Get App
Last Updated : Jun 16, 2018 12:10 AM IST

This Father’s Day, gift financial confidence to your dad

Fathers remain central to children’s lives. They toil tirelessly and sacrifice their share to enable kids to achieve success in all spheres of life.

Inarguably, fathers deserve mementos in life that are a token of affection and gratitude for their trust, time and energy that they put behind their kids.

And, Father’s Day is upon us, which is a perfect day to show your father how much you value his advice and follow his pearls of wisdom at crucial moments.

This year for Father’s Day, instead of another watch, shirt, or any gadget, gift your dad something he might not have or planned- financial security.

As per a 2016 report by a RBI committee, by 2031, the number of people above 65 years of age is expected to rise the fastest among all age groups. However, only 23% save or plan for retirement.

The study stated that Indians are not even insuring themselves against rising health expenditures.

In this backdrop, gifting your dad a Systematic Withdrawal Plan (SWP) will help him retain his financial confidence, without any intrusion. SBI Mutual Fund has come up with ‘Bandhan SWP’ an unique family solutions facility where you can set a SWP from your mutual fund investments in eligible open-ended schemes, with a direct regular payout in your beneficiary (father’s) bank account by just giving one-time instruction.

The Bandhan SWP works well for the middle-aged investors, especially those approaching retirement so that they don’t have to sacrifice on a comfortable lifestyle.

It will enable your father to get a fixed amount regularly. The amount will be directly credited to his bank account and he won’t even have to visit his bank as all transactions will happen digitally.

Bandhan SWP is a hassle-free gift, wherein you just have to choose from your existing or new mutual fund investment and start a Bandhan SWP facility, specifying beneficiary details, withdrawal amount, durations, etc., and submitting their documents like proof of relationship, birth certificate, marriage certificate, etc., wherein the name of the specified beneficiary family member is mentioned.

It is noteworthy that withdrawals from SWP are tax-efficient when planned right. The reason primarily is that taxation in SWP is only on the gains and not the only whole amount you withdraw, hence tax is spread out/deferred over the period of your withdrawal and hence becomes more tax-efficient.

For debt schemes, any withdrawal within three years of investment are subject to short-term capital gains, which are added to your taxable income and taxed as per the tax slab you fall under. Withdrawals after three years are taxed at 20% after indexation. For equity-oriented funds, withdrawals within one year are subject to short term capital gains and over one year, it is proposed to be taxed at 10% for gains over Rs 1 lakh.

So, this Father’s Day, give your dad, gift of a lifetime. And confidence forever.

To know more on how SWP can be a special gift for your father this Father’s Day click here

Disclaimer: The above article is an initiative of SBI Mutual Fund and is intended to create awareness among the users.
Not sure which mutual funds to buy? Download moneycontrol transact app to get personalised investment recommendations.
First Published on Jun 14, 2018 11:19 am
Follow us on
Available On
PCI DSS Compliant