Why Should You Invest Your SRS Funds with StashAway?

05 February 2024

Regular contributions to your Supplementary Retirement Scheme (SRS) offer several benefits, including tax reliefs on your contributions. If you’re wondering, ‘What is SRS?’ – it’s a voluntary savings scheme that complements your CPF, which can help to set the stage for a secure financial future.

While it offers Singaporeans a means to bolster their retirement savings, opening an SRS account won’t suffice if you want to maximise the benefits. You should instead invest your SRS funds to unleash the potential of your contributions and build a golden nest egg with StashAway.

Why You Shouldn’t Leave Your SRS Account Idle

When saving for your golden years, the SRS is a valuable tool, offering tax incentives and flexibility to its contributors. But, one of the most common mistakes people make is leaving their SRS accounts idle. Here’s why you should avoid this:

  • Low-interest rate: When left dormant in your SRS account, the interest rate on your SRS funds is fixed at a meagre 0.05% per annum.
  • Inflation erodes value: The cost of living and expenses tend to rise over time. If you don’t invest your SRS funds, the actual value of your savings can be eroded by inflation.
  • Missed investment opportunities: By letting your SRS funds sit idle, you miss out on investment opportunities that could grow your savings.
  • Optimised tax savings at withdrawal: While contributing to the SRS already maximises your tax relief, when withdrawing 50% of the amount is taxable. Investing your SRS funds can help offset the tax impact on future withdrawals.

You can make the most of your SRS funds by exploring investment options offered by StashAway. This can help you grow your retirement savings effectively while optimising your tax benefits.

Benefits of Investing Your SRS Funds with StashAway

StashAway offers a range of SRS investment products, including those that help to grow your retirement savings. You can choose how to increase your SRS funds based on your financial preference and reap the following benefits.

1. Earn Over the Long Term

When you invest your SRS funds with StashAway, you can grow your savings faster over the long term. Let’s consider the example of investing in the S&P 500, which has averaged annual gains of around 12%. If you invested US$10,000 a decade ago, it would be worth US$36,000 to US$37,000 today. In contrast, the 0.05% annual interest rate on idle SRS funds would have provided minimal growth.

2. Wide Range of Financial Vehicles

StashAway allows you to tailor your SRS investment to suit your financial needs and risk appetite. Whether you prefer a conservative investment, a balanced approach, or higher-risk opportunities, you can build a custom investment strategy with StashAway.

3. Regulator-Approved SRS Investment Products

StashAway is licensed by the Monetary Authority of Singapore (MAS), which means we offer regulator-approved SRS investment products. This ensures that your investments with StashAway comply with regulatory standards, providing peace of mind and security for your retirement savings.

4. Reduction in Income Tax

Investing your SRS funds means you can enjoy a range of tax benefits. The amount you get to save varies based on your income bracket, but it can equate to substantial savings. These tax savings can be channelled back into your investments, accelerating the growth of your retirement fund.

5. Expert, Customised Advice

StashAway's investment portfolios are personalised to align with your specific financial goals and risk tolerance. Our platform combines technology and human expertise to create portfolios that suit your needs. This ensures that your investments are designed to meet your long-term financial objectives.

6. Lowest Achievable Cost

StashAway’s investment solutions have a management fee ranging from 0.2% to 0.8% annually, depending on your overall account balance. But, there are no subscription, redemption, custodian, or penalty fees. This makes it one of the most affordable ways to optimise returns on your SRS investment.

Explore Your Investment Options with StashAway

When it comes to the future, every decision counts. Investing your SRS funds with StashAway not only enables you to achieve better returns but also benefit from their expertise, cost-efficiency, and proven track record. Secure a comfortable retirement today and optimise your tax benefits with diverse SRS investment products.

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