Best ways to invest under the SRS

It’s no secret that Singapore is facing challenges with its greying population. In fact, by 2030, around 1 in 4 Singaporeans will be aged 65 or above, up from 1 in 10 in 2010. Couple that with the rising cost of living, including increased healthcare costs, and we’ve got a recipe for disaster.

Before you raise your pitchforks at the Government and demand they do something about this, know that there are schemes in place to help alleviate some of these issues. And no, I’m not talking about CPF. In fact, move aside CPF—because the Supplementary Retirement Scheme (SRS) is an attractive option that can potentially give you more returns and, consequently, a cozier retirement.

SRS-ly, you might want to consider opting into this voluntary scheme. Let’s give you the deeds:

What is the SRS?

As mentioned, the SRS is a voluntary scheme that complements your CPF. It essentially allows you to save more for your golden years by offering dollar-for-dollar tax relief when you contribute funds to the SRS. This plan is particularly useful for those who want to supplement their CPF savings and potentially enjoy greater flexibility and higher returns.

For a more detailed guide on the SRS, click here.

How does the SRS work?

When you put money into your SRS, these savings are essentially protected from paying tax. Your SRS savings will then go on to earn 0.05% interest p.a., Alternatively, if you choose to invest them, you can enjoy higher, tax-free returns—more on that later.

As of 2025, the annual contribution limits to the SRS are:

Singaporeans/Permanent Residents – S$15,300
Foreigners – S$35,700

Take note that your SRS funds are meant to be used for retirement, so you’re encouraged to withdraw them from the age of 63 (or whichever the statutory retirement age is). And while contributions are tax-deductible, withdrawals are taxed, though only 50% of the amount withdrawn is subject to tax.

Should you choose to withdraw before the retirement age, those funds will be subject to a 5% penalty, and 100% of the sum will be taxed.

Protip: Open an SRS account before 1 Jul 2026 to lock in the retirement age of 63, so you can enjoy penalty-free withdrawals at 63 instead of 64.

In short, the SRS helps you save more for retirement, while also giving you immediate tax benefits.

ALSO READ: Here’s How Much You Should Earn for the Supplementary Retirement Scheme to Make Sense

How can I invest my SRS?

Investing your SRS is a great way to maximise your funds, rather than letting them sit in the account earning a meager 0.05% interest p.a. Here are some of the investment options available to you:

1. Fixed deposits

For all the financial newbies out there looking to get into investing, fixed deposits are a solid and safe option. They offer a risk-free way to grow your savings and provide a fixed return over a set period, typically ranging from a few months to several years.

Think of it like ordering a plate of chicken rice for lunch—you know exactly what to expect in terms of both price and taste. Similarly, with fixed deposits, you can be sure of the interest you’ll earn, and that your principal is guaranteed.

We’ve already done the heavy lifting for you and compiled a list of the best fixed deposit accounts, which you can find here.

2. Singapore Government Securities and Singapore Savings Bonds (SSBs)

Singapore Government Securities (SGS) are tradable government debt securities that pay fixed interest. Some examples include the SGS Bonds or the Treasury Bills (T-Bills).

Read the paragraph above twice and still don’t understand a thing? Think of it this way—you’re essentially lending money to the government, which then promises to pay you interest regularly and return your money at the end of the loan term. Because it’s the government borrowing from you, it’s considered very safe (duh!).

Meanwhile, Singapore Savings Bonds (SSBs) are similar to SGS in that they’re both low risk, but they offer more flexibility.

Here’s a rough table of comparison:

	Singapore Government Securities	Treasury Bills	Singapore Savings Bonds
Available Tenor	2 to 50 years	6 or 12 months	10 years
Min. Investment	S$1,000	S$1,000	S$500
Max. Investment	None	None	S$200,000
Payment of interest	Every 6 months	At maturity	Every 6 months

In short, all 3 investment methods are generally considered safe and stable, so if you’re just starting out, they offer a great way to get your feet wet with minimal risk.

