SRS vs CPF Top-Ups: Choosing the right tax-relief and retirement schemes

If you’re a Singaporean or PR staring at a year-end bonus in one of the world’s priciest cities, the big question is how to stretch it further—CPF top-up or SRS contribution? Mercer’s 2024 Cost of Living ranking keeps Singapore near the top globally, underscoring why optimising tax reliefs matters for households here. 

Under YA 2025 resident tax rates, income above $30,000 SGD  is taxed at 3.5%, scaling up through the brackets to 24% on chargeable income over $1,000,000 SGD  —with an overall personal relief cap of $80,000 SGD still in place. Smart use of CPF and SRS can materially reduce your bill.

Here’s the core trade-off:

• CPF top-ups (to SA/RA) earn a government-backed floor of 4% p.a.—a risk-free anchor for retirement savings.
• SRS contributions cut taxable income now and let you invest broadly (ETFs, unit trusts, etc.). But uninvested SRS cash earns just ~0.05% p.a., so you need to deploy it.

With MAS/MTI projecting 2025 core inflation around ~0.5%, leaving SRS funds idle erodes purchasing power, while CPF’s floor comfortably clears the inflation outlook. 

If you want flexibility and potentially higher long-term returns, invest your SRS promptly via your preferred platform.

In this guide, we’ll decode CPF vs SRS under 2025 rules, then walk you through a decision tree by income bracket so you know which lever to pull first—and how to combine both for maximum impact.

CPF top-ups: How they work

The Central Provident Fund (CPF) is the backbone of Singapore’s retirement system — a blend of mandatory savings and attractive guaranteed returns. Yet, many Singaporeans are unaware that voluntary CPF top-ups can also be a powerful tax and compounding strategy, especially at year-end when bonuses arrive.

Under the Retirement Sum Topping-Up (RSTU) Scheme, you can make cash top-ups to your Special Account (SA) if you’re below 55, or to your Retirement Account (RA) if you’re 55 and above. 

These top-ups not only accelerate your retirement savings, but also help you lower your taxable income — provided they meet the conditions set by the CPF Board and IRAS.

How CPF top-up tax relief works (YA 2025)

For the Year of Assessment 2025, CPF top-ups continue to be one of the most straightforward ways to trim your tax bill while building guaranteed wealth.

You can claim up to $16,000 SGD in CPF tax relief each year:

• $8,000 SGD for cash top-ups to your own SA or RA, and
• another $8,000 SGD for top-ups made to eligible loved ones (parents, grandparents, spouse, or siblings).

This relief is subject to the overall $80,000 SGD personal tax relief cap, and importantly, the cap is shared across all cash top-ups to SA/RA and MediSave (MA). 

In other words, if you’ve already made a MediSave top-up this year, that relief will count toward your total $16,000 SGD CPF top-up limit.

However, only cash top-ups qualify for tax relief — CPF transfers do not. And once you’ve topped up, it’s irreversible, so be sure you can part with those funds until retirement.

Key eligibility conditions

CPF and IRAS apply several qualifying rules to ensure fairness and to direct benefits to those saving for retirement:

• Relief applies only to top-ups up to the current Full Retirement Sum (FRS) — $213,000 SGD for members turning 55 in 2025.
• Recipients of top-ups do not receive tax relief; the relief applies to the person making the top-up.
• Spouse and sibling top-ups qualify only if the recipient earned $8,000 SGD or less in the preceding year, or is certified as handicapped (such as in cases of visual impairment, hearing loss, or dementia).
• Top-ups to employees or platform workers are deductible for employers, but the amount is included in the recipient’s taxable income. The employee still enjoys up to $8,000 SGD in personal top-up relief.
• From 1 January 2025, any top-up that attracts the Matched Retirement Savings Scheme (MRSS) government grant of up to $2,000 SGD per year will no longer be eligible for tax relief.

Retirement sums and contribution limits

These benchmarks determine how much you can top up, and how your CPF LIFE payouts are eventually calculated.

What you earn: 4% guaranteed, up to 6% for some

CPF continues to offer one of the best risk-free returns in Singapore’s fixed-income landscape.

Here’s the current rate structure (as of Q4 2025):

• 4% p.a. floor rate on SA and RA balances, extended until 31 December 2026.
• Extra 1% interest on the first $60,000 SGD of combined CPF balances (capped at $20,000 SGD from OA).
• An additional 1% on the first $30,000 SGD if you’re aged 55 and above — bringing effective returns on part of your funds to as high as 5–6% p.a.

