For living a standard life & keep your savings safe forever even after Retirement starts investing in Freedom SIP by ICICI Prudential. Your active income ( Salary, Business or Professional Income) does not provide a guarantee of future returns. The savings (Passive Income) you make that’s the passive income it is used at the time of emergency and never stays stable keeps decreasing. Freedom adds the benefits here. They will never let your ‘Passive Income’ i.e. savings decrease they will stay constant or increasing. So, start investment today with ICICI Prudential.
What is Freedom SIP?
ICICI Prudential Freedom SIP is an investment that allows the investor to meet their financial goals. This is basically the added feature by the ICICI prudential only. In this, the investor is encouraged to invest regularly in a systematic way by SIP ( Systematic Investment Plan ). Enjoy the advantages of regular cash flows through SWP ( Systematic Withdrawal Plan).
Freedom SIP holds of three processes:
- SIP ( Systematic Investment Plan): SIP will be enrolled into an open-ended equity, hybrid or fund of funds scheme for a pre-defined time of either 8 years, 10 years,12 years or 15 years under the monthly frequency. The least amount for SIP shall be the least monthly SIP installment amount for the particular schemes.
- Switch: After completing the chosen SIP duration, the units acquired by Freedom SIP must be shifted to the selected target Scheme. The Switch must take place T+15 days or next business days where its non-business days( T is the last SIP Installment sate)
- SWP: After the transfer, SWP is activated for an amount according to the matrix below or according to the amount specified by the investor in the mandate form.
But thinking about Normal SIP investments, they also offer the same benefits. So, how Freedom SIP is different from this?
Benefits of Freedom SIP over Normal SIP
They are almost the same but there is a small difference in lock-in periods, Schemes of investments, returns, etc.
- Normal SIP is offered by all the AMCs ( Asset Management Companies) in India. But Freedom SIP is only offered by the ICICI Prudential.
- In Normal SIP there is no lock-in- period but in Freedom SIP there is a lock-in period of 8 years,10 years,12 years and 15 years.
- All the schemes/funds are available for SIP. In, freedom SIP you have to select funds of ICICI. The reason for providing selected funds is they for sure provide the positive returns and benefits. That’s why freedom SIP offers Sources Schemes: Hybrid, Equity, and FoF (Funds of Funds) and target schemes. They are working in the funds that will always offer a positive result to the investor.
- The Freedom SIP is offering a great scheme for all the investors that they will get free life insurance up to Rs.50 Lakhs (Terms & Condition applied). Normal SIP also gives offers but they never offer this type of benefit.
- Another point of taking Freedom SIP as an investment is that if you stay investment on the lock-in periods like 8 years in the 9th year you will be given the amount you invested in starting as a profit. Means, when your maturity period is over you, will get up to 10%, 8% or 6 %. SIP stays constant.
This image will explain how you invest in freedom SIP and after the lock-in period is over you will get the profit amounts every year. You can withdraw them together as well and continues to invest in SIP. But the condition to get the profit amount is you have to stay investment till the lock-in-period.
How does it work?
However, from the above image, it’s very clear that freedom SIP will switch your redemption to the target scheme. In words lets take an example: You have invested Rs.100 in this plan. As per the rules of ICICI investment plans you have a lock-in period of 8,10,12 or 15 years. We are taking 10 years of lock-in-period. After completing the maturity period your investment will switch to the target schemes and you can keep withdrawing some amount like 2,000 by the means SWP. In addition, this is the combo that Freedom SIP is offering and it works like this. Picking up the right target scheme is very important.
But what are the target schemes that your investment will switch into?
Eligible schemes under Freedom SIP
The Schemes of Freedom SIP categorize under the categories of Target schemes and Source Scheme.
- ICICI Prudential Bluechip Fund ICICI Prudential Asset Allocator Fund (FOF)
- ICICI Prudential Multicap Fund ICICI Prudential Balanced Advantage Fund
- ICICI Prudential Large & Midcap Fund ICICI Prudential Equity & Debt Fund
- ICICI Prudential India Opportunities Fund ICICI Prudential Multi-Asset Fund
- ICICI Prudential Smallcap Fund
- ICICI Prudential Midcap Fund
- ICICI Prudential Dividend Yield Equity Fund
- ICICI Prudential Focused Equity Fund
- ICICI Prudential Value Discovery Fund
2) Target Schemes
- ICICI Prudential Asset Allocator Fund (FOF)
- ICICI Prudential Balanced Advantage Fund
- ICICI Prudential Equity & Debt Fund
- ICICI Prudential Multi-Asset Fund
In reference to the above, the simple explanation is the Source schemes have further categories of Equity, Hybrid, and FoF. And the target schemes have categories ICICI Prudential Equity & Debt Fund, ICICI Prudential Multi-Asset Fund, ICICI Prudential Asset Allocator Fund(FOF) and ICICI Prudential Balanced Advantage Fund.
When you start investing in freedom SIP remember that if the market goes down their will no effect on your investments. The profit will remain the same. The concept is made in such a manner that it can sustain in all market conditions. After doing lots of research work then only this plan is introduced by ICICI. Start investing today!
Frequently Asked question
Freedom SIP is an optional feature offered by ICICI Prudential AMC. This feature does not in any way give assurance of the performance of any of the Schemes of ICICI Prudential Mutual Fund.
There are 2 types of scheme available in Freedom SIP :
1) Source Scheme – Equity, Hybrid, and FoF
2) Target Scheme- ICICI Prudential Equity& Debt Fund, CICI Prudential
Multi-Asset Fund, ICICI Prudential Asset Allocator Fund, and ICICI Prudential Balanced Advantage Fund.
After registration, the investor cannot edit any of the details such as the SIP tenure, the SIP Scheme, the SIP Amount, the SWP Scheme or the SWP Amount, etc. However, an investor can change the bank mandate mapped to the registered SIP, anytime during the SIP tenure, by presenting the respective SIP Mandate change form.
Yes, the Investor can cancel the SIP. On cancellation of SIP, all underlying Switch triggers and SWP will get deleted.
Normal SIP is permitted but only units acquired by ICICI Prudential Freedom SIP shall be processed on the date of Switch to Target scheme and the same will be prepared on a FIFO basis.
In case of investor death during the SIP tenure, the switch and the SWP will cease and the following transmission process will begin. In case of investor death post SIP tenure/switch but up to Dec 2099 (or till units are available), the SWP will stop and the following transmission process will begin.
Additional Purchase or Switch in is permitted under Freedom SIP source Scheme?
Yes, under the source scheme.