Glossary term

SWP

Reverse of a SIP — fixed monthly withdrawals from a mutual fund corpus, ideal for retirement income.

A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed monthly amount from your existing mutual fund corpus. It's the mirror image of a SIP and the primary income mechanism for retired investors using mutual funds.

SWPs from equity funds are tax-efficient: each withdrawal redeems a small slice of units, so the LTCG ₹1.25 lakh/year exemption can be used repeatedly. Compare this to one big redemption, which uses the exemption only once.