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What is ICICI Prudential Freedom SIP?
ICICI Prudential Freedom SIP combines Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWP) in one scheme. The motive of the scheme is to empower investors to reach their financial objectives. This scheme allows you to methodically build wealth through SIPs initially, followed by consistent returns via the SWP. You can select your preferred SIP and SWP schemes, determine SIP durations, and choose preferred SWP amounts. This systematic approach empowers you to realize your financial goals and ensures a stress-free future.
How does ICICI Prudential Freedom SIP Work?
ICICI Prudential Freedom SIP encourages you to invest regularly through SIP and allows you to withdraw regularly through SWP once the SIP period is over.
You must select a SIP scheme (‘Source Scheme’) for a pre-defined tenure. The Freedom SIP tenure is 8, 10, 12, 15, 20, 25 or 30 years.
Once the SIP tenure is completed, you need to select a ‘Target Scheme’ where the investments will be switched.
You have the freedom to choose the desired SWP amount. If you do not mention the
SWP amount, then the default SWP amount will be set. This default SWP will differ based on your SIP amount and tenure.
Let’s understand how Freedom SIP works with an example where the SIP amount is INR 10,000:
| Monthly SIP Amount | SIP Tenure in Yrs | Default monthly SWP Amount* |
| 10,000 | 8 | 10,000 |
| 10,000 | 10 | 15,000 |
| 10,000 | 12 | 20,000 |
| 10,000 | 15 | 30,000 |
| 10,000 | 20 | 50,000 |
| 10,000 | 25 | 80,000 |
| 10,000 | 30 | 1,20,000 |
*Default monthly SWP amount in case the investor mentions no SWP amount. Also, the SWP amount will vary based on the SIP amount invested and the tenure.
Why Should You Choose ICICI Prudential Freedom SIP?
You should choose ICICI Freedom SIP because:
- It allows you to invest in a suitable scheme based on your financial goals and risk tolerance levels.
- It is a suitable option for long-term investing.
- This disciplined investment approach keeps you invested throughout the entire SIP duration to access potential advantages.
- It allows you to pick a suitable tenure from the available options.
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Frequently Asked Questions (FAQs)
ICICI Prudential Freedom SIP is suitable for those who wish to invest systematically and withdraw regularly. Invest in Freedom 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.
Freedom 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. Freedom SIP is not tax-free. However, you can manage your withdrawals in a tax-efficient manner. Based on the fund 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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