ABSLI Assured Savings Plan

Monthly Investment Plans

Planting Seeds Of Wealth Every Month
Planting Seeds Of Wealth Every Month

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Give ₹1.2 lakhs/year for 12 years and Get Guaranteed# Benefit of ₹55.18 lakhs1

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  • Disclaimer

    #Provided all due premiums are paid.
    2 Healthy male age 21 years, premium paying term 12 years, policy term 13 years, benefit payout period 20 years, payment frequency annually, Assured Benefit Option: Income with Lumpsum Benefit, Sum Assured Rs.16.68 lakhs, Premium Rs.1.2 lakhs/year excluding GST), you get Rs.46.55 lakhs by age 54

What are Monthly Investment Plans?

Monthly Investment Plans (MIPs) offer a convenient and disciplined approach to building your wealth over time. They differ from One-Time Investment Plans (OTIPs) by allowing you to invest smaller, regular contributions (usually monthly) instead of a single lump sum. This approach can be beneficial for several reasons

Key Features:
  • iconbullet Affordability: MIPs make investing accessible by allowing you to start with smaller amounts that fit your budget. You can gradually increase your contributions as your income grows.
  • iconbullet Discipline: Setting up a monthly automatic contribution can help you develop an investment habit and ensure you stay consistent in your financial goals.
  • iconbullet Rupee-Cost Averaging: By investing regularly, you purchase units at different price points, potentially averaging out the cost per unit over time. This can be beneficial in volatile markets as it reduces the impact of buying at high points and missing out on lower prices.

How Do Monthly Investment Plans Work?

Monthly Investment Plans (MIPs) function like a systematic savings plan for investing. Here's how they work:

  • Choose a Plan: You select a specific MIP offered by a financial institution like a mutual fund company. Each MIP invests your contributions in a chosen asset class, such as equity, debt, or a balanced combination.
  • Set Up Automatic Contributions: You typically set up a standing order to automatically transfer your desired amount from your bank account to the MIP on a pre-determined monthly basis. This ensures consistent and disciplined investing.
  • Investment and Growth: Your monthly contributions are used to purchase units of the chosen investment scheme. These units then have the potential to grow in value over time through various means, such as stock appreciation in an equity-based MIP or interest accrual in a debt-based MIP.

Example: Let's say you decide to invest ₹1,000 per month in an equity MIP. Over the next year, you consistently contribute ₹1,000 every month, totaling ₹12,000 invested throughout the year. During this period, the value of the MIP units you hold may fluctuate due to market movements. However, over the long term, the potential for growth through capital appreciation or reinvested dividends exists.

6 Benefits of Monthly Investment Plans

1. Affordability: MIPs allow you to start investing with smaller, regular contributions, making them accessible even with a limited budget. You can gradually increase your contributions as your financial situation improves.

2. Discipline and Consistency: Setting up automatic monthly contributions fosters financial discipline and ensures you stay consistent with your investment goals, eliminating the need to remember individual investments.

3. Rupee-Cost Averaging: By investing regularly, you purchase units at various price points, potentially averaging out the cost per unit over time. This can be beneficial in volatile markets as it reduces the impact of buying at high points and missing out on lower prices.

4. Compounding: MIPs benefit from the power of compounding, where your returns also earn returns, potentially accelerating your wealth growth over the long term.

5. Wide Range of Options: MIPs come in various flavors, including equity-focused, debt-focused, and balanced options, allowing you to choose an investment plan aligned with your risk tolerance and financial goals.

6. Convenience and Flexibility: MIPs offer a convenient and automated way to invest, freeing you from the need to actively manage your investments. Additionally, some MIPs may offer flexibility in terms of increasing or pausing your contributions, providing some control over your investment strategy.

Remember, while MIPs offer these benefits, it's essential to understand the associated risks and consider your individual circumstances before investing. Consulting a financial advisor can be helpful in choosing the right MIP for your needs.

Deciding the Right Investment Amount for Monthly Investment Plans (MIPs)

Choosing the ideal amount to invest in an MIP requires careful consideration of several factors. Here are some key points to guide you:

  • Financial Goals: Define your investment goals (e.g., retirement planning, child's education). The amount you need to invest will depend on the target amount and your investment horizon.
  • Income and Expenses: Analyze your monthly income and expenses to determine a comfortable and sustainable contribution amount that doesn't strain your budget.
  • Risk Tolerance: Assess your risk tolerance. If you are comfortable with higher potential returns and market fluctuations, you might consider investing a larger amount. Conversely, a lower risk tolerance may suggest starting with a smaller contribution.
  • Existing Investments and Debts: Consider your existing investments and outstanding debts. Aim to prioritize debt repayment and ensure your MIP contributions don't hinder necessary financial obligations.
  • Emergency Fund: Maintain a healthy emergency fund to cover unexpected expenses. This ensures you don't need to withdraw from your MIP prematurely, potentially impacting your long-term investment goals.

