What every investor must know about systematic withdrawal plans (SWP) from mutual funds that allow you to regularly withdraw money from mutual funds.
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed or variable amount from your mutual fund scheme on a predefined date. This could be every month, quarter, semi-annually or annually as per your needs. SWPs help create a regular flow of cash even as your principal gets a chance to appreciate. Customise according to your needs You can customise the cash flows as required. For instance, you can either withdraw a fixed amount or just the capital gains on your investments.
Suppose you invest Rs 10 lakh in a liquid fund that fetches 8 per cent annual return. If you want to secure your capital, instruct the fund house to withdraw Rs 6,500 per month. This will help you earn returns on your remaining amount. SWP can be a great additional regular income option for the retired.
We hope you found this useful. Please leave behind your comments and suggestions. For more, download our mobile app, visit our website www.fundoomoney.com and subscribe to our YouTube channel and digital magazine FundooMoney Indian. Also, follow us on Instagram, Pinterest and Slideshare.