CPF interest is calculated monthly and credited in January each year.

Crucially, cash top-ups begin earning interest from the first day of the following month after CPF receives your contribution — so if you top up on 28 December, you’ll only start accruing from 1 January.

2025 operational changes and practical tips

The CPF landscape is evolving to streamline retirement accounts and improve usability.

1. Special account (SA) closure for members 55 and above

From mid-January 2025, CPF will automatically close SA accounts once members reach 55. Balances will be transferred to the RA up to the FRS, with any excess moved to the Ordinary Account (OA). This change simplifies fund management and ensures savings are properly channelled toward retirement payouts.

2. Multiple ways to top up

You can make recurring cash top-ups via GIRO or one-time cash top-up via PayNow QR or OCBC Digital (CPF mobile app only). The top ups need to be done via the CPF website or CPF mobile app.

For year-end relief, CPF recommends making your top-up by the third week of December to ensure it’s credited in time for YA 2025.

3. Timing matters — the earlier, the better

Topping up in January rather than December can generate nearly 20% more interest over 10 years. The earlier your top-up is made, the longer your funds compound at CPF’s high guaranteed rate — so timing truly pays.

4. Investment option via CPFIS-SA

If you have over $40,000 SGD in your SA, you may invest the excess through the CPF Investment Scheme (CPFIS-SA). Options are limited to low- and moderate-risk instruments, such as approved bond or balanced unit trusts. 

Given the guaranteed 4% SA return, CPFIS is typically only considered by investors with a long-term risk appetite.

SRS contributions: How they work

While CPF top-ups are ideal for guaranteed, long-term compounding, the Supplementary Retirement Scheme (SRS) offers Singaporeans, Permanent Residents, and foreigners a more flexible path to retirement savings — one that blends immediate tax relief with investment-driven growth potential.

The SRS was introduced by the Ministry of Finance to encourage individuals to save beyond their CPF contributions. Unlike CPF, participation is voluntary, but its tax incentives and investment flexibility make it a popular year-end strategy for those looking to optimise their finances.

How SRS works

The SRS allows anyone aged 18 and above — who is not an undischarged bankrupt and capable of managing their affairs — to contribute cash into an account opened with one of the three approved operators: DBS, OCBC, or UOB. Each person can hold only one SRS account.

Contributions are made in cash and are eligible for tax relief (subject to overall $80,000 SGD personal tax relief cap) in the following Year of Assessment. The contribution cap depends on your residency status:

The investment edge

Unlike CPF, which is structured for guaranteed compounding, the SRS is designed for investment flexibility. Funds in the account can be invested in a wide spectrum of instruments, including:

• Unit trusts and ETFs
• Singapore Government Securities and bonds
• Individual stocks and REITs listed on SGX
• Fixed deposits, endowment policies, and structured products

Investment income and capital gains earned within the SRS are tax-deferred — meaning they are not taxed until you withdraw your funds. This deferral is particularly advantageous if you expect to be in a lower tax bracket upon retirement.

However, uninvested cash in your SRS account earns a nominal interest rate of just 0.05% per year, far below inflation. To make your SRS work for you, you should deploy the funds into a well-diversified portfolio.

Platforms like StashAway allow SRS-linked portfolios, giving investors access to global ETFs tracking indices such as the S&P 500; or earning low-risk cash return of up to 2.6% p.a.; and other investment schemes — all accessible directly through their SRS accounts.

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Withdrawals and taxation

Withdrawals from SRS accounts are subject to specific rules that determine how much of your funds will be taxed.

You can also spread your withdrawals over 10 years, giving you the flexibility to control your taxable income each year.

For instance, if you retire at 63 with $400,000 SGD in your SRS account and choose to withdraw $40,000 SGD annually, only $20,000 SGD per year will be taxable. With the current personal income tax exemption threshold of $20,000 SGD, your effective tax payable could be zero — a feature that makes SRS withdrawals highly tax-efficient.

Foreigners and SRS

SRS is particularly attractive for foreign professionals working in Singapore. Because foreigners enjoy a higher contribution cap of $35,700 SGD, they can maximise tax savings during their working years.

