Best Swp For Monthly Income : SWP Means Systematic Withdrawal Plan in which we invest money once in a mutual fund and withdraw money partially on the monthly basis.
By doing this we enjoy market movement on the amount that we invested once and partial money withdraw every month.
Hi, This is Navnit Kumar and I am an AMFI Registered Mutual Fund Distributor.
I have researched well and helped many investors to set up SWP for monthly income.
Here I will share about Best Swp For Monthly Income which will fulfil your need.
Table of Contents
Best SWP For Monthly Income in 2025 | Best SWP Plan
SWP ( Systematic Withdrawal Plan) is suitable for those investors who have a large amount of money and I want to invest for monthly income.
This can be also done to enjoy retirement while investing. Selecting a Systematic Withdrawal Plan is also challenging and risk taking.
One should know first their risk taking capacity and should be able to hold the Fund without disturbing them.
Before knowing about the Best SWP For Monthly Income we should know the basics of SWP.
Let’s know More !
What does SWP mean ?
For example
Mr Ram Has invested 10 Lakh once and set a Withdrawal of 10,000 Per Month. By doing this He will get small money on the monthly basis and enjoy the market movement of 10 Lakh.
Let’s do some calculations :-
These days Stock market is doing well and Mutual Funds returns are very attractive.
So, let suppose Mr. Ram invested 10 lakh in a mutual fund that gave a return of 20%. It mean their total sum will be 12 lakh end of the year.
But, he also withdrew money 10,000 per month, by the end of the year he will withdraw 1,20,000. So he got a profit of 80,000 despite withdrawing 10,000 per month.
Let’s do the same Calculation by Using SWP Calculator
Result
| Month | Monthly Withdrawal | Remaining Balance |
|---|---|---|
| 1 | 10000.00 | 10143094.70 |
| 2 | 10000.00 | 10288380.11 |
| 3 | 10000.00 | 10435889.77 |
| 4 | 10000.00 | 10585657.71 |
| 5 | 10000.00 | 10737718.53 |
| 6 | 10000.00 | 10892107.31 |
| 7 | 10000.00 | 11048859.71 |
| 8 | 10000.00 | 11208011.90 |
| 9 | 10000.00 | 11369600.63 |
| 10 | 10000.00 | 11533663.19 |
| 11 | 10000.00 | 11700237.47 |
| 12 | 10000.00 | 11869361.91 |
Summary:
Total Profit (Interest Earned): ₹1989361.91
Final Value of Fund: ₹11869361.91
Above value is just for example and it is ued for 1 Year Time frame.
How to choose Best SWP For Monthly Income
Before starting SWP, we must know about the mutual fund that we are going to buy for SWP. Selecting Mutual fund we should know following things-
Risk
Choose less risky Mutual funds and do not get trapped to see the high return because high return mutual funds are very volatile and sometimes offer negative returns.
Expense Ratio
Select those funds which have low expense ratio, try to get those mutual funds whose expense ratio is less than 1%.
Tax Benefits
If you are looking for Tax benefits then you can choose those funds who offer tax benefits like Balanced Funds.
Withdrawal Rate
For SWP it is ideal to withdraw money 4%to 6% annually. A Smaller amount of withdrawal will help you to get benefits of Compounding.
Top 10 Best SWP For Monthly Income | Best SWP Mutual Fund
Here is best performing Mutual Fund that has give decent retrun in 1years to 5 Years. Below is give best Mutual Funds for SWP.
Investors can choose fund according to theri risk and retrun expections.