Additional Tips:

  • Start small and increase gradually: Begin with a comfortable amount and consider increasing your contributions as your income grows.
  • Utilize online investment calculators: Many financial institutions offer online calculators that can help you estimate the potential future value of your MIP based on different contribution amounts and investment horizons.
  • Seek professional financial advice: Consulting a financial advisor can be beneficial, especially if you are new to investing or need help determining the right MIP contribution amount for your unique circumstances.

Remember, there's no one-size-fits-all answer when it comes to the ideal MIP investment amount. Carefully consider your individual financial situation and goals before making any investment decisions.

Different Types of Monthly Investment Plans (MIPs)

Type of MIP Investment Focus Potential Benefits Potential Drawbacks
Equity MIP Invests primarily in stocks. High potential returns, potential for long-term capital appreciation. Higher volatility and risk compared to other MIPs.
Debt MIP Invests primarily in fixed-income securities like bonds and debentures. Lower volatility and risk compared to equity MIPs, regular income generation through interest payments. Lower potential returns compared to equity MIPs.
Balanced MIP Invests in a combination of equity and debt instruments. Aims for a balance between potential growth and stability, provides some diversification benefit. Lower potential returns compared to pure equity MIPs, higher risk compared to pure debt MIPs.
Gold MIP Invests in gold or gold-linked instruments. Potential hedge against inflation, diversification benefit. Lower potential returns compared to equity MIPs, risk associated with gold price fluctuations.
Target Maturity MIP Invests with a specific maturity date in mind, aiming to mature your investment around that date. Predictable maturity value, potentially suitable for specific financial goals. Lower flexibility compared to open-ended MIPs, may underperform compared to other MIPs depending on market conditions.

Monthly Investment Plans by ABSLI

Plan Name Plan Type Investment Objective Key Features
ABSLI Vision LifeIncome Plan Traditional Savings Plan Provides regular income and life cover Guaranteed# income, bonuses, life cover, loan facility
ABSLI Nishchit Aayush Plan Savings Plan Wealth creation and life cover Life insurance cover, guaranteed# regular income and lump sum benefits
ABSLI Assured Savings Plan Savings Plan Guaranteed# savings and life insurance Lump sum benefits at maturity, and loyalty additions
ABSLI Guaranteed# Milestone Plan Savings Plan Guaranteed# returns and life cover for milestone achievements Guaranteed# additions, lump sum benefit on maturity, life cover, loan facility

Taxation of Monthly Investment Plans

The taxation of monthly investment plans can vary based on the type of plan and the prevailing tax laws. Here's a general overview of how these plans might be taxed:

Equity-Linked Savings Schemes (ELSS):

  • Investments in ELSS are eligible for tax deduction under Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakhs per annum.
  • Long-term capital gains (LTCG) over ₹1 lakh from ELSS are taxed at 10% without indexation benefit.

Mutual Funds (Other than ELSS):

  • Short-term capital gains (STCG) from equity-oriented funds are taxed at 15%.
  • LTCG from equity-oriented funds over ₹1 lakh are taxed at 10% without indexation.
  • For debt-oriented funds, STCG are added to the investor's income and taxed as per the applicable income tax slab. LTCG are taxed at 20% with indexation.

Unit Linked Insurance Plans (ULIPs):

  • Premiums paid for ULIPs are eligible for tax deduction under Section 80C up to ₹1.5 lakhs.
  • Maturity proceeds are tax-free under Section 10(10D)**, subject to certain conditions.
  • LTCG on ULIPs are tax-exempt if the annual premium is less than 10% of the sum assured.

Fixed Deposits:

  • Interest income from fixed deposits is taxable as per the investor's income tax slab.
  • TDS (Tax Deducted at Source) may be applicable if the interest income exceeds a certain threshold.

Public Provident Fund (PPF):

  • Contributions to PPF are eligible for tax deduction under Section 80C.
  • Interest earned and maturity proceeds are tax-free.

National Pension System (NPS):

  • Contributions are eligible for tax deduction under Section 80C and an additional deduction of ₹50,000 under Section 80CCD(1B).
  • At maturity, 40% of the corpus withdrawn as a lump sum is tax-free, and the remaining amount used to purchase an annuity is also tax-free. The annuity income is taxable as per the investor's income tax slab.

