SYSTEMATIC WITHDRAWAL PLANS

ALL YOU NEED TO KNOW ABOUT SWP

Published By Livemint | 28 Jan, 2023

Systematic withdrawal plans (SWPs) allow investors to withdraw money from existing mutual fund at predetermined levels

To generate this cash flow, SWP Plan redeems units of the mutual fund scheme at the chosen interval

 Existing investors looking for income at periodical intervals usually use SWP to fund expenses during retirement

SWP returns are tax-efficient, and there is no TDS on gains, unlike traditional investment

However, to use SWP one should have sufficient corpus at the time of retirement

SWPs allow investors to withdraw a fixed amount regularly while keeping rest of their investment to seek high returns