Best Systematic Withdrawal Plans (SWP) for Regular Monthly Income

A Systematic Withdrawal Plan (SWP) is a financial tool that enables investors to withdraw a fixed amount at regular intervals from their mutual fund investments. This offers a steady income, similar to a salary, post-retirement or for other goals. SWPs provide financial security by allowing structured withdrawals while preserving capital, making it an ideal option for retirees or anyone seeking regular cash flow without risking their investment.

How Does SWP Work?

1. Investing: The first step is investing a lump sum amount in a mutual fund.
2. Setting Up SWP: Next, you instruct the fund that there is a need to withdraw a fixed amount at set intervals—monthly or quarterly.
3. Withdrawal Process: The fund house sells a portion of your mutual fund units equivalent to the withdrawal amount and credits it to your account.
4. Continued Withdrawal: This process continues until you either cancel the SWP or your balance is depleted.

For example, if you invest Rs 1,00,000 in a fund with a Net Asset Value (NAV) of Rs 100, you can set an SWP of Rs 5,000. Each month, units will be sold based on the current NAV, and the withdrawal amount will be adjusted accordingly.

SWP Beyond Retirement

Contrary to popular belief, SWP isn’t limited to retirement planning. It can be used in various situations:

• Career Advancement: SWP can help cover your Executive MBA fees, synchronising with your EMI payments.
• Vacation Planning: You can invest today for a yearly vacation post-55, withdrawing Rs 3 lakhs annually for travel.
• Insurance Proceeds: Dependents can invest insurance payouts in SWP, ensuring monthly expenses are covered while the corpus grows.

Top 5 SWP Mutual Funds in India (2014-2024)

Assuming that an individual has invested a corpus of Rs 20,00,000 in October 2014 and sought a SWP of Rs 20,000 per month Ending on October 17, 2024.

Top 5 SWP Mutual Funds offer consistent returns and help generate regular income:

Conclusion on the Best SWP Mutual Funds in 2024

In 2024, SWP (Systematic Withdrawal Plans) remains a popular choice among investors for generating a steady stream of income while keeping their investments active in the market. The top SWP mutual funds in India offer a balance between capital appreciation and consistent payouts, making them ideal for those seeking to supplement retirement income or manage expenses.

The best SWP mutual funds in India for 2024 include funds with a proven track record of stable returns and consistent performance, such as Quant Flexi Cap, ICICI Prudential Equity & Debt, Mirae Asset Large Cap, and HDFC Balanced Advantage. These funds stand out for their robust performance, diversified portfolios, and relatively low risk, making them suitable for long-term wealth preservation alongside monthly withdrawals.

Overall, SWP provides a reliable, systematic way to secure monthly income while maintaining the potential for capital appreciation. It’s a versatile tool for meeting a variety of financial goals, whether for retirement, education, or lifestyle expenses, making it an excellent option for disciplined investors seeking regular cash flow.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.