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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).
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:
- Step1: Choose an SBI fund (growth option) and monthly SIP amount.
- Step2: Choose SIP Tenure. For SBI Mitra, the SIP must be for 8, 10, 12, or 15 years.
- Step3: The maximum monthly SWP will be in multiples of SIP instalments. For example, 1x, 1.5x, 2x, and 3x. You will simultaneously register for SWP in the same scheme or any other SBI mutual fund. The SWP will be triggered post the SIP period.
| 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 |
| 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.
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Benefits of the SBI Mitra SIP
The following are the key benefits of the Mitra SIP Scheme:
- Helps in creating long-term wealth for financial independence. Thus suitable for long-term goals that require regular cash flows.
- Assists in disciplined investing through SIPs.
- Provides regular cashflows at the end of the SIP tenure through SWP.
- Investors can pick any scheme for SIP and SWP on the basis of their risk tolerance levels and financial goals.
- Eliminates excess withdrawals, as the SWP is predetermined and capped as a multiple of SIP instalments.
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