Don't leave SRS funds idle, and plan to maximise retirement funds

STARTING Feb 1, 2019, an individual can invest up to S$200,000 in Singapore Savings Bonds (SSB), double from the current overall cap of S$100,000, and use his or her Supplementary Retirement Scheme (SRS) funds to do so.

It is hoped the latest move would encourage those who are leaving their SRS funds idle in accounts - earning 0.05 per cent a year, the same as a typical savings account - to consider investing them in SSB to earn better returns, and not let their savings be eroded by inflation. If held to maturity, the 10-year SSB is paying an average 2.45 per cent, compared to the fixed deposit rates of 1.7 to 1.9 per cent some banks are offering.

According to official figures, about 141,000 SRS account holders have around S$8.15 billion in total stashed in their accounts. A chunk of that, about 33 per cent, is held in cash, with 26 per cent in shares, real estate investment trusts and exchange traded funds. Insurance products account for 24 per cent; unit trusts 9 per cent; fixed deposits one per cent and others 7 per cent.