16 Nov 2020
For CPF OA, only a certain percentage can be used to buy shares, is there a similar restriction for SRS? Or can I use entire balance to buy shares? Thanks
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Compared to CPF-OA, SRS investments has fewer restrictions with the exception of direct property investments and certain insurance products. You can most definitely invest into shares or use your entire balance to buy shares. The restriction is on the product providers on whether or not they offer a product to SRS monies.
However, sgmoneymatters discourages readers to use SRS to buy individual stocks and REITS. "Individual stocks and REITs are subject to corporate actions, and it can get quite complicated when you are not investing with cash.
For example, if a company issue rights, you need to top up to prevent your shares from being diluted, but you may not have enough SRS balance or you may not be able to top up if you have maximized the yearly limit of SRS contribution."
If this is a concern, you may want to look at Unit Trusts/ETFs/Index Funds instead.
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