What is SWP?

Systematic Withdrawal Plan, abbreviated as SWP, is a unique investment strategy offered by mutual funds. Unlike the traditional lump-sum investment approach, SWP allows investors to withdraw a fixed amount at regular intervals, providing a steady income stream while the remaining investment continues to grow.

How Does SWP Work?

Imagine you have a lump sum amount invested in a HDFC Bank mutual fund. With SWP, you can specify a predetermined amount and frequency for withdrawals. This systematic approach ensures a regular flow of funds into your account, serving as a reliable income source.

Key Components of SWP Calculator:

1. Investment Amount:

   • This is the initial lump sum amount you invest in a mutual fund.

2. Withdrawal Amount:

   • The fixed sum you decide to withdraw at regular intervals, such as monthly or quarterly.

3. Tenure:

   • The duration for which you plan to continue the systematic withdrawals.

4. Expected Return:

   • The average annual return you anticipate earning from your mutual fund investment.

Benefits of SWP:

1. Regular Income:

   • SWP provides a steady income stream, making it an ideal choice for retirees.

2. Flexibility:

   • Investors have the flexibility to choose the withdrawal frequency and the amount they wish to withdraw, aligning with their financial needs.

3. Wealth Growth:

   • While enjoying regular withdrawals, the remaining investment continues to grow, offering the potential for long-term wealth accumulation.

How to Use a SWP Calculator:

Investors can use this SWP calculator provides a clear projection of the systematic withdrawals and the total matured sum.

Real-Life Example:

Imagine this: you've invested Rs. 5,00,000 in HDFC Bank Mutual Fund for a year, anticipating a 10% return. Now, if you plan to withdraw Rs. 10,000 every month, you can use this SWP calculator. It helps you determine your monthly withdrawal amount and the total sum you'll receive in the end, making it easier to plan your finances.