ICICI SIP

ICICI Prudential Systematic Investment Plan / ICICI Pru SIP

ICICI Prudential SIPs refers to Systematic Investment Plans (SIPs) of various mutual funds from ICICI Prudential Mutual Fund House, which is a joint venture between ICICI and Prudential Holding Corporation. SIPs are a mode of payment, alternate to lumpsum amount payment wherein the investors do not invest a large amount of money at once but invest small sums of money periodically.

Find out which is the better investment mode – Lump Sum or SIP

How Do ICICI Pru Systematic Investment Plans Work

SIPs are like a Recurring Deposit where you invest a certain amount every month/quarter or year. With every new installment, the fund house or Asset Management Company (AMC) allots you more units of the mutual fund you have invested in. The units you purchase every month are not fixed as you own less units when markets are high and more when markets are down; this is called rupee cost averaging. The number of units depends on the Net Asset Value (NAV) of the fund on that day. SIPs are suitable for long term investments and for almost all types of investors as SIPs are not a financial burden on shoulders. You do not need to invest a large sum at once but small amounts as low as ₹500 per month could be set up for a SIP.

Advantages of ICICI Pru SIP

Apart from the fact that SIPs have a benefit of reducing the financial burden, it has two major advantages :

• Rupee Cost Averaging
• Power of Compounding

SIPs also reduce the burden of financial risk because the average cost is lowered as it spreads the purchase price over time and market volatility risk is also challenged. This is called Rupee Cost Averaging. Simultaneously, the returns earned on the SIP each month are reinvested and the next returns are calculated on the invested amount plus the previous returns. This is Power of Compounding.

Taxation of ICICI Prudential SIPs

Taxation of any fund depends on its portfolio construction as to which asset class the fund is more exposed to. If the investment mandate is of equity and equity-related instruments, then the fund will be taxed as per the SEBI (Securities & Exchange Board of India) norms of Equity Funds. If the fund corpus is invested majorly in debt and related securities, then it will be taxable as per rules of Debt Funds.

In Equity Funds, Long Term Capital Gains/LTCG (when you hold your investment for a minimum of 1 year) are exempted from tax up to ₹1 Lakh and above that these are taxed at 10%. Short Term Capital Gains/STCG is taxed at 15%. For Debt Funds, the minimum holding period of an investment to be considered as LTCG is 3 years and is taxed at 20% with indexation benefits. STCG over Debt Funds are calculated as per the investor’s tax slab.

How to Invest in ICICI Prudential Systematic Investment Plans

• Go to the official site of ICICI Prudential AMC and go to the drop down menu of ‘Invest”. Select the fund you want to invest in and then either sign in or sign up with your mobile number. Fill in the application form with all details such as Applicant’s name whether one or more (maximum 3), address, phone numbers, SIP amount, SIP date, Bank details, nominee, PAN. etc.
• You can invest through any online mutual fund investment platform such as Paisabazaar.com where you can select the funds based on ratings and returns and also compare those to other funds from the same AMC or same category of funds from different fund houses

Calculate your SIP Returns on expected ICICI Prudential SIP Rate of Interest (ROI) Here

Best ICICI Prudential SIPs

Fund Name	3 Year Returns (%)	5 Year Returns (%)
ICICI Pru Regular Gold Savings Direct Fund	22.47	14.73
ICICI Pru All Seasons Bond Fund	9.54	9.56
ICICI Prudential Gilt Direct Fund	9.70	9.32
ICICI Prudential Credit Risk Fund	9.20	9.04
ICICI Pru Bond Fund	9.39	8.73
ICICI Pru Short Term Fund	8.80	8.69
ICICI Pru Medium Term Bond Fund	8.70	8.60
ICICI Pru UST Fund	8.35	8.59
ICICI Pru Corporate Fund	8.30	8.29
ICICI Pru Debt Management Fund	8.06	8.28

(As per the descending order of 5 year returns, Source: Value Research, data as on April 6, 2020)