Estimate your monthly withdrawals using our smart SWP Calculator. Enter your total investment, expected return rate, withdrawal amount, and frequency to plan steady income from mutual funds.
A Systematic Withdrawal Plan (SWP) allows investors to withdraw a fixed amount periodically from their mutual fund investments. It’s ideal for generating a regular income, especially for retirees or those seeking passive income.
A = P × r × (1 + r)n / ((1 + r)n – 1)| Year | Opening Balance | Returns | Withdrawal | Closing Balance |
|---|---|---|---|---|
| 1 | ₹5,00,000 | ₹40,000 | ₹60,000 | ₹4,80,000 |
| 2 | ₹4,80,000 | ₹38,400 | ₹60,000 | ₹4,58,400 |
| 3 | ₹4,58,400 | ₹36,672 | ₹60,000 | ₹4,35,072 |
SWP in mutual funds may offer better post-tax returns than fixed deposits due to capital gains tax treatment and market-linked returns. However, FDs offer guaranteed returns. The choice depends on your risk appetite and income needs.
SWP withdrawals are subject to capital gains tax. For equity funds, gains held over 1 year are taxed at 10% (above ₹1L), and under 1 year at 15%. For debt funds, the gains are taxed as per your slab rate. Consult a tax advisor for specifics.
Yes, you can stop, modify, or pause your SWP instructions at any time. Most mutual fund houses allow you to do this via their online portal or by submitting a request form.
If your mutual fund units are exhausted due to withdrawals and market losses, the SWP will stop automatically as there are no remaining funds to withdraw from. It's important to monitor your portfolio.
Yes, SWP is ideal for retirees as it offers a regular income stream while keeping the remaining capital invested. It helps balance income needs with long-term capital preservation.
Absolutely. You can start an SWP from any accumulated corpus, whether it’s from a lump sum or from SIPs. Once your SIP investments have grown, you can activate SWP for regular withdrawals.
SWP involves market risks since mutual funds fluctuate in value. During volatile markets, there is a chance that your fund value decreases, which may reduce your investment faster than expected. Consider hybrid or conservative funds to reduce risk.