ICICI Prudential Freedom SIP combines two effective investment strategies i.e. SIP and SWP that helps investors in fulfilling retirement income goals in life. Freedom SIP ICICI Prudential is a readymade Retirement income ( pension solution for long term investors) solution.
With small and steady contributions, one can make investment via monthly SIP and in retirement years take monthly pension ( payout via Systematic Withdrawal Plans aka SWP).
Under this option, investors have the option to select the SIP and SWP schemes, the SIP tenure, and the specified SWP amount. It can make investors’ futures stress-free by assisting them in systematically accomplishing their goals.
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What is Freedom SIP?
Freedom SIP is basically a Goal based Investment solution ( income in retirement years) which aims to provide regular income or cash flow in retirement years.
This is made possible via combining the two mutual fund investing options i.e. SIP and SWP.
In simple words, Start a Freedom SIP for set number of years and after completion of SIP period, take Monthly income till 2099
read more –Difference Between SIP, SWP And STP
Bestii Singh journey to ICICI Prudential Freedom SIP
Bestii Singh, 26, wants to safeguard his future. He also wants to get a desired income month on month for all his life.
He came to know about ICICI Prudential Freedom SIP. Eventually he takes the leap and start his SIP of Rs 10000 on monthly basis for 30 years i.e. till age 56.
Now after his age 56, he will get a monthly payout of 1.20 lac on monthly basis from his freedom SIP.
The payout amount depends on your investment duration and investment amount.
How does it work?
Freedom SIP is a simple combination of accumulation and distribution i.e. accumulate via small monthly contribution and distribution via systematically withdrawing the money via SWP.
Steps to start ICICI PRUDENTIAL FREEDOM SIP
- Choose source scheme
- Choose target Scheme
- Choose your SIP amount
- Choose investment duration 8/10/12/15/20/25/30 years
- Choose your SWP amount
- Get, set Go
How to start Freedom SIP
- SIP registration ( source scheme)for chosen duration
- Post SIP period, the accumulated money is transferred to the selected target scheme.
- ( If source and target scheme are same, there will be no need of switch)
- Post switch, SWP will be activated for an amount mentioned by the investor in the form.
This facility encourages investors to invest regularly in a disciplined manner through Systematic Investment Planning (SIP) and lets them enjoy the benefits of regular money via Systematic Withdrawal Plan (SWP) post completion of SIP period.
Freedom SIP enables investors to initially invest through SIP in a scheme (“Source Scheme”)
for a pre-defined tenure. Investors can choose from the given SIP tenures which could be either 8 years, 10 years, 12 years, 15 years, 20 years, 25 years or 30 years.
Post completion of pre-defined tenure, the investments would be switched to another scheme (“Target Scheme”) chosen by the Investor.
Investors have the freedom to choose their desired SWP amount. If they do not mention the SWP amount, they will receive the default SWP amount, which would vary based on the SIP amount and the SIP tenure selected by them.
Read more –SIP Pros & Cons – What YOU Must Know?
Why choose ICICI Prudential Freedom SIP?
- Readymade goal based investing solution
- Inculcate the habit of long term investing
- Freedom to choose tenure from 8,10,12,15,20,25 Or 30 years.
- Freedom to choose from wide range of schemes based on one’s need and risk appetite
What are the benefits of freedom sip
Readymade goal based investing solution – Many investors who do not want to opt for any kind of Goal based investment Planning or Financial planning, can opt for an readymade Retirement Solution in retirement years. Thus its a easy method to start a SIP and take income in later years.
Inculcate the habit of long term investing- Freedom SIP has a goal attached to it and therefore it gives a reason to remain invested and continue the SIP. Its always best to invest for a goal than random investment.
Freedom to choose tenure – One can choose investment tenure based oh his/her requirement, age etc.
Freedom to choose from a wide range of schemes – the investor can choose a scheme based on his/her risk profile and take income in later years.
Is freedom SIP tax free
No, freedom SIP is not tax free in nature. However, the investor does not need to give any tax in the depositing year, but definitely while taking income tax may be involved.
SIP Taxation-How SIPs Are Taxed
what is the minimum amount of freedom sip
Minimum Rs. 100/500 & in multiples of Re. 1 (Minimum number of installments – 6)
Quarterly: Minimum Rs. 5000/- & in multiples of Re. 1 (Minimum number of instalments – 4).
What is the difference between SIP and freedom SIP
SIP Refers to two systematic investment plan wherein you invest on a monthly basis and you withdraw your money at maturity or whenever you want.
Freedom SIP refers to a combination of two schemes SIP and SWP, wherein you start a monthly contribution (monthly systematic investment plan) in a source scheme for a predefined number of years.
After completion of this period, the money will be transferred in the target scheme from where your monthly income will start.
| SIP (Systematic investment Plan) | Freedom SIP |
| Monthly SIP (Systematic investment Plan) | Monthly SIP (Systematic investment Plan) |
| Maturity – Lump sum amount or opt for any other scheme option | Maturity – Accumulated fund is transferred to target fund and monthly income is given ( via SWP) |
what is free freedom SIP fund investment
The source scheme is the MF scheme in which you can start your monthly SIP.