3. Unit trusts

Not confident in your own investment decisions, or would you rather leave it to a pro who knows the ropes? A unit trust might be the way to go.

Unit trusts are investment funds managed by professionals, made up of contributions from both individual and corporate investors. These pooled resources are then invested in a variety of assets that align with specific objectives, such as geographical markets, industries, or asset types.

Of course, professional management doesn’t come for free. The fees associated with managing your SRS funds can eat into your potential returns. But if you’d rather have someone handle the heavy lifting for you, then go ahead and give it a try.

4. Foreign Currency Fixed Deposit

If your idea of taking advantage of exchange rates is a weekend trip to JB for groceries (hey, no judgment—we’ve all been there), then you might be missing out on a bigger opportunity.

As the name suggests, a foreign currency fixed deposit involves locking your funds in a fixed deposit account denominated in a foreign currency, such as US dollars, Euros, or Australian dollars. This option can be attractive due to the potential for higher interest rates in strong or appreciating currencies, as well as the opportunity to benefit from favorable exchange rate movements.

However, here’s the caveat: your investment is subject to exchange rate fluctuations. To reduce this risk, it’s a good idea to monitor global market trends and economic indicators before making your investment. Bank websites such as DBS and OCBC will also display the latest interest rates on foreign currency.

5. Endowment Insurance Plans

Endowment Insurance Plans help to kill 2 birds with 1 stone—they offer coverage against death and Total Permanent Disability while potentially helping you grow your retirement savings. These plans typically have a fixed term, where you make regular premium payments. At the end of the policy term, if you survive the duration, you receive a lump sum payout that includes the premiums you paid plus any investment returns.

There are several drawbacks, however, when considering an SRS endowment plan. First, the returns on these plans are often lower compared to other investment options, as the insurer prioritises safety and stability over high yields. Endowment plans also lock up your funds for the policy term, which may not suit those looking for more flexible or higher-return investments.

As usual, the advice here is that you should never park all your eggs in one basket. Endowment plans are a safe way to grow your SRS funds while having essential coverage, but look to diversify your investments in other areas to really maximise your returns.

6. ETFs

We’ve talked about diversification before, and Exchange-Traded Funds (ETFs) are a great way to spread your money across different assets, helping to reduce risk. An ETF is designed to track or mirror a specific market index (like the S&P 500), so its performance reflects the overall market, rather than relying on individual stocks. This gives you broad exposure without the need to pick each stock yourself.

Another benefit is that ETFs are often passively managed, meaning there’s no fund manager involved. As a result, you keep more of the returns, without the extra cost of a middleman. So, if you’re looking for a low-cost, hands-off way to invest with broad market exposure, ETFs could be a solid choice.

We’ve already compiled a list of the best ETFs that can help maximise your returns. Check them out here.

7. Stocks

For those who prefer a more hands-on approach and have decent market knowledge, investing in stocks is one of the ways that offers potential for higher returns. You can also make use of various brokerage platforms instead of investing directly with the banks your SRS funds are held in.

That being said, investing in stocks also comes with higher risk, as stock prices can be volatile and unpredictable in the short term. It’s important to carefully research and select companies or sectors you believe will perform well over time.

The key is to balance your risk tolerance with your long-term financial goals, as the stock market can yield higher returns but also exposes you to the potential for significant losses.

Choosing the best way to invest your SRS

If you’re looking for steady, low-risk returns, options like SSBs and ETFs are a good choice. However, if you’re a baller who leads a high-risk, high-reward lifestyle, the stock market might be the way to go.

Ultimately, any form of investment is better than letting your SRS funds sit idle in your account, especially with the low passive interest rate of just 0.05% p.a. So, whether you’re playing it safe or going all-in, make sure your money at least works harder than your snooze button.

Here’s Everything You Should Know About the Supplementary Retirement Scheme (SRS) Account

Here’s How Much You Should Earn for the Supplementary Retirement Scheme to Make Sense

What Happens To Your Cash When The US Federal Reserve Cuts Interest Rates?