Definition

Substantially Equal Periodic Payment (SEPP)

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Substantially Equal Periodic Payment (SEPP) is a term used for the funds, which provides fine free withdrawal of deposits before its plan or before the age.

Generally, a plan with SEPP provides an arrangement in which the funds can be drawn penalty-free in a distributed manner for five years or the holder of account turning 59.5 years, whichever comes later.

In early withdrawal of the plan without SEPP, the account holder is liable to pay a penalty of 10% of the distributed amount. Withdrawal amount remains subject to income tax, whether it is with or without the SEPP plan.