How SWP (Systematic Withdrawal Plan) Works

How SWP (Systematic Withdrawal Plan) Works

Looking to generate a regular income from your mutual fund investments? SWP might be the perfect solution!

Introduction

What is SWP?

SWP stands for Systematic Withdrawal Plan. It allows you to withdraw a fixed amount from your mutual fund investment at regular intervals.

How Does SWP Work?

When you opt for an SWP, a specified amount is redeemed from your mutual fund on a set date, and the money is credited to your bank account.

Benefits of SWP

Regular Income: SWP provides a steady income stream, ideal for retirees. Tax Efficiency: Only the capital gains portion is taxed, making it more tax-efficient compared to traditional income sources.

How to Start an SWP?

To start an SWP, select a mutual fund scheme, decide on the withdrawal amount and frequency, and inform your fund house or broker.

Ideal for Whom?

SWP is ideal for investors seeking a regular income stream without the need to liquidate their entire investment.

If you have ₹10 lakhs invested and opt for a monthly SWP of ₹10,000, the fund will redeem units equivalent to ₹10,000 every month.

Example

What is SWP in Mutual Fund?

Check Out

Check Out

Top Benefits of Systematic Investment Plans (SIPs)