Vinay Gupta
In today’s world, achieving financial security and planning for future goals can often seem daunting. However, with the innovative Freedom SIP offered by ICICI Prudential Mutual Fund, investors now have a versatile and structured approach to building wealth systematically and ensuring regular income.
What is Freedom SIP?
Freedom SIP is a combination of Systematic Investment Planning (SIP) and Systematic Withdrawal Plan (SWP). It allows investors to create wealth through regular investments (SIP) and later withdraw funds in a structured manner (SWP), making financial planning more seamless and stress-free.
How it works?
The facility encourages disciplined investing by allowing investors to choose their SIP amount, tenure, and schemes.
They can select both a Source Scheme for SIP and a Target Scheme for SWP. If schemes are the same, no switch occurs. After the SIP period ends, investments switch to the Target Scheme. Investors then specify an SWP amount, or a default is provided based on the SIP amount and tenure.
For instance, if an investor chooses a monthly SIP of ?10,000, the default SWP amount will vary according to the selected tenure, a 8-year SIP results in a default SWP of ?10,000, which rises to ?15,000 for a 10-year tenure. For 12, 15, and 20-year tenures, the default SWP amounts are ?20,000, ?30,000, and ?50,000, respectively. Extending the SIP to 25 years yields ?80,000, while a 30-year SIP provides ?120,000. This illustrates that longer investment periods enhance monthly withdrawal benefits.
Benefits of Freedom SIP
