To The Moon

Whenever the topic of investing comes up, one recurring question is: Should I use CPF or SRS funds for SGX stocks?

For me, the answer has mostly been no when it comes to CPF.

CPF vs. SRS: Two Different Stories

My SRS account is easy—there’s literally $1 sitting there, so it’s not even a consideration right now. CPF, though, is trickier because technically I can use it for investments. But I choose not to.

The reason is simple: CPF is my safe corner. The interest rates are fixed and predictable, which means I can calculate the yearly growth with certainty. That kind of assurance is rare, because almost nothing else in investing works in straight lines.

Stocks, on the other hand, are full of uncertainty. One year can bring soaring profits, the next can wipe out years of gains. Recessions, financial crises, and global shocks don’t come with warning labels. History, from the Great Depression to the Global Financial Crisis and the Covid crash shows how fragile the stock market can be in the short term.

That’s why CPF feels special to me. It’s not subject to market storms. It just grows steadily in the background, no drama.

SRS, however, is a little different. Its interest rate is relatively low compared to CPF. If money just sits there, it isn’t doing much. So if I ever built up a meaningful sum inside, I’d be more inclined to invest it in stocks (or other instruments) rather than let it idle. To me, it doesn’t make sense to leave that money sitting at a low interest rate for too long. If I had more in there, I’d want it working harder through investments.

So in my mind: CPF = certainty and security, while SRS = something I’d prefer to invest if the balance is substantial, since leaving it idle comes with a higher opportunity cost.

Diversification

Here’s how I think about it: if I use CPF for stocks, I’m effectively doubling my equity exposure. By leaving my CPF untouched, I’m automatically spreading out my wealth. I have one portion that grows with market risk (my investments) and another that grows steadily with no risk (CPF). That balance feels healthier to me.

Compounding in Different Ways

There’s also the compounding effect to think about. Stock compounding is powerful but only if I stay invested long enough and avoid panicking during downturns. That requires emotional resilience, and honestly, not everyone always has it (including me at times).

CPF compounding, though, is automatic. The growth is steady and guaranteed. No decisions, no stress, no second-guessing. Watching those numbers grow each year gives me quiet satisfaction, even if the pace feels modest compared to stocks.

SRS compounding, however, is in my hands. With low default interest, the only way to grow it meaningfully is to channel it into investments. To me, it feels like a pot of money meant to take risk, unlike CPF which is meant to be the safety net.

Mental Separation = Clarity

One underrated benefit of keeping CPF separate is the mental clarity it provides. I can treat CPF as my “bond” portion and my cash (and maybe SRS one day) as my “stocks.” That separation helps me avoid overcomplicating things.

It also means I don’t feel pressured to chase every investment opportunity. If the market tanks, I know CPF is still compounding quietly in the background. That buffer lets me stomach volatility without panicking.

My Bottom Line

It’s not that I don’t believe in the SGX or in equities in general. In fact, I think there are many solid Singapore companies worth owning. But for me, CPF has a different role: stability, security, and predictability.

SRS, on the other hand, feels more like an investment vehicle so if I ever accumulate enough in it, I’d happily use it for stocks, since its default returns don’t excite me.

So my current stance is simple: stocks for growth, CPF for certainty, and SRS for risk-taking once the balance is high enough to make it worthwhile.