All you need to know about using SRS and CPF to buy ETFs | DBS Singapore (2024)

FAQs

Can I use SRS to buy ETFs? ›

SRS complements the Central Provident Fund (CPF) and is voluntary. The SRS offers attractive tax benefits as contributions to SRS are eligible for a dollar-to-dollar tax relief, up to a personal income tax relief cap of S$80,000 per Year of Assessment^2. SRS account holders can invest in any ETFs that are listed on SGX.

You are not allowed to buy ETFs using CPF SA monies. The list of allowed investments (for both OA and SA) is here: https://www.cpf.gov.sg/Assets/members/Documents... That's because it is not advisable to invest your CPF SA.

Take charge of your retirement future today

The CPF Investment Scheme (CPFIS) gives you the opportunity to invest your CPF savings to grow your nest egg. The Supplementary Retirement Scheme (SRS) complements the CPF, and SRS contributions can be used to purchase investment instruments such as mutual funds.

Investing in S&P 500 with SRS

There are currently very limited investment options if you wish to use your Supplementary Retirement Scheme (SRS) savings to invest in the S&P 500. A low-cost unit trust you may wish to consider for SRS investments is the iShares US Index Fund by BlackRock.

Singaporeans can buy the Infinity US 500 stock index fund as a unit trust under CPF or SRS.

Fixed deposits are probably the most straightforward way to maximise your CPF returns. Fixed deposits offer a guaranteed rate of return. With the rising interest rates, many banks are now offering interest rates in the 3% per annum range on their fixed deposits, well above the 2.5% interest rate given by the CPF OA.

We mentioned above that the CPF Special Account is meant for financial needs after retirement, and can be used for investments in retirement-related financial products. It primarily exists to help Singaporeans to save for future retirement needs, hence it enjoys a higher interest rate of 4%.

Foreigners are allowed to withdraw penalty-free before their retirement age, but only if they withdraw their SRS savings ten years after they have started an active SRS account (i.e. so long as a dollar is held in the account). They must also withdraw their SRS savings in full. The beauty of SRS is in the tax discount.

How much should I put in SRS? ›

You can reduce your taxable income by the same amount contributed to your SRS Account, with a maximum yearly contribution of S$15,300 for Singaporeans and Singapore PRs, and S$35,700 for foreigners.

The most common way to invest in ETFs is through a stock brokerage account – similar to how we buy and sell stocks in Singapore. According to the Singapore Exchange (SGX), there are 60 ETFs listed in Singapore. The actual number may be lower, as some ETFs are listed in dual currencies.

You'll need to deposit funds into your account to begin trading. Some brokers may charge you deposit fees, or you may need to pay a forex fee in order for your Singapore dollars to be converted into US dollars. Buy the index fund. Once your money has been deposited, you can then buy the S&P 500 index fund.

Low-risk Assets

Assets like Singapore Savings Bonds (SSBs), Regular Savings Plans (RSPs) and ETFs are great for beginner investors as there's a lower risk involved as compared to high-risk assets like stocks or cryptocurrencies.

Any SRS member, regardless whether he is a foreigner or not, may withdraw his SRS without penalties at the age of 62, if that is the statutory retirement age prevailing at the time of his first contribution.

You can choose to contribute to your SRS contribution cap before 31 December every year and enjoy tax relief in the following Year of Assessment. Saving on income tax is the biggest appeal of the SRS account for Singaporeans, PRs, and foreigners.

SPDR Gold Shares is included under the CPF Investment Scheme (CPFIS) – Ordinary Account and Supplementary Retirement Scheme (SRS). This means you can now use some of your CPF Ordinary Account savings to invest in the gold ETF.

Yes you can. Before submitting an SRS trade, you need to open an SRS Investment Account with an agent bank. The SRS Investment Scheme account number also needs to be updated into your Trading account with us. Please contact your trading representative to update your SRS Investment bank account details.

What is the cheapest way to buy the S&P 500? ›

Buying an S&P 500 Fund or ETF. If you want an inexpensive way to invest in S&P 500 ETFs, you can gain exposure through discount brokers. These financial professionals offer commission-free trading on all passive ETF products. But keep in mind that some brokers may impose minimum investment requirements.

As a result, CPF members aged 55 and above will earn up to 6% interest per year on their retirement balance. In order to accumulate a million dollars in your CPF, the key is to move the lower interest OA money into your SA. Then, the compounding effect of 5% per annum builds up your cash reserves faster.

There is a maximum for CPF LIFE: It's pegged to the Enhanced Retirement Sum ($288,000 this year). So for those who are 55 this year, the highest CPF LIFE payout is $2,120 to $2,280 a month. And that's for the Standard plan. If you opt for the Escalating plan, it will be even lower.

CPF Withdrawal

You can withdraw at least 20% of your retirement savings, either from 55 or 65 depending on your birth year. This includes the first $5,000 withdrawable at any time after 55. Please refer to this link to learn more about the percentage and withdrawal age.

Make cash top-ups to your Special Account (SA) or Retirement Account (RA) Start early by making small, regular top-ups to your CPF savings. This will allow your CPF savings to grow over time thanks to the power of compound interest.

How can I invest in US stocks on my own? You can invest in US stocks as long as you have a brokerage account that has access to the US stock markets. The stocks you purchase will be held in your custodian account with the broker. Examples of such brokerages include Interactive Brokers, SAXO Markets and Tiger Brokers.

Yes, you may use CPF funds to buy, subject to the rules of the CPF Investment Scheme, including your available gold limit.

When you turn 55, we will transfer your CPF savings, up to your Full Retirement Sum (FRS), to create your Retirement Account (RA). The savings in your RA is meant to provide you with payouts in retirement. Your Special Account (SA) savings will be transferred first, followed by your Ordinary Account (OA) savings.

