Investment

SWP

Also known as: Systematic Withdrawal Plan, Withdrawal Plan

Systematic Withdrawal Plan - Regular withdrawal of fixed amounts from mutual fund investments.

Detailed Explanation

SWP (Systematic Withdrawal Plan) allows investors to withdraw a predetermined amount regularly from their mutual fund holdings. Unlike lumpsum redemptions, SWP provides steady cash flow while keeping remaining corpus invested. It's tax-efficient as each withdrawal is treated separately for capital gains calculation. SWP is particularly useful for retirement income or systematic profit booking from volatile investments like smallcaps.

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Related Terms

SIP

Systematic Investment Plan - Regular investment method in mutual funds for rupee cost averaging.

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Mutual Fund

Investment vehicle pooling money from many investors to buy securities like stocks and bonds.

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