The Supplementary Retirement Scheme (SRS) is a personal income tax relief scheme that helps both tax paying Singapore residents and foreigners reduce their taxable income. If you have topped up your SRS, well done!
The confusing choice of options available grows as more SRS products get approved. The 4 reasons below are why we think choosing Endowus makes the most sense:
1. Endowus does not discriminate against the amount you have.
For SRS, by investing through Endowus, you can top up whatever that is in excess of your next tax bracket and invest the whole dollar sum. For example, if your tax chargeable income is $82,000 and your enthusiasm for contributing to nation building is only at 7% instead of 11.5% of your tax bracket, you are welcome to contribute $2,000. Hey, we don’t judge, and we definitely wouldn't know anyway.
2. You can get global, diversified exposure easily.
Endowus has access to unit trusts from big fund houses such as Dimensional and PIMCO. These funds are often advised by Nobel Laureates and trillion dollar funds (great news!). What this means, is that we get to invest in funds that were previously only available to the big boys (think GIC or Cristiano Ronaldo, a wealthy individual). Just like how cutting edge technology is now available to everyone via smartphones, Endowus has made previously exclusive investment products accessible to everyone.
3. There is no rebalancing cost, and no transaction costs.
Many people choose to invest their SRS in SGX listed equities or Real Estate Investment Trusts to maximise their investment returns. Brokerage fees, which often come with fixed minimums, make investing a smaller amount of money more expensive. Imagine paying a fixed $26.75 for a $500 investment -- you’ll lose 5% immediately on your investment before you even get started.
Ideally, we should not incur high fixed costs if we want to sell and buy our holdings to manage our risks. Endowus charges a flat 0.4% access fee, GST included, and that will cover all transaction costs, including sales charges.
4. You won't incur any foreign exchange charges.
Our funds are denominated in Singapore dollars, and Endowus pays fund managers in Singapore dollars as well. This means that when fund managers take our money on an aggregated basis, they will convert it into other currencies at the lowest possible rates to invest our money. In a nutshell, foreign exchange transactions are best done at scale on a fund level, and you’ll never incur foreign exchange fees for your trades.
Now that we’ve given you 4 reasons why investing your SRS money through Endowus, For those who don't know what an SRS account is, or how to get one, Feel free to read this. For everyone else, create an account, explore, and enjoy your holidays!