SBI MF Retirement Benefit Scheme: 200% returns than FD! Term insurance of up to Rs 50 lakh! Should you invest? EXPLAINED

SBI Mutual Fund has launched SBI Mutual Fund Retirement Benefit Scheme — a new fund offer (NFO), which can be bought till 3rd February 2021. This SBI Retirement Benefit Scheme is a solution-oriented fund that offers four investment plans across a range of risk-profile — aggressive, aggressive hybrid, conservative hybrid and conservative. In this SBI mutual fund scheme, those investors who are investing through SIP (systematic investment plan) can get up to Rs 50 lakh term insurance too.

This SBI Schemes may also invest in foreign equities, gold exchange traded funds (ETF) and Real estate investment trusts (REITs) or infrastructure investment trust (InvITs), depending on the asset allocation and investment strategy. The plans can also invest in foreign securities, including overseas ETF, to the tune of up to 35 per cent in the aggressive plan. An investor can invest in this SBI Mutual Fund's retirement benefit scheme with a minimum investment of Rs 5,000.

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Benefit for investors

Speaking on the returns one can expect from this SBI Mutual Fund Retirement Benefit Scheme SEBI registered tax and investment expert Jitendra Solanki said, "This fund is expected to give up to 10 per cent returns to those investors who have more exposure in equity and hence in the long-term, this scheme looks better than bank fixed deposit."

However, Solanki said that this SBI scheme will face stiff resistance from the National Pension System (NPS) as it is also a retirement oriented scheme and gives income tax exemption on 60 per cent of the maturity amount. But, in SBI Mutual Fund Retirement Benefit Scheme, there is no such income tax benefit as Long Term Capital Gain will have to be paid at the time of maturity amount withdrawal.

Speaking on the net returns one can expect from the NPS Scheme; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "In Nps scheme, if an investor opts 50 per cent in equity and 50 per cent in debt account, then its NPS account will fetch around 10 per cent returns."

Solanki said that there is term-insurance offered to the investors in SBI Mutual Fund Retirement Benefit Scheme if an investor is investing via SIP. This may attract an investor as an NPS account doesn't offer any insurance.

So, it's all for the investors to decide what is the status of their portfolio and whether they want more money at their retirement or they want income tax exempted money at the time of retirement.