The Target Scheme is the MF Scheme from which you can take monthly payout through SWP.
| The Source scheme (SIP) | The Source scheme (SIP) and the Target Scheme (SWP) can be the same for the following schemes |
| ICICI Prudential Asset Allocator Fund (FOF) | ICICI Prudential Asset Allocator Fund (FOF) |
| ICICI Prudential Balanced Advantage Fund | ICICI Prudential Balanced Advantage Fund |
| ICICI Prudential Bharat Consumption Fund | ICICI Prudential Bharat Consumption Fund |
| ICICI Prudential Bluechip Fund | ICICI Prudential Bluechip Fund |
| ICICI Prudential Business Cycle Fund | ICICI Prudential Business Cycle Fund |
| ICICI Prudential Dividend Yield Equity Fund | ICICI Prudential Dividend Yield Equity Fund |
| ICICI Prudential Equity & Debt Fund | ICICI Prudential Equity & Debt Fund |
| ICICI Prudential ESG Fund | ICICI Prudential ESG Fund |
| ICICI Prudential Exports and Services | ICICI Prudential Exports and Services |
| ICICI Prudential Flexicap Fund | ICICI Prudential Flexicap Fund |
| ICICI Prudential Focused Equity Fund | ICICI Prudential Focused Equity Fund |
| ICICI Prudential India Opportunities Fund | ICICI Prudential India Opportunities Fund |
| ICICI Prudential Large & Mid Cap Fund | ICICI Prudential Large & Mid Cap Fund |
| ICICI Prudential Long Term Equity Fund (Tax Saving) | ICICI Prudential Long Term Equity Fund (Tax Saving) |
| ICICI Prudential Manufacturing Fund | ICICI Prudential Manufacturing Fund |
| ICICI Prudential Nifty Midcap 150 Index Fund | ICICI Prudential Nifty Midcap 150 Index Fund |
| ICICI Prudential MidCap Fund | ICICI Prudential MidCap Fund |
| ICICI Prudential MNC Fund | ICICI Prudential MNC Fund |
| ICICI Prudential Multi-Asset Fund | ICICI Prudential Multi-Asset Fund |
| ICICI Prudential Multicap Fund | ICICI Prudential Multicap Fund |
| ICICI Prudential Nifty 50 Index Fund | ICICI Prudential Nifty 50 Index Fund |
| ICICI Prudential Nifty Next 50 Index Fund | ICICI Prudential Nifty Next 50 Index Fund |
| ICICI Prudential Passive Strategy Fund (FOF) | ICICI Prudential Passive Strategy Fund (FOF) |
| ICICI Prudential Retirement Fund Hybrid Aggressive Plan | ICICI Prudential Retirement Fund Hybrid Aggressive Plan |
| ICICI Prudential Retirement Fund Pure Equity Plan | ICICI Prudential Retirement Fund Pure Equity Plan |
| ICICI Prudential S&P BSE Sensex Index Fund | ICICI Prudential S&P BSE Sensex Index Fund |
| ICICI Prudential Smallcap Fund | ICICI Prudential Smallcap Fund |
| ICICI Prudential Nifty Smallcap 250 Index Fund | ICICI Prudential Nifty Smallcap 250 Index Fund |
| ICICI Prudential Thematic Advantage Fund(FOF) | ICICI Prudential Thematic Advantage Fund(FOF) |
| ICICI Prudential Value Discovery Fund and ICICI Prudential Innovation Fund. | ICICI Prudential Value Discovery Fund and ICICI Prudential Innovation Fund. |
Please note : In case, the investor does not fill in any SWP target scheme the default scheme shall be ICICI Prudential Balanced Advantage Fund.
In case one choose ICICI Prudential Retirement Fund or ELSS fund then the target scheme are mentioned below:
| Source Scheme | Target Scheme |
| ICICI Prudential Retirement Fund – Hybrid Aggressive Plan | ICICI Prudential Retirement Fund – Hybrid Aggressive Plan |
| ICICI Prudential Retirement Fund – Pure Equity Plan. | ICICI Prudential Retirement Fund – Pure Equity Plan/ Hybrid Aggressive Plan |
| ICICI Prudential Long Term Equity Fund (Tax Saving) | ICICI Prudential Long Term Equity Fund (Tax Saving) |
Also know : Top 3 Easy Ways To Cancel SIP In A Click
Step Up SIP Can Make You Millionaire- Know How?
ICICI Prudential Freedom SIP Form
ICICI freedom SIP disadvantages
Although ICICI freedom SIP is a readymade retirement solution, but it also has some disadvantages too.
- You get bound to a particular scheme – Equity market is dynamic and many changes may happen in due course of investment. The return of best scheme may not be that good tomorrow. But once you choose the scheme and tenure, it may become difficult to change the scheme.
- In contrast, what if the scheme performance detriorates with time.
- Not get the real Picture- Although income of 1.20 lac looks pretty awesome today but money value depriciates with time. Therefore one can strive for higher SIP amount today only.
Retirement solution from SBI MF – SBI Mitra SIP – A Powerful Tool To Get Monthly Income
Read more – LIC Or SIP Or Mutual Funds- Which Is Better?
