SBI MITRA SIP. A Powerful tool for your Retirement Planning

 


(A powerful tool for potential wealth creation through SIP +  Financial Independence through SWP)


SBI Mutual Fund has launched an unique product named SBI MITRA SIP. Earlier this type of scheme was launched by ICICI Prudential Mutual Fund named FREEDOM SIP. This product has the unique feature that will match the clients long term goals like retirement planning. This product enables client to create wealth in long term through Systematic Investment Plan (SIP) and subsequently the accumulated corpus can be withdrawn as monthly pay out through Systematic Withdrawal Plan(SWP). Its a powerful combination of systematic investment approach through SIP and monthly income generation through SWP.

What is SBI MITRA SIP?

MITRA SIP is a unique tool that is a combination of potential wealth creation and systematically reaping benefit of the same. You have to register for a SIP from a number of source schemes to choose from for 8/10/12/15 years and simultaneous registration of  SWP in the source scheme or any of the target schemes to be triggered post the end of the SIP period.

  • Systematic Investment Plan(SIP) is highly efficient tool for disciplined investment with an added advantage of rupee cost averaging.
  • Similarly Systematic Withdrawal Plan (SWP)is a tool for setting up systematic cash flow through automated withdrawal.
  • MITRA SIP is a tool that combines these powerful tools that can used to create a huge corpus  which subsequently withdrawn for future requirements, May be used as retirement solution in the old age.

How does MITRA SIP work?

Step 1 - You have to choose the monthly SIP amount into growth option of  source scheme.
Let us say monthly SIP of Rs.10,000.(for illustration)

Step 2 - You have to choose the SIP tenure in the source scheme. You have four tenures available to choose from. 8/10/12 /15 years.

Step 3 - If you choose 8 years as term, you can withdraw maximum 1.0 times of the SIP amount equivalent to Rs. 10,000 maximum as monthly SWP. If you choose 10 years as term, you can withdraw maximum 1.5 times of the SIP amount equivalent to Rs. 15,000 maximum as monthly SWP. If you choose 12 years as term, you can withdraw maximum 2.0 times of the SIP amount equivalent to Rs. 20,000 maximum as monthly SWP.. If you choose 15 years as term, you can withdraw maximum 3.0 times of the SIP amount equivalent to Rs. 30,000 maximum as monthly SWP.

Illustartion of MITRA SIP

An investor making SIP investment in source scheme  assuming growth rate @12% and SWP from target scheme assuming growth rate of 8%.
The above is for illustration purpose only. The NAVs considered for computation is hypothetical & are not actual NAVs of any scheme. Exit load, taxation and other deductibles, as applicable have not been considered in the above computation. MITRA SIP is an optional facility offered by SBI Mutual Fund. This feature does not in any way give assurance of the performance of any of the schemes of SBI Mutual Fund or provide any guarantee of withdrawals through SEP mode. MITRA SIP allows investors to switch the SIP investments to a target scheme, post completion of the SIP tenure & monthly SWP can continue from the target scheme. The investor may select any other SWP amount, but is restricted to the multiples mentioned above, and will be based on the initial SIP installment. For more details read all scheme Information documents and general terms and guidelines of the application form carefully.

Benefits of MITRA SIP

  • Helps building long term wealth for financial Independence.
  • Inculcates the habit of systematic approach of investment through SIP + the reaping benefit from regular cash flows through SWP.
  • One stop solution for goal based investing like retirement planning.
  • It offers a wide alternatives of Source and target schemes to choose based on your goal and risk appetite.
  • Eliminates the excess unwanted withdrawal due to its predefined monthly SWP limit as a multiple of SIP installment.

Disclaimer- Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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