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What is HDFC Dream SIP?
The HDFC Dream SIP integrates both HDFC Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWAP) into a single program. The primary goal of this initiative is to enable investors to achieve their financial objectives. With this scheme, you have the opportunity to systematically accumulate wealth through SIPs in the initial phase, followed by a steady stream of returns through SWAP. SWAP will start only after SIP tenure is completed. You have the flexibility to choose your desired SIP and SWAP schemes (both can be the same or different), define SIP durations, and select preferred SWAP amounts. Currently, HDFC Dream SIP is available only through offline mode.
How does HDFC Dream SIP Calculation Work?
HDFC Dream SIP encourages you to invest a fixed amount regularly through SIP and allows you to withdraw through SWAP periodically after the SIP period.
HDFC Dream SIP has the following two options:
- SIP and SWAP are registered in the same Scheme
- SIP and SWAP are registered in different Schemes
You must select the SIP scheme, also called the Source Scheme, for a pre-defined tenure. The Dream SIP tenure is 7, 10, 12, 15, 20, 25 or 30 years. The default tenure is 20 years.
Once the SIP tenure is completed, the investments will be switched to the ‘Target Scheme’.
You can specify any SWAP amount. If you do not mention the SWAP amount while registering, SWAP shall be activated for an amount as per the following:
| SIP Tenure in years | Monthly SWAP Amount |
| 7 | 1x of monthly SIP amount |
| 10 | 1.5x of monthly SIP amount |
| 12 | 2x of monthly SIP amount |
| 15 | 3x of monthly SIP amount |
| 20 | 5x of monthly SIP amount |
| 25 | 8x of monthly SIP amount |
| 30 | 12x of monthly SIP amount |
Why Should You Choose HDFC Dream SIP?
You should choose HDFC Dream SIP because:
- It allows you to invest systematically in suitable schemes based on your financial goals and risk tolerance levels.
- A good long-term investing scheme that helps accumulate wealth and systematically withdraw corpus amount after the SIP tenure.
- It also allows you to pick a suitable tenure from the available options.
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Frequently Asked Questions (FAQs)
HDFC Dream SIP is suitable for those who wish to invest systematically and withdraw in the future. Invest in Dream SIP if you wish to invest in a scheme that allows you to build a significant corpus for a specified duration and withdraw the investments regularly after the tenure.
Dream SIP allows you to invest in a mutual fund scheme through the SIP route for a predetermined tenure. Once the SIP tenure is completed, you can systematically withdraw the corpus amount. On the other hand, for a normal SIP, you are investing in the fund of your choice for a tenure without any exit strategy.
No. Dream SIP is not tax-free. However, you can manage your withdrawals in a tax-efficient manner. Based on the type of fund (equity or debt) and capital gains, you can schedule your withdrawals to minimize tax.
Discover More
- What is SIP?
- What is Mutual Fund?
- Types of SIP?
- What is Perpetual SIP?
- Difference Between SIP Vs STP
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