Can I make contributions to my SRS forever?

Elderly couple walking in the forest

You may continue to make contributions to your SRS account until you begin to make withdrawals from your account, on or after the statutory retirement age that prevailed when you

  • made your first SRS contribution; Where
  • for medical reasons.

Who is eligible for SRS tax relief?

people walking in the streets

All SRS contributions allow individuals to benefit from tax relief, which is good news.

However, this is subject to a few conditions.

First, make sure you are a tax resident in the tax year.

Another limitation of the SRS tax relief scheme is also that there is a personal income tax relief cap of $80,000 and this also applies to SRS contributions.

When you make contributions to your SRS, these funds are non-refundable. Therefore, it is essential that you do your calculations and ensure that you are actually able to benefit from the SRS tax relief and take advantage of the contribution to your SRS.

Apart from this limitation, most other SRS contributors should be able to benefit from the proposed tax relief. However, you will not receive SRS tax relief if

Your SRS account is suspended as of

  • December 31 of the contribution year; Where
  • The amount of this contribution is withdrawn from your SRS account during the same contribution year.

It may sound confusing, but rest assured that you will be eligible for SRS tax relief as long as you do not make any withdrawals.

Withdrawals from SRS

Unlike your CPF, you can withdraw funds from your SRS account at any time, making it more flexible than the old one.

However, withdrawal amounts are subject to tax and applicable tax rates would be determined based on the circumstances of your withdrawal. For easier understanding, you can refer to the table below for SRS withdrawal types.

Withdrawal type Amount subject to tax 5% penalty fee?
Withdrawal at or after the prescribed retirement age 50% of the withdrawal amount Nope
Withdrawal for medical reasons 50% of the withdrawal amount Nope
Full withdrawal due to terminal illness 50% of the withdrawal amount minus a waived amount of up to USD 400,000 Nope
In the event of bankruptcy 100% of the withdrawal amount Nope
Advance payments before the prescribed retirement age 100% of the withdrawal amount Yes

An important factor to note is that there is a 5% penalty fee imposed on any withdrawal made before the prescribed retirement age, reinforcing the CPF Board’s ideal of the SRS account as a pension scheme.

What can I invest in using SRS?

Trading charts on a computer

Now let’s get to the interesting part. What can you invest in with your SRS funds? SRS gives individuals the freedom to invest in a wide range of investment products and instruments, helping you grow your wealth and retirement capital.

Investment products approved by the SRS include the following:

  • Shares
  • Obligations
  • Exchange Traded Funds (ETFs)
  • Real Estate Investment Trust (REIT)
  • Mutual fund
  • Fixed deposits
  • Regular Stock Savings (RSS)
  • Insurance
  • Singapore Government Securities (SGS)
  • Robo-advisors

No one wants to see their hard-earned money wasted on investments that don’t perform well. There are so many investment instruments you can invest in, including the Singapore Savings Bond (SSB), or stocks and ETFs on online brokers.

Investing in products like stocks that are prone to volatile market fluctuations can give investors less stability, but also offer potentially attractive returns and rewards. On the other hand, safer investments such as fixed deposits and bonds may not give the aggressive investor the returns they were looking for.

Since cash and investments purchased with SRS funds can only be withdrawn after the prescribed retirement age, we recommend that you choose to invest in a medium to long-term investment product for performance and optimal results.

Anyway, since every investor has a different risk appetite and profile, it all depends on your own preferences and financial lifestyle on which investment instruments you want to invest in and which one you want to invest in. best suits.

How to Maximize Your SRS Account

With your hard-earned money paid into your SRS account, you wouldn’t want to lose it and sit idle. To best maximize the funds in your SRS account, you should not let your deposits stay in your SRS account, as the interest rates charged on your SRS funds follow the low default interest rate of 0.05%.

How can you maximize the funds in your SRS account?

Businessmen discussing

First, be sure to invest your SRS funds in investment vehicles to help drive the growth of your portfolio and wealth. Since there are so many approved SRS investments, you can feel free to take your pick. Robo-advisors, such as Endowus and StashAway are approved and you can directly invest in a wide range of portfolios customized for you with your SRS funds on the robo-advisor platforms themselves.

For any uninvested funds, it would be good not to leave them idle as well, otherwise you better deposit your funds into your CPF account, which pays a much higher rate of 4% per annum.

You might consider placing the remaining uninvested funds in your SRS account into cash management accounts, which have potential returns of up to 2%, also far exceeding the default SRS rate of 0.05%. These cash management accounts offer high liquidity and much lower risk compared to typical investment vehicles, and can be great options for those looking for security in their investments.

Is investing using SRS worth it?

Elderly couple sitting by the sea

Certainly, parking your funds in your SRS account can bring you benefits, and one of the most important is surely your savings on your income tax. Every penny you contribute to your SRS account is tax deductible, which can help you save a lot of money, while contributing to your retirement nest egg.


In conclusion, the SRS is a government program that aims to help everyone in Singapore build their nest egg comfortably as the population ages. The CPF can provide Singaporeans with basic retirement income, but investing with SRS funds is a great alternative for tax relief. With so many choices of investment vehicles to choose from, your SRS funds can also be leveraged to help you grow your wealth with peace of mind.

Read also :