If a foreigner leaves Singapore permanently, they can apply for an early withdrawal after ten continuous years of participation, with 50% of the amount withdrawn taxed and no 5% penalty — provided they make a one-time full withdrawal. This rule often results in substantial tax efficiency for expatriates who leave Singapore before retirement age.

How to open and fund your SRS account

Opening an SRS account is straightforward and can be done online via any of the three approved banks. 

Once opened, you can make ad-hoc transfers or set up recurring contributions. Contributions are accepted until the bank’s year-end cut-off date (usually 31 December, 7 PM for most operators) to qualify for relief in that tax year.

Most Singaporeans fund their SRS accounts between November and December, but just like CPF, timing matters — investing early in the year gives your funds more time to compound.

When SRS makes the most sense

SRS is best suited for individuals in middle to high income brackets (roughly $80,000 SGD and above annual income) who are looking for:

• Immediate tax relief in the current year;
• A flexible investment vehicle that can be managed independently; and
• The ability to control withdrawal timing to manage future tax exposure.

Unlike CPF, SRS contributions are not mandatory, not locked until age 65, and not guaranteed — but they allow strategic investors to potentially earn higher returns while still enjoying significant tax benefits.

Don let your money sit idle! Invest your SRS for higher returns

Using SRS via StashAway means you can contribute for tax relief and then channel the funds into one of these three tracks that aligns with your goals:

• Managed portfolios: For minimal fuss
• ETF Explorer: For direct ETF selection and customization
• Simple™ Cash: Just park the funds temporarily and want better than cash 

CPF top-ups vs SRS contributions similarities and differences

For Singaporean taxpayers, both CPF top-ups and SRS contributions offer a similar promise — tax relief today in exchange for long-term savings tomorrow. Yet, they operate on fundamentally different philosophies. 

CPF is a guaranteed compounding engine, while SRS is an investment-driven tax deferral tool. 

Interpreting the trade-offs

At its core, CPF functions like a risk-free fixed-income instrument, anchored by a 4 % government-guaranteed floor that currently outpaces inflation and most T-bill yields.

It offers certainty, compounding power, and inflation protection — but at the cost of flexibility. Once topped-up, funds are effectively locked until retirement, and withdrawals are subject to CPF LIFE’s structured payout design.

SRS, on the other hand, is deliberately designed for flexibility and opportunity. Its tax relief is immediate and equivalent to CPF’s, but its success depends on how the funds are invested. Idle balances at 0.05 % lose value against inflation, yet a well-diversified SRS portfolio can realistically match or even exceed CPF’s compounding rate.

The liquidity trade-off is the defining line between the two. CPF top-ups are irreversible but predictable; SRS is reversible but volatile. 

For risk-tolerant investors or those with shorter horizons, SRS offers the ability to manage allocation and timing, especially around retirement age when withdrawals can be planned to fall within lower taxable income years.

2026 tax relief landscape: what’s changed

Singapore’s personal income tax system continues to uphold its progressive, globally competitive structure. But subtle shifts in relief thresholds and family-related rules are reshaping how individuals plan their savings and retirement contributions.

The Year of Assessment (YA) 2026 — which covers income earned in 2025 — follows the same resident tax schedule introduced from YA 2024 onwards.

A stable, progressive tax structure

The system remains broadly familiar. The first $20,000 SGD of chargeable income is tax-exempt, followed by graduated brackets that rise from 2% on the next $10,000 SGD to 24% for income above $1 million SGD.

This progressive design continues to support middle-income earners while maintaining Singapore’s attractiveness for higher-income professionals and entrepreneurs. 

Relief and rebate structure for YA 2026

The overall personal relief cap remains at $80,000 SGD, encompassing all individual, family, and retirement-related reliefs. 

CPF top-up and SRS contributions are both included within this ceiling, so optimising their allocation is key to maximising benefits.

The dependent income threshold—for spouse, parent, and child reliefs—has been permanently raised from $4,000 SGD to $8,000 SGD since YA 2025. 

This adjustment expands eligibility for dual-income households, enabling more families to claim these reliefs while still maintaining room for CPF or SRS contributions.

For YA 2026, IRAS has not announced a new personal income tax rebate. The 60% rebate (capped at $200 SGD) applied in YA 2025 was a one-off measure. In its absence, taxpayers will rely more heavily on relief-based optimisation such as CPF and SRS top-ups to lower their payable tax.

How much can you save?

