I don’t think that any of our readers would be without a SIP running for him. One of the basic tenets of our advisory and the best way to accumulate wealth is SIP or Systematic Investment Plan. SIP works best when it is tied up to your future goal. It is like an EMI for a better future. Freedom SIP from Franklin Templeton Mutual Fund is the next level of the good EMI, which is SIP 2.0 version wherein investors are offered the flexibility to tailor the good EMI to suit their needs and meet their goals. Let’s review this in details.
The Concept of Good EMI
Everyone knows what an EMI is and most of us are paying at least one EMI, if not more. However, while the thrill or initial euphoria of the purchase gets us through the initial EMIs, most of us fe
el some pain when these EMIs hit our bank account every month. So, is there an EMI that we would not mind paying a month on month or is there anything like a Good EMI?
What if you see a burger shop and on one burger it is written “75% Fat-Free”.
On the second variety, it is written: “25% Fat Only”.
Which one will you choose?
The answer is Perception. If you see from a sale point of view you will choose the first burger as 75 looks bigger than the number 25. But if you are health conscious, you will go to second.
Although, both burgers are same.
Similarly, what would you choose? – Paying an EMI to buy a costly gadget/appliance or paying an EMI to meet key life goals like your child’s education, their marriage, your retirement and the likes. Most of you would like to choose the latter. You can aim to achieve these life goals by investing regularly through a Systematic Investment Plan or SIP offered by a mutual fund which is like your ‘Good EMI’.
So Franklin Templeton Good EMI SIP can also be looked as an expense or an EMI. EMIs help you fund large expenses or acquire assets like house etc.. But SIP is an expense that you invest for a better future.
Franklin Templeton calls it a GOOD EMI because – you plan first and then buy/use funds. Have a look at this video to understand what is a Franklin Templeton Good EMI?
We have already written a lot in favor of SIPs, hence we fully encourage this new version of it or the how the Fund House is marketing it using this interesting concept.
But then, What Is Freedom SIP?
Freedom Sip is just the extension of Franklin Templeton Good EMI SIP options. These give more flexibility to the investor. The key features launched under freedom SIP as below.
Perpetual SIP – Since SIPs are aimed at helping investors meet their goals, it is important that they continue their SIPs till their goals are achieved in an uninterrupted manner. Perpetual SIPs allow investors to do this without the operational hassles of SIP renewals.
Step up SIP – Investments typically rise with incomes. Step-up SIP can help your investors plan this incremental investment in advanced through a single instruction.
Flexi-SIP – Through this facility, one can change a SIP amount for a particular month or quarter. Beneficial if you have irregular incomes.
Pause SIP – This helps to pause a SIP investment in times of any personal exigency. Cancellation involves stopping and then restarting with all paperwork again. Now no need for all this.
SIP amount change – Here one can increase or decrease their SIP amount with a single instruction across the SIP tenure. Earlier the mode was to stop old and make a new allocation, but now more flexibility with a single instruction.
Any date SIP – Now you can start your SIP on any date of a month as compared to the 5 fixed dates available earlier.
These features are available both offline and online as well as through multiple channels and across payment options like a debit card, NEFT/ RTGS, NACH, e-mandate, bill pay, etc. The e-mandate, for instance, is one of the newer features, which allows access to all these flexibilities with no paperwork.
Although, few of these features like Top Up and any date are with other fund houses too, but Freedom SIP has more new features like Pause SIP and Amount Change feature, with less paperwork.
Our View
As we said it is the packaging, and packaging plays an important part if the products are same and good. SIP will always remain the base of Financial Planning and try to understand in this way is a unique experience.
We want that investors understand the merits of Goal Based SIPs and plan their financial life. The added feature will help them stay maintain a healthy balance between ever changing financial position and dynamic goals of life.
At WealthWishers we always believe in:
- SIPs are for equity and debt schemes both. They should be invested as per the asset allocation of the investor.
- SIP in Equity should ideally be for 5 Years and in Debt SIPs can be planned for short and, medium term requirements.
The investor needs to just follow the Financial Planning route and get their Goals Planned, Risk Tolerance Checked and Portfolio Construction done.
So when are you starting your Franklin Templeton Good EMI?
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