Your savings from your SA and OA, up to the current FRS of $198,800 (as of 2023), will be transferred to your RA to form your retirement sum. These funds are then set aside, and compounded, for the next 10 years, for the purpose of contributing into the CPF LIFE scheme when you turn age 65 (or latest, by age 70).

As you work and make CPF contributions, you accumulate savings in these three accounts: your Ordinary Account (OA), MediSave Account (MA), and Special Account (SA).

Should I put my money in SRS? ›

The SRS account can help you grow your retirement savings, so it is worth considering if you've reached the contribution limit on your CPF account.

Find out what the minimum retirement age is and what to do if you feel you have been unfairly dismissed because of your age. In accordance with the Retirement and Re-employment Act ( RRA ), the minimum retirement age is 63 years. Your company cannot ask you to retire before that age.

The SRS complements the Central Provident Fund (CPF). CPF savings are meant to provide for housing and medical needs and for basic living needs after retirement. Unlike the CPF scheme, participation in SRS is voluntary. SRS members can contribute a varying amount to SRS (subject to a cap) at their own discretion.

Major advantages include its simplicity and lack of bias. Among the disadvantages are difficulty gaining access to a list of a larger population, time, costs, and that bias can still occur under certain circ*mstances.

How do I transfer my SRS Account from another bank to DBS? You can visit any of our branches to complete and sign the following forms: SRS Account Transfer form. SRS Account Application form.

If you have an existing SRS account, you need not open a new SRS account to invest in SSB. By law, each person is only allowed to have one SRS account. For more information on SRS, please refer to the Ministry of Finance's website (https://www.mof.gov.sg/MOF-For/Individuals/Supplementary-Retirement-Scheme- SRS).

Singapore bond ETFs have outperformed Singapore equity ETFs amidst the economic slowdown caused by COVID-19, with the “AAA” investment-grade ABF Singapore Bond Index ETF and Xtrackers II Singapore Government Bond UCITS ETF averaging a YTD return of 8.6%.

How to choose ETFs for beginners? ›

Ultimately, investors choosing an ETF need to ask 3 questions: What exposure does this ETF have? How well does the ETF deliver this exposure? And how efficiently can I access the ETF? Look at the ETF's underlying index (benchmark) to determine the exposure you're getting.

With all that's been said, in my opinion, the best S&P 500 ETF is CSPX. The main reason for this choice is the cost-efficiency of CSPX over the other ETFs. Part of this is derived from the fact that CSPX is an ACC ETF - so it reinvests dividends efficiently and I incur no extra cost during investments.

CFA is the largest of the five Singapore-listed real estate ETFs. It paid out a total of S$0.037 per share in 2022, for an annual dividend yield of 5.41%. This fund has an expense ratio of 0.58%.

Currently, Singapore does not impose capital gains tax, inheritance tax and estate duties. Investors don't have to pay stamp duties when they purchase scripless shares listed on the Singapore Stock Exchange, where the transfer of such shares is made by the Central Depository (CDP) via electronic means.

Investors who are interested in starting up a business or investing in Singapore may apply for the Singapore Permanent Residence status (PR) through the Global Investor Programme (GIP) by submitting all the required application forms and supporting documents.

For most people in Singapore, S$10K is a good monthly income.

The Supplementary Retirement Scheme (SRS) is a government scheme that helps you enjoy tax savings on the funds you contribute while saving up for a comfortable retirement. Contributions into your SRS Account may be used to purchase various investment instruments to earn potentially higher returns.

Using your SRS in your golden years

SRS gives you the flexibility to withdraw your SRS funds in cash or investments. Depending on your needs and lifestyle, you may choose to make a lump sum withdrawal, or spread it out over 10 years^{^}. All withdrawals are subject to 50% tax concession, including annuity streams.

The SRS complements the Central Provident Fund (CPF). CPF savings are meant to provide for housing and medical needs and for basic living needs after retirement. Unlike the CPF scheme, participation in SRS is voluntary. SRS members can contribute a varying amount to SRS (subject to a cap) at their own discretion.

What can I invest my SRS account in? ›

Your investments are deposited into your SRS Account

The stocks, ETFs, SSBs, unit trusts, and other investments that you purchase will be deposited into your SRS account. Similarly, any distribution or dividend payouts and bond coupons, and proceeds from investment sales, will also be credited back into your account.

You may withdraw your SRS monies at any time. You may also continue to operate your SRS account after leaving Singapore. As for the taxability of SRS withdrawals, all withdrawals are generally taxable. In addition, all withdrawals made before the retirement age (currently 62) attract a 5% penalty.

SRS helps you save on tax

You can reduce your taxable income by the same amount contributed to your SRS Account, with a maximum yearly contribution of S$15,300 for Singaporeans and Singapore PRs, and S$35,700 for foreigners.

SPDR Gold Shares is included under the CPF Investment Scheme (CPFIS) – Ordinary Account and Supplementary Retirement Scheme (SRS). This means you can now use some of your CPF Ordinary Account savings to invest in the gold ETF.

The CPF Investment Scheme (CPFIS) provides members with the option to invest their CPF savings in various instruments such as insurance products, unit trusts, fixed deposits, bonds and shares.

Issue a local cheque in your name. Write your SRS Account no. at the back of the cheque. Deposit your cheque at any DBS/POSB Branches or Cheque Deposit Box located islandwide.

You can buy SGS bonds and T-bills using cash, Supplementary Retirement Scheme (SRS) funds or CPF Investment Scheme (CPFIS) funds.

Can I sell shares which I have bought through my CPFIS/SRS account from my CDP securities account or vice versa? Shares which you have bought through your CPFIS/SRS account cannot be sold from your CDP securities account.