Hi anon,
If you are topping up cash, Medisave will be a one-way since monies inside will only either be used to pay premiums for medical related insurance, or for medical related expenses. The 4% interest is however very attractive and will allow you to hit the BHS faster. Interest spill over after that will fund SA growth and help you hit FRS, which can only be a good thing.
Be aware that tax relief on MA topup is granted according to the following rules (quoting from IRAS)
Amount of Tax Relief VC-MA
The amount of tax relief given to the lowest of the following:
- Voluntary cash contribution directed specifically to Medisave Account or
- Annual CPF contribution cap for the year, less Mandatory Contribution (MC)* or
- Prevailing Basic Healthcare Sum(BHS)^, less the balance in Medisave Account before the voluntary cash contribution.
Particularly on point 2, if your mandatory contributions from work are very high or even at the CPF annual limit, then you might not be able to enjoy tax relief at all. In such a case, I would top up SRS instead. So you will need to do your sums to see if it will work for you.
SRS monies can be invested in many asset classes. Very broadly, you have guaranteed (SSB and annuities) and non-guaranteed (UTs, SG shares, SG ETFs, bonds). The ideal asset class is one that is suited to you. So I would advise you to spend time to understand the pros and cons of each asset class before deciding on what to deploy your SRS money in. You can sit with an independend financial advisor in order to gain a better understand of the options available, and then make a decision from there. So long as you don't leave it in your SRS account in the form of cash, that will be ok.
Hi anon,
If you are topping up cash, Medisave will be a one-way since monies inside will only either be used to pay premiums for medical related insurance, or for medical related expenses. The 4% interest is however very attractive and will allow you to hit the BHS faster. Interest spill over after that will fund SA growth and help you hit FRS, which can only be a good thing.
Be aware that tax relief on MA topup is granted according to the following rules (quoting from IRAS)
Amount of Tax Relief VC-MA
The amount of tax relief given to the lowest of the following:
Particularly on point 2, if your mandatory contributions from work are very high or even at the CPF annual limit, then you might not be able to enjoy tax relief at all. In such a case, I would top up SRS instead. So you will need to do your sums to see if it will work for you.
SRS monies can be invested in many asset classes. Very broadly, you have guaranteed (SSB and annuities) and non-guaranteed (UTs, SG shares, SG ETFs, bonds). The ideal asset class is one that is suited to you. So I would advise you to spend time to understand the pros and cons of each asset class before deciding on what to deploy your SRS money in. You can sit with an independend financial advisor in order to gain a better understand of the options available, and then make a decision from there. So long as you don't leave it in your SRS account in the form of cash, that will be ok.