FAQs

MIPs are investment plans where you contribute a fixed amount regularly, usually monthly, towards a chosen investment scheme. This allows you to gradually build your wealth over time.
Unlike OTIPs where you invest a single lump sum, MIPs involve making regular, smaller contributions. This can be more affordable and potentially beneficial due to rupee-cost averaging.
  • Affordability: Start investing with smaller amounts, making it accessible to a wider range of individuals.
  • Discipline and Consistency: Automatic contributions ensure consistent investing and help develop financial discipline.
  • Rupee-Cost Averaging: By investing regularly, you purchase units at various price points, potentially averaging out the cost per unit over time.
  • Compounding: Your returns also earn returns, potentially accelerating your wealth growth in the long term.
  • Wide Range of Options: Choose from equity, debt, or balanced MIPs based on your risk tolerance and goals.
  • Convenience and Flexibility: Automatic contributions and potential flexibility in contributions (increasing/pausing) offer convenience.
  • Market volatility: Like any investment, your fund value can fluctuate based on market movements.
  • Lock-in periods: Some MIPs may have lock-in periods, restricting access to your invested amount for a specific time.
  • Lower potential returns compared to some OTIPs: Equity-focused MIPs may offer lower potential returns compared to investing a lump sum in equity directly.
Individuals seeking to:
  • Invest with smaller, regular contributions.
  • Develop financial discipline and consistency in investing.
  • Benefit from rupee-cost averaging and compounding over the long term.
  • Invest in a diversified manner through balanced MIPs.
Consider your:
  • Investment horizon: Long-term goals are better suited for MIPs.
  • Risk tolerance: Choose an MIP based on your comfort level with market fluctuations.
  • Financial goals: Select an MIP aligned with your specific financial goals (e.g., retirement, child's education).
  • Existing investments and debts: Prioritize debt repayment and consider existing investments before starting an MIP.
Minimum investment amounts can vary depending on the chosen MIP. Some may start with as low as ₹500, while others might have higher minimums.
Withdrawal options vary depending on the specific MIP. Some may allow partial withdrawals after a lock-in period, while others may have restrictions.
No, MIPs are not guaranteed#. The potential returns depend on the chosen investment option and market performance.
Consulting a financial advisor can be helpful, especially if you are new to investing or need help choosing the right MIP for your needs. They can provide personalized guidance based on your specific circumstances
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  • Disclaimer

    Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more details
    # Provided all due premiums are paid.
    **Sec 10(10D) benefit is available subject to fulfilment of conditions specified thereinz
    1 Healthy male age 21 years investing in ABSLI Assured Income Plus Plan, premium paying term 12 years, policy term 13 years, benefit payout period 25 years, payment frequency annually, Assured Benefit Option: Income with Lumpsum Benefit, Sum Assured Rs.16.68 lakhs, Premium Rs.1.2 lakhs/year excluding GST), you get Rs. 55.18 lakhs (Rs. 1.52 Lakhs p.a. for 25 years and Rs. 17.28 Lakhs as lumpsum at end of benefit payout period)46.55 lakhs by age 584
    ABSLI Vision LifeIncome Plan - This policy is underwritten by Aditya Birla Sun Life Insurance Company Limited (ABSLI). This is a traditional participating endowment plan. (UIN: 109N079V06)
    All terms & conditions are guaranteed throughout the policy term, except for the bonuses which would be declared at the end of each financial year. GST and any other applicable taxes will be added (extra) to your premium and levied as per extant tax laws. An extra premium may be charged as per our then existing underwriting guidelines for substandard lives, smokers or people having hazardous occupations etc.
    ABSLI Guaranteed# Milestone Plan - This policy is underwritten by Aditya Birla Sun Life Insurance Company Limited (ABSLI). This is a non-participating traditional insurance plan. All terms & conditions are guaranteed throughout the policy term. GST and any other applicable taxes will be added (extra) to your premium and levied as per extant tax laws. An extra premium may be charged as per our then existing underwriting guidelines for sub-standard lives, smokers or people having hazardous occupations etc. The insurance cover for the life insured (including minors) will commence on the policy issue date (UIN: 109N106V11).
    ABSLI Nishchit Aayush Plan -This is a non-linked non-participating individual savings life insurance plan. UIN No 109N137V06
    ABSLI Assured Savings Plan - This policy is underwritten by Aditya Birla Sun Life Insurance Company Limited (ABSLI). This is a Non-Linked Non-Participating Individual Savings Life Insurance Plan. All terms & conditions are guaranteed throughout the policy term. UIN: 109N134V08.
    ADV/4/24-25/14