SRS was introduced to encourage individuals to voluntarily set aside part of their income for their retirement. SRS members can contribute a varying amount to SRS account (subject to cap), and may be used to purchase various investment instruments.

• You can open an SRS account at participating SRS operators:

  1. Development Bank of Singapore (DBS) Ltd
  2. Overseas-Chinese Banking Corporation (OCBC) Ltd
  3. United Overseas Bank (UOB) Ltd

By contributing to SRS, you are able to enjoy income tax benefits, subjected to the personal income tax relief of $80,000 per year of assessment.

The contribution cap for Foreigners is $35,700 per annum.

For eg:
My Taxable income for year 2021: $100,000

After contributing to my SRS account of $20,000 in 2021, my Taxable income will be $100,000 - $20,000 = $80,000

• For foreigners contributing to SRS, you can withdraw your SRS monies without penalty if:

  1. You are neither a Singapore Citizen nor a SPR on the date of withdrawal and for a continuous period of 10 years preceding the date of withdrawal;

  2. You have maintained your SRS account for a period of not less than 10 years from the date of the first contribution to your SRS account; and

  3. You make a one-time full withdrawal from your SRS account

• 50% of the SRS withdrawals will be deemed chargeable to tax, and will be subjected to a withholding tax.

• A concessionary withholding tax rate of 15% will apply to an SRS withdrawal only if:

  1. Cumulative amount withdrawn in the calendar year in which the withdrawal is made, does not exceed $200,000; and

  2. SRS member does not have any other income besides the SRS withdrawal(s) during the calendar year in which the withdrawal(s) is/are made

While SRS members may withdraw SRS savings anytime, any early withdrawals will be 100% taxable, and will also include a 5% withdrawal penalty.

For eg:
My Taxable income for year 2021: $40,000

I made a premature withdrawal from SRS of $10,000.
My Taxable income for year 2021 will therefore be: $40,000 + $10,000 = $50,000

On top of that, I will only receive $9,500 for my SRS withdrawal after the 5% penalty.

As the interest rate for SRS account is fixed at only 0.05%p.a, you may wish to invest your SRS monies. With a wide range of financial instruments available (ranging from life insurance to unit trust), consult with our partnered financial advisors to understand which available products will suit your needs best!