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How to plan?

How SWP works?

Let say if you have a corpus of Rs. 10 lakhs invested in a mutual fund and wish to withdraw Rs. 6,000 every month, here is how it works

Date Opening Balance (Units) NAV Total Amount Units Redeemed Closing Balance
01 Apr Rs. 10,000 100 Rs. 10,00,000.00 60.00 (6000/100) Rs. 9,940.00
01 May Rs. 9,940.00 105 Rs. 10,43,700.00 57.14 (6000/105) Rs. 9,882.86
01 June Rs. 9,882.86 103 Rs. 10,17,934.58 58.25 (6000/103) Rs. 9,824.61

The above data is for illustrations purpose only to explain the concept.

When the market rises, although you have withdrawn Rs 18,000 in 3 months, you still benefit on the balance part of your investment.

The icing on the cake is when the money is invested in an equity-oriented fund, it has the potential to beat inflation and create long-term wealth. Therefore, a SWP is more beneficial than just simply withdrawing money from savings corpus.

Why SWP is good for you?

So the next time you need regular cash flow for your expenses, all you need to do is fill in basic information stating the name of the scheme, the start date and the amount you would want to withdraw each time. You can then relax considering the withdrawal process will continue till the date specified by you or till the folio balance exists, whichever is earlier. The SWP facility removes the need for repeated redemption transactions.

Disclaimer:Exit load may be applicable with SWP. Please consult your financial, tax and legal advisor before making any financial decisions.

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Disclaimer: This material is created to explain basic financial / investment related concepts to investors. Mutual Fund does not provide guaranteed returns.Investors are advised to seek professional advice from financial, tax and legal advisor before investing.