Mutual fund SWP. Effective way of earning steady monthly income every month.

Описание: Mutual fund SWP. Effective way of earning steady monthly income every month. #mutualfunds #swp #finance #savings #bankfd #investment #income #fd #mf #banking #tips #nri #pension #monthlyincome #equity #debt #financialplanning #tax #sip
What Is a Systematic Withdrawal Plan (SWP)?

A systematic withdrawal plan (SWP) helps you withdraw money from your mutual fund in a regular and planned manner. You can choose how much money you want to withdraw and how often you want to withdraw it, i.e., the frequency, which is often monthly.

After you set up an SWP, the fund house will redeem the required units from your mutual fund holdings and credit the amount in your bank account. In a way, this process is just the opposite of SIPs.

The main advantage of an SWP is that it provides a steady income stream. It’s especially useful for people who want a regular income from their investments, such as retirees.

Effective Uses of SWP

Regular income: In the current scenario, income from a single income may not be enough to fund your expenses; you may need a supplementary income. In this case, SWP comes handy as it allows you to withdraw a fixed amount from your mutual fund investments periodically. In this way, you can have a second source of income to supplement the primary one.

Capital Preservation: Instead of redeeming your entire mutual investment in one go, SWP allows you to withdraw from your investment systematically. This way, a big portion of the portfolio remains invested for the long term and continues to grow.

Pension Income: If you are going to retire in the coming years and you have not invested in any retirement savings scheme, SWP can be one of the options you may consider. Under SWP, you can set how much amount you want to receive after retirement, and gradually, when you retire, you can avail of regular income from SWP as a pension.