Almost $4 Billion In SRS Top-Ups Sit Still In Cash – How Much Purchasing Power Is Lost To Inflation

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The Supplementary Retirement Scheme (SRS) is a voluntary scheme that encourages Singaporeans to save for retirement. It complements our CPF savings and is part of the Singapore government’s multi-pronged strategy to save more for our old age.

However, many people with SRS accounts are missing out on growing their retirement savings and may even be losing to inflation. That’s because funds in your SRS account only earn interest at a rate of 0.05% per annum. The SRS has become a popular way for Singaporeans to save more for retirement while enjoying tax benefits but despite these advantages, a large share of SRS contributions continues to sit in cash. While the intention to save is commendable, leaving SRS balances idle means their value may erode over time due to inflation.

According to the latest statistics released by the Ministry of Finance, the total SRS contributions at the end of 2024 were $20.58 billion. However, 19% are sitting in cash. That’s almost $4 billion, earning only 0.05% per annum. Even with Singapore’s headline inflation averaging a low 2% over the past decades, this means that an amount earning only 0.05% in interest is slowly diminishing in value.

How Much You Are Missing Out On By Not Maximising Your SRS Funds

Let’s assume you’ve opened your SRS account and topped up $50,000. If you don’t do anything else, your funds will grow at 0.05% per annum. After 30 years in 2055, when you’re ready to retire, there will be $50,755.46 in your account. That’s just $755.46 in total interest over three decades.

Once you factor in a headline inflation rate of 2%, that amount will only have the same purchasing power as $28,012.58 today. Even though you’ve technically not lost any money (and earned $755.46 in interest), the purchasing power of your money would have dropped by $22,742.88 over 30 years.

That is why ensuring that your retirement funds can combat inflation and maximise returns is crucial. You don’t want to lose the value of your savings in your old age.

How SRS Can Work Harder For You

The good news is that funds in your SRS account don’t have to idle. Beyond earning a nominal 0.05% interest, you can use your SRS monies to invest in a wide range of instruments such as fixed deposits, Singapore Savings Bonds, unit trusts, stocks and ETFs.

Among these, ETFs have gained popularity among long-term investors for their ability to provide diversified market exposure at relatively low cost. They are also easier to monitor, making them a suitable option for investors who prefer a simple, disciplined way to grow their retirement savings over time.

Maximising SRS Funds

Fortunately, there are several investment products that you can explore. According to SRS statistics from the Ministry of Finance, as of December 2024, 24% of SRS funds are invested in shares, REITs, and exchange traded funds (ETFs), while an additional 12% are invested in unit trusts.

All investments involve some risk, including ETFs. ETFs typically invest in a diversified basket of stocks or bonds that track the performance of a specific index. They allow investors to build a well-diversified portfolio without needing a large lump sum to start.

SRS account holders can invest in any ETF listed on the SGX, including the following:

Amova Singapore STI ETF: This ETF tracks the Straits Times Index, which represents the 30 biggest companies on the Singapore Exchange. This ETF is suitable for investors seeking exposure to a portfolio of Singapore-listed equities. As of 31 October 2025, 1-year returns are 30.04%, 3-year returns are 18.04%, and 5-year returns are 17.45%.

Source: Amova Asset Management Asia Limited as of 31 October 2025.

Returns are calculated on a NAV-NAV basis and assuming all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

ABF Singapore Bond Index Fund: This ETF tracks the iBoxx ABF Singapore Index, which represents bonds primarily issued or guaranteed by the Singapore government or quasi government entities. This ETF is suitable for investors who seek an index-based approach to Singapore government bonds. As of 31 October 2025, 1-year returns are 9.18%, 3-year returns are 6.74%, and 5-year returns are 0.64%.

Source: Amova Asset Management Asia Limited as of 31 October 2025.

Returns are calculated on a NAV-NAV basis and assuming all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Amova SGD Investment Grade Corporate Bond Index ETF: This ETF tracks the iBoxx SGD Non-Sovereigns Large Cap Investment Grade Index, which represents SGD-denominated Investment Grade Bonds. This ETF is suitable for investors seeking exposure to a portfolio of Investment Grade Bonds issued by government agencies, banks, and other familiar and well-established institutions like NUS and NTUC. As of 31 October 2025, 1-year returns are 6.88%, 3-year returns are 7.73%, and 5-year returns are 2.45%.

Source: Amova Asset Management Asia Limited as of 31 October 2025.

Returns are calculated on a NAV-NAV basis and assuming all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Reference to any particular securities is purely for portfolio information as at the indicated date only and does not constitute a recommendation to buy, sell or hold any securities or to be relied upon as financial advice in any way.

Amova-StraitsTrading Asia ex Japan REIT Index ETF: This ETF tracks the FTSE EPRA Nareit Asia ex Japan REITS 10% Capped Index, which represents REITs across developed and emerging economies in Asia. This ETF is suitable for investors seeking exposure to a portfolio of REITs beyond Singapore and into Hong Kong, India, and Malaysia. As of 31 October 2025, 1-year returns are 10.49%, 3-year returns are 5.08%, and 5-year returns are 1.42%.

Source: Amova Asset Management Asia Limited as of 31 October 2025.

Returns are calculated on a NAV-NAV basis and assuming all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Investing In ETFs Using Your SRS Account

Source: Amova Asset Management

ETFs combine the diversification benefits of funds with the trading flexibility of stocks – allowing investors to build a diversified portfolio without the need for large capital and often require less active management. For SRS investors, this makes ETFs an efficient way to grow long-term retirement savings while keeping costs low.

If you’re keen to start investing your SRS funds, you can purchase any of the SRS-eligible ETFs mentioned above through approved brokerage platforms. Once your brokerage account is linked to your SRS account, you can buy or sell ETFs as easily as trading regular stocks.

When investing through SRS, all trades must be executed using funds from your SRS account, and proceeds from sales will flow back into it. You can invest up to your available SRS balance at any time but withdrawals can only be made after the statutory retirement age (currently 64, rising to 65 by 2030). Gains and dividends from your SRS investments remain tax-deferred until withdrawal, allowing your portfolio to compound without annual tax drag.

With the right ETF mix, your SRS portfolio has the potential to grow steadily and stay diversified, giving you a disciplined, low-cost way to build a stronger foundation for retirement.  

Looking for a way to start your SRS/CPF investments? Check out what you can do with Tiger Brokers: https://www.itiger.com/sg/marketing/investwithCPF-SRS.

Don’t have a Tiger Brokers account yet? Check out: https://www.itiger.com/sg/invest/cash-boost. Make your SRS monies work harder and smarter starting today.

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