Fixed Deposit: How is Freedom SIP different from SIP, know where you get more benefits..

Systematic Investment Plans (SIP) are a popular way of investing in mutual funds, where you deposit a fixed amount into the fund at regularly scheduled intervals, thereby providing flexibility for withdrawals. 

Freedom SIP -How to avail Freedom SIP-
Freedom SIP comes into effect after your regular SIP ends, which consists of two parts: a systematic investment plan and a systematic withdrawal plan. In SIP you commit to deposit a fixed amount over a specific period.

For example, if you choose to invest Rs 10,000 every month for 8 years, later you will have the option to choose your SWP plan. If you don't do this, the default SWP will be selected for you.

Let's break it down with an example from ICICI Freedom SIP. According to their website, if you invest Rs 10,000 monthly for 8 years, your default monthly SWP will be Rs 10,000. Extend the tenure to 10 years and the monthly amount will increase to Rs 15,000. By following this formula for 30 years, you can get Rs 1.20 lakh every month.

Now there is an important aspect to understand about your Freedom SIP investment. Your money goes into the source plan during your SIP period. When the SIP ends and the SWP starts, this money is transferred to a new plan, known as the target plan. If the source and target plans are the same, Freedom SIP will not be applicable.
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