At the 11.5% marginal bracket (for chargeable income around $90,000 SGD), contributing the full $15,300 SGD to SRS cuts tax payable by about $1,760 SGD. A voluntary $8,000 SGD CPF top-up to the Special Account saves roughly $920 SGD.

For higher-income earners taxed at 15% and above, combining both schemes can yield over $3,000 SGD in annual tax savings, provided total reliefs stay within the $80,000 SGD cap. 

The financial advantage compounds further when CPF’s guaranteed returns or SRS investment gains are factored over time.

Rising participation

Data from IRAS and CPF Board show a clear upward trend in voluntary contributions. SRS participation climbed 43% between 2020 and 2024, pushing total balances to $20.6 billion SGD. 

At the same time, CPF cash top-ups reached $6.7 billion SGD in the first 7 months of 2025, representing a significant increase from the $4.8 billion SGD bin top-ups for the whole of 2024.

Which account should you top up — CPF SA or SRS?

Now that we’ve unpacked how CPF and SRS work, the next question is the one most people ask at year-end: which account should you top up first?

The answer depends on your financial goals, liquidity needs, and appetite for risk. Both schemes give you dollar-for-dollar tax relief up to the annual limits, but the way they grow — and how you can eventually access them — differs sharply.

When topping up your CPF Special Account makes sense

If you value certainty over flexibility, CPF SA is hard to beat.

It offers a risk-free 4 % floor rate, with effective returns of up to 5–6 % on the first $60,000 SGD of combined balances. These are guaranteed by the Singapore government and comfortably outpace both inflation and six-month Treasury-bill yields.

CPF SA top-ups are best suited for those who prefer a “set-and-forget” approach to retirement savings. Once the funds are in, they compound steadily and form the foundation of your CPF LIFE payouts later on.

That said, CPF is a one-way door. Cash top-ups are irreversible, and you cannot withdraw them before 55, except through structured retirement schemes. 

You should therefore ensure you’ve set aside enough liquidity for near-term needs such as housing upgrades, family commitments, or children’s education before locking funds away.

In short, CPF SA is ideal if you:

• Want guaranteed, government-backed returns;
• Are comfortable locking funds long-term; and
• Prefer predictable growth over market volatility.

When SRS is the better move

If you’re comfortable with investing — and can tolerate short-term swings for long-term gain — SRS gives you the freedom and flexibility that CPF does not.

SRS contributions earn just 0.05 % p.a. if left idle, but the funds can be invested across a wide range of instruments: Singapore Government Securities, fixed deposits, stocks, unit trusts, ETFs, and Single Premium Insurance Products. With a well-diversified allocation, investors can target higher returns than CPF over time.

Unlike CPF, SRS allows partial withdrawals after reaching the statutory retirement age (currently 63 for those opening an account today). Only 50 % of withdrawals are taxable, and you can spread them out over 10 years to minimise tax impact. The trade-off is liquidity: withdrawals before retirement incur a 5 % penalty and are fully taxable.

SRS suits individuals who:

• Want to invest for higher, market-linked returns;
• Need more control over how and when their funds are used; and
• Are comfortable managing investment and liquidity risk in exchange for flexibility.

CPF vs SRS: long-term growth comparison

Top-ups to your CPF Special Account (SA) and contributions to your Supplementary Retirement Scheme (SRS) can both build meaningful long-term wealth — but they compound differently. CPF prioritises safety and guaranteed returns, while SRS rewards risk-taking with higher potential gains.

Here’s how both perform over a 20-year horizon when contributing $8,000 SGD annually — the CPF limit for self top-ups and a fair comparison against an equivalent SRS contribution.

The 20-year projection

Assumptions:

• CPF SA compounds at 4 % p.a., the current floor rate guaranteed through December 2026.
• SRS portfolio compounds at 6 % p.a., a balanced return based on diversified ETF portfolios such as StashAway or Syfe Core portfolios.

What the numbers show

With consistent top-ups, CPF delivers predictable, compounding stability.

After 20 years, $8,000 SGD annual contributions accumulate to nearly $237,000 SGD, with no volatility or capital risk. Because CPF interest is backed by government securities, the value of these savings doesn’t fluctuate — an advantage during market downturns.

By contrast, if the same $8,000 SGD is channelled into SRS and invested prudently, a 6 % portfolio return can grow the balance to about $295,000 SGD — roughly $58,000 SGD more than CPF. The upside is meaningful, but it comes with exposure to market swings and the discipline needed to stay invested through volatility.

