Motilal AMC unveils fixed amount benefit (FAB) plan in SWP facility for retirees, investors

FAB will accomplish this by offering a product to investors that is easy to enrol in, offers a completely digitized dashboard, & provides a detailed calculator for customizing their cash flow requirements.

Notably, Motilal AMC launched this facility against a backdrop where Systematic Withdrawal Plans lie shadowed by conventional investment options such as Fixed deposits, dividend plans for cash flow requirements, Pension schemes, etc., owing to poor product awareness.

Also, the new feature will enable investors to withdraw the regular sum of their investments at a fixed percentage and predefined frequency of their original investments, irrespective of the movement in the market value of their investments. The balance component continues to generate returns, which provides tax efficiency as well as wealth generation relative to other investment avenues.

Under FAB, the investor can start with a minimum withdrawal amount of ₹500 per month or above depending on their cash flow requirement. The frequency can be marked as Monthly, Quarterly, or Annually.

Motilal AMC has kept the withdrawal rate at 6% as default which investors can change to choose from either 8%, 10%, or 12% per annum. The default withdrawal date is set at the 7th for every month but can be changed to choose from either the 1st, 14th, 21st, or 28th.

In a statement, Motilal said, a fixed amount of income every month will help the investor to incur fixed monthly expenses, manage their lifestyle, most importantly, comfort and peace of mind.

Thereby, with this plan, the investor not only would benefit from fixed income every month as well as wealth generation over the long term.

Navin Agarwal, MD & CEO, of Motilal Oswal Asset Management Company said, ” FAB provides an excellent option for not only retirees but also other investors seeking a reliable source of income, with the potential to generate steady returns on their investments. However, to make the most of this investment opportunity, investors must educate themselves on the intricacies of mutual fund returns and the necessary withdrawals for sustaining their desired lifestyle.”

Agarwal added, “by combining other securities with an SWP, people can maximize their investment returns and minimize risk, ensuring a comfortable and worry-free retirement.”

Also, Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, explained that the key feature of the FAB Plan is that it helps an investor to aim for an enhanced investment experience over traditional instruments. The design of the plan enables fixed withdrawal amounts irrespective of the short term market fluctuations, generating returns on the balance capital with tax efficiency as an added advantage.

“We have introduced a new feature which offers the magic of “Income Bhi and Wealth Bhi”,” Chaturvedi added.