5 minute read

The Supplementary Retirement Scheme (SRS) is more than just a tax relief program – it's a powerful tool designed to help Singaporeans, PRs, and foreigners living in Singapore build their retirement savings beyond CPF contributions. But here's the thing: simply parking your money in an SRS account isn't enough – your money could be working much harder for you.

With StashAway, you can do something unique: invest your SRS funds in global ETFs, unlocking opportunities for growth that traditional options don't offer. Let's explore how our portfolios stack up against common SRS investment choices, and why global investing could make a significant difference to your retirement savings.

Bank savings accounts

• Return: 0.65% p.a.
• Risk: None (capital guaranteed)
• Liquidity: High

While keeping your SRS funds in a bank account feels safe, it could be quietly eroding your wealth. When you take into account Singapore's inflation averaging 2% over the past 20 years, your retirement savings may actually lose purchasing power every year you leave them uninvested.

StashAway alternative: Simple™

• Return: 3.40% p.a. (projected)*
• Risk: Ultra-low
• Liquidity: High (no lock-ins)

Simple is our foundational cash management solution that puts your idle cash to work without sacrificing security. By investing in low-risk money market and short-term bond funds, Simple aims to deliver steady returns that can help protect your savings from inflation. With no lock-in periods or account minimums, you maintain the flexibility to adjust your strategy whenever needed.

StashAway alternative: Simple™ Plus

• Return: 3.8% p.a. (yield to maturity)**
• Risk: Low
• Liquidity: High, but optimised for 12 month+ timeframes

Simple Plus takes cash management further by incorporating a more diverse mix of high-quality, short-duration bonds. While it maintains high liquidity with no lock-ins, it's designed to reward patience – perfect for SRS funds you won't need immediate access to. After just one year, the difference between a 0.65% bank return and a 3.8% return with Simple Plus means an extra $630 for your retirement.

Shares, REITs, and ETFs

• Return: Varies with market performance
• Risk: High (based on market volatility)
• Liquidity: High (buy and sell shares on the market)

While investing in individual stocks or ETFs listed on the Singapore Exchange can offer higher potential returns, it requires active management and leaves you exposed to single-market risk. For regular investors, it can be challenging to maintain a truly diversified portfolio through individual stock picking.

StashAway alternative: Flexible Portfolios

• Return: Varies (customisable, choose from 70+ top-performing ETFs)
• Risk: Moderate to high (you control the mix)
• Liquidity: High (no lock-ins)

Unlike traditional SRS options limited to Singapore, our Flexible Portfolios let you invest across 70+ globally-diversified ETFs. This gives you access to international markets and sectors while maintaining full control over your asset allocation – tweak your investing strategy across themes such as AI and gold, or specific markets like China or India.

For instance, you could allocate a portion of your SRS funds to an ETF tracking the MSCI World Index for broad global exposure, complement it with a targeted allocation to emerging markets, then round it out with a thematic ETF focused on AI.

Unit trusts

• Return: Varies widely, approximately 3–5% p.a. for balanced portfolios
• Risk: Moderate to high (depends on the fund)
• Liquidity: Moderate

Traditional unit trusts come with a complex fee structure, including one-off initial costs, ongoing fees, and even fees charged upon redemption. While these fees might seem manageable initially, they can have a significant impact on your returns over the long term.

StashAway alternative: General Investing

• Return: Varies based on risk level (average 6.3% p.a.3 across risk levels)
• Risk: Moderate to high, depending on your chosen risk level
• Liquidity: High (you can buy, sell, or rebalance anytime)

For those who prefer a hands-off approach, our General Investing portfolios offer professionally managed, globally diversified investing without the many fees of unit trusts. Just one simple management fee that decreases as you invest more – so more of your money goes towards growing your portfolio. And while some unit trusts are built to lock you in with withdrawal fees, our portfolios don’t restrict you.

These portfolios offer global diversification, granting you access to a broad range of international markets that may be difficult or costly to invest in individually – unlocking greater growth potential. Plus, you get to choose a risk level that you’re comfortable with.

Singapore Savings Bonds (SSBs)

• Return: 3% p.a. (on average for 10-year bonds)
• Risk: Low (government-backed)
• Liquidity: Moderate (can be sold before maturity, but prices fluctuate)

SSBs offer a safe, government-backed investment option, but with a lower yield. While they provide stability, their returns may not be enough to outpace inflation over the long term.

StashAway alternative: Income Investing

• Return: 4.5% p.a.*
• Risk: Low to moderate (well-diversified across global bonds)
• Liquidity: Moderate (adjust your investments anytime without penalties)

Our Income Investing portfolio, powered by J.P. Morgan Asset Management, offers higher potential yields than SSBs through global bond diversification. With professional management and flexible payout options, you can create a steady income stream without being locked in to your investment. Here are some practical fixed-income strategies to get you started.

Insurance endowment plans

• Return: Typically 2–5% p.a.
• Risk: Low (capital protection)
• Liquidity: Low (10–25 year lock-ins for some plans)

Endowment plans offer capital protection but sacrifice flexibility. Long lock-in periods and surrender charges can severely limit your ability to adapt to changing needs or market conditions.

StashAway alternative: General Investing

• Return: Varies based on risk level (average 6.3% p.a.3 across risk levels)
• Risk: Moderate to high, depending on your chosen risk level
• Liquidity: High (you can buy, sell, or rebalance anytime)

For investors with a longer time horizon, our General Investing portfolios offer higher potential returns through exposure to global equity and fixed-income markets. Unlike endowment plans, you have the freedom to withdraw, rebalance, or adjust your investments at any time without penalties.

Plus, our ERAA® investing framework reoptimises your portfolio for the macroeconomic environment – free of charge – so your money can continue to work for you, regardless of market conditions.

Unlock the potential of your SRS funds with StashAway

Investing your SRS funds globally through StashAway offers a powerful way to boost the returns on your retirement savings, while managing risk. This is especially important when you consider that traditional options like bank savings accounts or SSBs may not even outpace inflation over the long term.

• Higher potential for returns: Investing your money globally means it has the potential to outperform traditional instruments.
• Global diversification: Gain exposure to a wide range of global markets and sectors through professionally curated ETFs.
• Cost-effective: Our transparent, tiered fee structure decreases as you invest more – this means more of your cash stays invested.
• Flexibility: No lock-in periods or penalties allow you to adjust your strategy as needed.

Getting started is simple: within our app, simply choose to transfer from your SRS account when investing in your preferred investment portfolio.

The projected rate is as of %simple.date% and may change depending on market conditions. It is based on the gross yield provided by the fund manager. Yield to maturity is not a guarantee for future returns.

The latest annualised yield is as of %simpleplusnew.date% and may change depending on market conditions. Yield to maturity is not a guarantee for future returns.

In USD terms. Performance figures for Q3 2024 before fees. Past performance is not indicative of future performance. Performance figures assume that dividends or any payouts were reinvested.

This figure is calculated based on the portfolio yield as of 31 Oct 2024, plus the management fee rebate of up to 0.8% p.a..