SBI Mitra SIP

7 Mins

What is SBI Mitra SIP?

SBI Mitra SIP is a new investment option that offers a combination of wealth creation and helps reap the investment benefits systematically. Simply put, it is a combination of a Systematic Investment Plan (SIP) and a Systematic Withdrawal Plan (SWP) provided by SBI MF.

SIP is a method of investing a fixed amount into a mutual fund at regular intervals—often monthly. Instead of making a large one-time investment, you invest smaller sums consistently. This can help even out the impact of market ups and downs, as you buy more units when prices are low and fewer units when prices are high.

Whereas SWP is a method of withdrawing a fixed amount from a mutual fund at regular intervals—often monthly. Instead of redeeming the entire investment at once, you sell small portions over time. This creates a steady income stream and can help manage market volatility, as only a portion of the investment is redeemed on each withdrawal date.

SIP mode of investment helps in achieving rupee cost averaging by way of disciplined investments. On the other hand, SWP helps set up systematic cashflows through automated withdrawals.

SBI Mitra combines the benefits of both worlds and creates a comprehensive financial solution for investors.

How Does SBI Mitra SIP Work?

SBI Mitra is a simple investment tool that combines SIP and SWP in one investment. Let’s look at how Mitra SIP works:

1. Setting Up the SIP: Pick an SBI mutual fund (Growth Option), choose a monthly SIP amount, and select a tenure of 8, 10, 12, or 15 years. Each installment buys fund units at the prevailing NAV, helping accumulate a corpus over time.

2. Growth of Investments: In the Growth Option, any gains are reinvested rather than paid out as dividends, allowing compounding to potentially increase the value of your investment through market appreciation.

3. Simultaneous SWP Registration: At the same time you start your SIP, you register for a Systematic Withdrawal Plan in either the same scheme or another SBI fund. Post-SIP, withdrawals begin in multiples of your monthly SIP (e.g., 1×, 1.5×, 2×, 3×), providing a regular cash flow.

4. Fund Flow and Returns: After the SIP phase, your accumulated corpus either remains in the same fund for SWP or is switched to another. Returns depend on market performance—higher NAV means fewer units need to be redeemed for each withdrawal, which can extend the life of your investment.

SIP (Duration)	SWP (Multiple of SIP)
8 Years	1x
10 Years	1.5x
12 Years	2x
15 Years	3x

Note: It is important to note that SBI Mitra SIP doesn’t give assurance of the fund or guarantee of withdrawal through SWP. The SWP amount can be any amount. However, it is restricted to the multiples mentioned by the scheme.

Example

Let’s understand how the SBI Mitra SIP scheme works with the help of an example. Ms Sandhya invests INR 10,000 every month in the SBI Large Cap fund for a tenure of 10 years. She expects a return of 10% from her SIP investments.

Monthly SIP Amount	₹10,000
Investment Tenure (in years)	10
Total Investment Amount	₹12,00,000
Scenario 1: Expected Return (8% p.a.)	Approx. Final Corpus: ₹19,00,000
Scenario 2: Expected Return (10% p.a.)	Approx. Final Corpus: ₹20,50,000
Scenario 3: Expected Return (12% p.a.)	Approx. Final Corpus: ₹22,60,000
Maximum SWP (Multiple of SIP)	1.5x
Monthly SWP Amount	₹15,000

Here, Ms Sandhya will be investing a total of INR 12,00,000, and at the end of the SIP tenure (10 years), her SWP will start. The maximum amount of SWP per month is a multiple of SIP. Thus, Ms Sandhya can withdraw a maximum of INR 15,000 per month.

Therefore, the SBI Mitra SIP scheme helps save regularly and systematically withdraw at the end of the SIP tenure.

Popular Monthly Income Schemes

Eligibility and Requirements

To invest in SBI Mitra SIP, you must meet the following eligibility criteria:

You must be at least 18 years old.
You must have a valid PAN card.
You must have a bank account in your name.
You must have a minimum investment amount of ₹1,000.
You must have a minimum investment tenure of 6 months.

Additionally, you must provide the required documents, such as proof of identity, address, and income, to complete the investment process.

Investment Options

SBI Mitra SIP offers a range of investment options to suit your financial goals and risk tolerance. You can choose from various source schemes, including equity funds, debt funds, and hybrid funds. The target scheme can be a debt fund or a balanced fund, providing a steady monthly income through SWP. You can also choose the frequency of your SIP investments, such as monthly, quarterly, or annually.

About SBI Mutual Fund

SBI Mutual Fund is a leading mutual fund house in India, with a strong track record of delivering consistent returns to its investors. It is a subsidiary of the State Bank of India (SBI), one of the largest banks in India. With a wide range of mutual fund schemes, SBI Mutual Fund offers investment options to suit various financial goals and risk profiles. SBI Mutual Fund is committed to providing excellent customer service and ensuring that its investors achieve their financial objectives.

Mutual Fund Basics

A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Mutual funds offer a convenient way to invest in the stock market, providing diversification, professional management, and liquidity. When you invest in a mutual fund, you become a shareholder of the fund and are entitled to a proportionate share of the fund’s income and capital gains. Mutual funds are regulated by the Securities and Exchange Board of India (SEBI) and are subject to strict guidelines to ensure transparency and accountability.

Features of SBI Mitra SIP

Offers flexibility to choose schemes based on your financial goals and risk level.
Ensures financial discipline by encouraging consistent investments and limiting over-withdrawals through pre-set SWP limits.
Ideal for long-term wealth creation while providing a reliable source of cash flows after the SIP phase.
Combines the advantages of growth during the SIP phase and income stability during the SWP phase, making it a holistic solution for various life stages.

Benefits of the SBI Mitra SIP

Here are the main advantages of the SBI Mitra SIP scheme:

Builds long-term wealth: It’s designed to help you achieve financial independence, making it a great option for long-term goals that need steady cash flow.
Encourages disciplined investing: With SIPs (Systematic Investment Plans), you invest regularly without fail.
Ensures regular payouts: Once your SIP tenure ends, you receive regular payments through SWP (Systematic Withdrawal Plans).
Flexible choices: You can choose SIP and SWP plans based on your financial goals and risk comfort level.
Limits over-withdrawals: The withdrawal amount in the SWP is pre-set and capped, preventing excess withdrawals and helping you stick to your plan.

Conclusion

SBI Mitra SIP is a smart investment option that combines disciplined wealth creation with reliable cash flows. By merging Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWP), it provides a comprehensive financial solution tailored to meet the needs of investors at various life stages.

Whether planning for long-term financial independence or looking for a predictable income stream after your investment phase, SBI Mitra SIP offers the flexibility and structure you need. Its unique approach ensures you can steadily grow your wealth while enjoying controlled withdrawals aligned with your goals.

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