Systematic Withdrawal Plan Calculator

A Systematic Withdrawal Plan (SWP) in mutual funds allows investors to withdraw a fixed amount of money at regular intervals, offering a consistent income stream while keeping their investments active. It’s ideal for those who require periodic payouts, such as retirees or investors who wish to supplement their income without fully liquidating their mutual fund holdings.

Through an SWP, you can choose the amount and frequency of withdrawals, whether monthly, quarterly, or annually. You can also opt to withdraw only the gains generated by your investments, allowing your principal to remain intact and continue growing. This feature makes SWP an excellent way to manage cash flow while ensuring your long-term investment goals stay on track.

On the scheduled withdrawal date, the mutual fund units are sold, and the funds are transferred directly to your bank account. SWP offers a tax-efficient way to access your money, as you are only taxed on the capital gains, not the entire amount withdrawn.

Whether you’re looking to manage retirement income or need a flexible withdrawal option for your financial planning, an SWP provides a stable and efficient solution, ensuring you maintain liquidity while keeping your long-term financial strategy intact.

An SWP allows investors to withdraw a predetermined amount from their mutual fund investments at regular intervals, providing a steady income stream.

Here’s how SWP works:

1. Initial investment: You start by investing a certain amount in a mutual fund. The investment is divided into units based on the fund's Net Asset Value (NAV) at the time of investment. For example, if you invest ₹1,00,000 and the NAV is ₹10, you acquire 10,000 units.
2. Set up withdrawals: You can set up the SWP to withdraw a specific amount at a predetermined interval. For instance, you might choose to withdraw ₹5,000 every month.
3. Value changes: Each month, the fund's (NAV) price might go up or down. For instance:
   • If the NAV is ₹10 when you withdraw, you get 500 units (₹5,000 ÷ ₹10).
   • If the NAV goes up to ₹15 the next month, you’ll only need to redeem about 333 units (₹5,000 ÷ ₹15) to get the same ₹5,000.
4. Units decrease: Every time you withdraw, the number of units you own decreases. This continues until you stop the withdrawals or have too few units left.
5. Investment value: If the fund's price exceeds what you take out, your overall investment may still grow. If it goes down, you might need to take out more units, which could reduce your total investment value.
6. Ongoing process: This process continues as long as you choose to use an SWP. Depending on your needs, you can change how much you take out or how often.

The Kotak Securities SWP Calculator is a simple tool for planning withdrawals and monitoring investment performance over time. It's easy to use and provides the information you need quickly.

Here’s how to use it:

1. Enter the total amount you’ve invested in mutual funds. For example, if you invested ₹5,00,000, enter that amount.
2. Specify the monthly withdrawal amount you’d like to receive. Let’s say you want to withdraw ₹20,000 per month.
3. Input the expected rate of return on your investment. For example, enter that value if you expect an annual return of 8%.
4. Set the tenure or duration of your SWP in years, depending on how long you want the withdrawals to last.
5. Finally, click “Calculate” to view the results, including your total investment, total withdrawals, and the final balance of your investment at the end of the tenure.