How Does an SWP Work?

An SWP is linked to your mutual fund investment. Once you decide the amount and frequency of withdrawal (monthly, quarterly, annually, etc.), the fund house redeems the required number of units from your mutual fund holdings and credits the amount to your bank account. Over time, your total investment value decreases as units are sold.

For example:

• Suppose you invest ₹500,000 in a mutual fund.
• You set up an SWP to withdraw ₹10,000 every month.
• Each month, the fund house redeems units equivalent to ₹10,000 based on the fund’s Net Asset Value (NAV) and transfers the amount to you.