SRS Investment

Before you invest, you need to make a contribution to the SRS account. You may only make this contribution after your SRS Operator has calculated your SRS contribution cap based on your income earned in the preceding year.

After making your contribution, you may invest this amount in a wide range of financial assets, including those offered by financial institutions other than your SRS operator. You may invest your SRS funds in Unit Trusts too. Note that SRS funds cannot be used to invest in property, and only selected life insurance products are allowed.

What type of investments can I invest my SRS funds in?
Funds in the SRS account may be invested in a range of financial products. This includes fixed deposits, insurance products and unit trusts. Investments in direct property are not allowed. As for life insurance products, only single premiums with life cover of not more than three times the single premium will be allowed. Critical illness, healthcare and long term care products are excluded from this scheme. All proceeds from the realisation of SRS investments must be returned to the SRS account.

How to get the best deal?Before you start saving under the SRS scheme, it is advisable to do a simple cost-benefit analysis to review the potential tax benefits as well as earnings from investing your SRS funds. This should be weighed against the opportunity cost of tying down your funds till retirement age. There is a chance that if SRS savings are withdrawn in its entirety on retirement, you will end up paying more income tax on the withdrawals than what was gained in tax savings. However this may be mitigated by staggering withdrawals over a period of 10 years.