Ways to invest and withdraw
What is SWP?
An SWP redeems a fixed amount from your mutual fund holding every month or quarter and pays it to your bank account, giving you a regular income.
How it works
Each withdrawal sells just enough units to pay the amount at that day's NAV. Only the gain part of each withdrawal is taxed, which usually makes an SWP more tax-efficient than IDCW payouts.
How long the money lasts depends on the withdrawal rate and returns. Withdrawing a modest share of the corpus each year lets the rest keep growing.
Example
From a ₹50 lakh corpus, an SWP of ₹25,000 a month withdraws ₹3 lakh a year, or 6% of the starting value.
Keep in mind
- A high withdrawal rate in a falling market can deplete the corpus quickly.
- Keep a year or two of withdrawals in a lower-risk fund.
Questions people ask
Is SWP income taxed fully?
No. Only the capital gain within each withdrawal is taxed.
Can an SWP last for ever?
If withdrawals stay below what the investment earns over time, the corpus can last indefinitely, but returns are not guaranteed. Our SIP + SWP story works through an example.
Related terms
General information for education, not investment advice or a recommendation of any scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in future. Last reviewed 25 October 2026.