Formula used for SWP Calculation
Month-by-Month SWP Balance Formula
Closing Balancem = (Opening Balancem - Withdrawal) × (1 + i)
i: Monthly Return Rate (Annual Rate / 12 / 100) | m: Current Month Index
About Systematic Withdrawal Plan (SWP)
A Systematic Withdrawal Plan (SWP) allows mutual fund investors to redeem a predetermined sum of money at fixed intervals (usually monthly). SWP is popular among retirees and passive income seekers because it provides regular income while allowing remaining funds to grow through compound returns.
How to use this calculator
- Enter your Total Investment Corpus currently invested in the mutual fund.
- Specify your desired Monthly Withdrawal Amount.
- Set the anticipated Expected Return Rate (% per annum).
- Choose the Withdrawal Tenure in years to view total cash payouts received and the remaining balance.
Frequently asked questions
What is Systematic Withdrawal Plan (SWP)?
SWP (Systematic Withdrawal Plan) allows mutual fund investors to redeem a fixed amount of money at regular intervals (monthly) while the remaining balance continues to grow with market returns.
How does SWP work in Mutual Funds?
Each month, mutual fund units equal to your chosen withdrawal amount are redeemed. If the fund return rate exceeds your withdrawal rate, your principal balance keeps growing over time.
Is SWP better than FD interest for monthly income?
SWP can be more tax-efficient than FD interest payouts because only the capital gain portion of the redeemed units is taxed, rather than the entire interest income.