ICICI Prudential Pharma Healthcare and Diagnostics Fund – Growth
- Category: Sectoral/Thematic Fund
- 1-Year Return: 29.71%
- 3-Year Return: 23.27%
- 5-Year Return: 28.49%
- NAV: ₹37.4500
Motilal Oswal Midcap Fund – Growth
- Category: Mid Cap Fund
- 1-Year Return: 32.46%
- 3-Year Return: 28.10%
- 5-Year Return: 27.76%
- NAV: ₹97.7195
ICICI Prudential Small Cap Fund – Growth
- Category: Small Cap Fund
- 1-Year Return: 36.31%
- 3-Year Return: 24.42%
- 5-Year Return: 23.77%
- NAV: ₹81.5200
Nippon India Small Cap Fund – Growth Option
- Category: Small Cap Fund
- 1-Year Return: 39.27%
- 3-Year Return: 46.43%
- 5-Year Return: 21.59%
- NAV: ₹157.7593
ICICI Prudential Midcap Fund – Growth
- Category: Mid Cap Fund
- 1-Year Return: 44.29% (Highest)
- 3-Year Return: 20.72%
- 5-Year Return: 19.15%
- NAV: ₹266.5600
Motilal Oswal Flexicap Fund – Regular Growth
- Category: Flexi Cap Fund
- 1-Year Return: 27.86%
- 3-Year Return: 19.16%
- 5-Year Return: 16.15%
- NAV: ₹57.6669
Tata Small Cap Fund – Regular Plan – Growth
- Category: Small Cap Fund
- 1-Year Return: 36.85%
- 3-Year Return: 40.75%
- 5-Year Return: N/A
- NAV: ₹37.4214
HDFC Pharma and Healthcare Fund – Regular Plan – Growth
- Category: Sectoral/Thematic Fund
- 1-Year Return: 34.37%
- 3-Year Return: N/A
- 5-Year Return: N/A
- NAV: ₹16.1800
NAVI US Total Stock Market Fund of Fund – Regular Plan Growth
- Category: Fund of Funds (Overseas)
- 1-Year Return: 34.18%
- 3-Year Return: N/A
- 5-Year Return: N/A
- NAV: ₹16.3837
These NAV are recored on 05/02/2005
Which Mutual Fund is Best for SWP ?
Selection of funds for SWP depends upon various things. If an investor has a high risk taking capacity then he or she can go for Small Cap Fund or Mid Cap Funds.
If investors don’t want to take high risk then go for any Index fund. Index Fund have give average return of 11% over the long period of time.
What are the advantages of SWP ?
Doing investment in SWP may be a good idea as it has many advantages. Some the advantages are given below
Regular Income
If someone starts SWP then he/she can expect regular income. As Systematic Withdrawal Plan allows to withdraw amount. So this can be your regular monthly income.
Convenience and Automation
Once you start SWP and fix that date for partial monthly withdrawal then it will automatically amount the credit given in your bank account. So it is totally convenient to have money every month.
Potential for Growth
If your SWP mutual fund grows well then it will give you a great return while withdrawing money every month. However it depends on the selection of the Mutual Fund and market conditions.
What are disadvantages of SWP ?
SWP has many disadvantage also, lets know each one in detail-
Risk of Capital Erosion
If your Selected Fund will not grow in time then gradually the fund will decrease and the amount will exhaust soon.
Market Risk
Sometimes the time market does not move much and it gives a negative return Negative in that case loss may Occur.
Tax Implications
Selling Mutual funds may also incur some tax also. This can reduce the profitability.
Limited Flexibility in Emergency
If you sell the fund in an emergency or in need then it may be a loss.
Inflation Impact
In India some time Inflation becomes high, in that case if Mutual funds do not perform higher than Inflation then fund value will not remain the same. To Know the inflation impact use our SIP Calculator With Inflation, this will give you the idea of your SWP future value.
Best SWP For Senior Citizens
For senior citizens, it should be less volitile and less risky mutual fund for SWP. Best Option of Mutual Fund is Balanced advantage fund or Debt fund which insure fixed return. One can find Balanced advantage fund or Debt fund any AMCs. These fund have also low expense ratio, so it will be plus point while investing in SWP.
Conclusion
As we know that Investing in mutual funds is subject to market risk. So we should keep in mind all aspects and then go for SWP investment.
But if You take high risk then you will get a higher return also.
Before Opting SWP you must consult your financial advisor then choose the fund accordingly.
FAQs
What is the SWP return rate?
SWP return rate is depend upon selected fund. For example Nifty 50 Index Fund hase average return is 11%.
Can I stop my SWP?
Yes ! You can Stop SWP any time.
What is the maximum amount of SWP?
There is no maximum limit amount of SWP. You can choose any amount and start SWP.
How much corpus is required to earn 1 lakh per month?
To earn 1 lakh per month, You will need to invest 2 to 3 Cr in SWP. To understand the calculation use SWP calculator.
Is SWP good or bad?
SWP would be good if there is selction of mutual fund is good and withdrawal amount should be less then anually 4% of total investment.
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