SWP Guide 2026: Ab Mutual Fund Dega Har Mahine Salary!
Published on: January 16, 2026
Most people know how to invest money through SIPs, but very few know the smart way to withdraw it. A Systematic Withdrawal Plan (SWP) is a facility that allows you to withdraw a fixed amount of money from your mutual fund investment at regular intervals (usually monthly). It's the perfect way to create a "salary" or pension from your own accumulated wealth.
The Eye-Opener: SWP vs. Real Estate Rent
Let's understand the power of SWP with a real-life comparison that will surprise you.
Property Rent
Investment: ₹50 Lakh (Flat)
Buying a flat for ₹50 Lakh in a good city might give you a monthly rent of only ₹10,000 to ₹12,000.
Annual ROI: ~2-3%
Mutual Fund SWP
Investment: ₹50 Lakh (in Mutual Funds)
Investing ₹50 Lakh in a balanced mutual fund can easily generate a fixed monthly income of ₹30,000 to ₹35,000 via SWP.
Annual ROI: ~8-10% (conservative)
Who Needs SWP the Most?
- Retirees: It's the perfect tool to create a regular pension from your retirement corpus. It provides a steady cash flow for monthly expenses.
- Those seeking a second income: If you have a lump sum amount and want to generate a parallel income stream without taking a high-risk, SWP is a great option.
How is SWP More Tax-Efficient?
Unlike FD interest, which is fully taxable, SWP withdrawals are much more tax-efficient. Each withdrawal from a mutual fund has two components: the principal (your own money) and capital gains. You only have to pay tax on the 'capital gains' portion, not the entire withdrawal amount. This significantly reduces your tax liability compared to other fixed-income options.
Conclusion
Don't let your hard-earned money sit idle in a bank account or a low-yielding asset. Make your money work for you. SWP from mutual funds is a smart, efficient, and powerful way to generate a regular income stream that can fund your retirement or your life goals.