Investor Education

Now unleash financial freedom for your family

By MD & CEO SBI Mutual Fund

How often have you wondered that perhaps life could have been somewhat simpler than what it is? Have you wished that certain aspects and responsibilities of your life were rendered more effortlessly, yet effectively? Indeed, the advent of technology has helped us bridge some of the difficulties in our day-to-day lives, but still at times we fall short in one of the prime aspect of life – i.e. juggling between profession and family.

If there is one thing that everyone craves for more other than Money, it very well could be Time. Today, in this e-age time too seems to be moving faster than ever before. True that the clock still runs the same course of 24 hours, but while we are at work or occupied with something important, it seems like those many hours have just vanished in a matter of few minutes.

Every individual has his/ her own set of worries and priorities to sort out. In general, there is one common concern among most individuals, i.e. to ensure financial security for their loved ones. It could in the form of funding child’s higher education, a fixed sum to his/ her spouse/ sibling to manage household expenses and may be a regular allocation of funds to parents, so that they too are self-sufficient in their old age.

Very often, we set aside a fixed sum of money to meet each of the above listed need. However, at times due to unavoidable circumstances we end up missing or delaying the contribution, which could be troublesome to our near ones. Thanks to the innovative investment solutions by financial institutions, particularly mutual funds, now you can overcome such vulnerabilities with ease.

All you need to do, is build upon or set aside a lumpsum amount as an investment in a mutual fund scheme. For instance, you could consider investing in growth option of an open-ended Scheme of SBI Mutual Fund and set a SWP (Systematic Withdrawal Plan) in the same, in order, to help meet the need of regular payout for your loved ones.

How is this possible – SBI Mutual Fund has launched a unique facility called ‘Bandhan - SWP’ through which you can set a SWP with direct regular payout in your beneficiary’s (loved ones) registered bank account – it can be either your child / sibling aged 15 years and above, spouse or a parent, by just giving one-time instruction.

In order, to initiate the ‘Bandhan – SWP’ facility you either need to have an investment in growth option of an open-ended Scheme of SBI Mutual Fund or start a fresh investment in the same. Fill up the form for Bandhan - SWP facility, specifying beneficiary details, withdrawal amount, duration etc. Submit the form along with the beneficiary KYC –establishing the relationship status and bank account proof. Post which, the pay-outs will be directly credited to the beneficiary’s bank account at monthly frequency.

The benefits of ‘Bandhan - SWP’ facility can be summarized in the following five points:

  • You commit to the financial independency of your loved ones.
  • The auto-credit facility ensures that funds are made available in a time-bound manner to the beneficiary.
  • It gives a sense of financial liberty to the beneficiary as he/ she does not need to worry about the flow of funds. Your child/ sibling grows with a sense of confidence and learns the art of handling finances more efficiently.
  • While you take care of the requirement, your remaining capital is positioned for possible capital appreciation – thus creating a win-win situation for you. For instance, in order to to take care of his daughter’s educational expenses for post graduation Mr. XYZ invests Rs. 18 lakh, in January 2015, in an Equity Oriented Scheme and seeks that his daughter gets Rs. 15,000 per month by opting for ‘Bandhan - SWP’ facility. By the end of the third year, Mr. XYZ would have withdrawn Rs. 5,40,000 in 3 years, by way of Rs. 15,000 per month SWP, of which his principal component would have been Rs. 4,60,861 and the balance amount would be the gain on investments. Pursuant to which, his tax outgo would have been Rs. 1,908 – STCG (Short-term Capital Gains) for amount withdrawn within one year. Despite the withdrawal amount, at the end of January 2018 his investments value would have appreciated to Rs. 19,92,111.

Click Here for the detailed illustration.

Now, don’t you think this surely would be a smarter way to show that you care and commit towards the ‘bond of happiness’ with your loves ones.

To conclude, I would like to quote words of famous author Heather Schuck who wrote the book - The Working Mom Manifesto - “You will never be truly satisfied by work until you are satisfied by life”.

For details on ‘Bandhan - SWP’ facility, investors are required to refer website of the Fund

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of 

SBI Mutual Fund | Jul 01, 2018