Tax efficiency also compounds the benefit. For example, at an 11.5 % marginal tax rate, an $8,000 SGD CPF top-up saves $920 SGD in tax, while a $15,300 SGD SRS contribution (if you choose to add more) saves up to $1,760 SGD. Reinvested annually, these relief savings further enhance compounding returns over time.

Interpreting the long-term trade-off

• CPF SA: The steady 4 % rate acts as a risk-free benchmark, outperforming most fixed deposits, T-bills, and bond funds in real terms after inflation. It suits savers who value security and guaranteed payouts.
• SRS: The higher return potential of a 6 % portfolio (with 50 % withdrawal tax efficiency at retirement) can result in superior long-term outcomes, provided you stay invested and diversified.

However, SRS outcomes depend heavily on investment discipline and market conditions. During extended bear markets, returns could temporarily dip below CPF levels. That’s why many financial planners recommend a hybrid approach — CPF for capital stability and SRS for growth.

Frequently asked questions (FAQs)

1. When is the deadline for CPF and SRS top-ups to qualify for tax relief?

Both CPF and SRS contributions must be made by 31 December 2025 to be eligible for YA 2026 tax relief. 

2. Can I top up both CPF and SRS in the same year?

Yes. You can make both CPF and SRS contributions in the same calendar year and enjoy reliefs from each, provided your total personal reliefs do not exceed the $80,000 SGD cap. 

For example, topping up $8,000 SGD to CPF and $15,300 SGD to SRS yields combined tax reliefs of up to $23,300 SGD if you have sufficient relief headroom.

3. How much tax can I actually save?

Your savings depend on your marginal tax rate.

• If you earn $60,000 SGD (7 % bracket), an SRS contribution of $15,300 SGD saves about $1,071 SGD.
• If you earn $120,000 SGD (15 % bracket), a combined SRS + CPF top-up can save over $3,000 SGD.

The higher your income, the greater the impact of top-ups on reducing your tax bill.

4. Are CPF top-ups reversible or withdrawable?

No. CPF cash top-ups are irreversible and locked until at least age 55, when your Retirement Account (RA) is formed. Partial withdrawals (up to $5,000 SGD) are possible if your RA balance is below the Basic Retirement Sum. Otherwise, funds are used to generate lifelong monthly payouts through CPF LIFE.

5. Can I withdraw my SRS funds anytime?

You can, but early withdrawals come with penalties.

• Before statutory retirement age (currently 63): 100 % of the amount withdrawn is taxable, and a 5 % penalty applies.
• After statutory retirement age: Only 50 % of withdrawals are taxable, and you can spread withdrawals over 10 years to manage your taxable income efficiently.

6. What happens to my SRS if I leave Singapore permanently?

If you’re a foreigner who has contributed to SRS and later leaves Singapore permanently, you can apply for a one-time early withdrawal after 10 continuous years of participation. In that case, only 50 % of the amount is taxable, and the 5 % penalty is waived.

7. Which gives better returns: CPF or SRS?

CPF offers guaranteed 4 % returns (up to 6 % effective) with zero market risk, while SRS investments can potentially earn 5–6 % annually if diversified prudently across ETFs or funds. Over 20 years, SRS could grow faster — but CPF provides unmatched security and predictability.

8. How do CPF and SRS interact with inflation?

CPF’s 4 % floor rate continues to outpace core inflation, which the Monetary Authority of Singapore projects at 2.5–3 % for 2025. SRS portfolios, when invested effectively, may deliver 3–4 % real returns after inflation, though they are subject to market cycles.

9. Is it better to top up my spouse’s CPF instead of mine?

It depends on your tax position. If your spouse earns $8,000 SGD or less in the previous year (or is certified as handicapped), you can top up their CPF and claim up to $8,000 SGD in additional relief. This is a strategic way to optimise family-based tax planning while boosting joint retirement savings.

10. What’s the simplest way to make a top-up?

• CPF: Log in via cpf.gov.sg, use the “Top Up My Account” service, or scan the PayNow QR code in the CPF mobile app. Processing takes one to two working days.
• SRS: Open an account with DBS, OCBC, or UOB, then transfer funds directly through your banking app. For investment, you can connect your SRS account to robo-advisors such as StashAway for automated ETF portfolios.