Mutual Fund SWP Calculator 2023
SWP calculator helps in determining the final value of your mutual fund investment after withdrawing a fixed amount regularly while considering the interest and returns earned from the investment.
What is SWP in Mutual Fund?
SWP stands for Systematic Withdrawal Plan. A SWP allows an investor to withdraw money at predetermined intervals. Instead of withdrawing the entire investment at one go (lump sum withdrawal), investors can withdraw the money in a phased manner. In a SWP, one can customize the amount and the interval of withdrawal. Investors can just withdraw the capital gains or a fixed amount monthly, quarterly, semi-annually, or annually.
SWP is the better option in fluctuating markets. It allows investors to stay invested in mutual funds while allowing a partial withdrawal. Hence, investors have a fixed, regular income from their investments. By using the SWP option, investors can create a second income apart from their regular income to meet their needs. SWPs are also useful when an investor is nearing a goal and needs money for fulfilling it. SWP ensures that the goal can be accomplished with no cash crunch. The withdrawn money can be reinvested or retained by the investors as per their needs. SWP calculator determines the final amount left in the investment after the withdrawals. One can use SWP calculator to estimate the amount required for their financial needs.
- SIP Calculator
- Mutual Fund Returns Calculator
- Step Up SIP Calculator
- STP Calculator
- Mutual Fund Lump Sum Calculator
Best Mutual Funds for Systematic Withdrawal Plans
|Fund Name||AMC Name|
|ICICI Prudential US Bluechip Equity Fund||ICICI|
|Parag Parikh Flexi Cap Fund||Parag Parikh|
|Canara Robeco Bluechip Equity Fund||Canara Robeco|
|Canara Robeco Emerging Equities Fund||Canara Robeco|
|Nippon India Value Fund||Nippon India|
SWP Calculation with Example
SWP calculator performs complex calculations within a matter of seconds. All one has to do is enter the values for investment, withdrawal, expected mutual fund returns and tenure. The SWP calculator returns the value of the investment left in the mutual fund after the withdrawals. This value is termed as the final value. Here is a small snippet of how the SWP return calculator works.
Let’s take an example of Ms. Akhila, who plans to invest INR 5,00,000 in mutual funds. She wishes to withdraw INR 25,000 a month for the next five years by opting for a Systematic Withdrawal Plan, starting one month after her investment. The expected rate of return is 10%. Let’s assume she invested on 1st Jan 2023 and starts withdrawing on 1st feb 2023.
|Month||Opening Balance||Interest||Withdrawal||Closing Value|
The above table shows the opening balance, the returns earned, amount withdrawn, and the closing balance. The opening balance shows the balance left in the mutual fund at the end of the previous month. The closing balance shows the balance after adding the interest earned and subtracting the withdrawal amount.
After 21 months, Ms. Akhila has withdrawn INR 5,25,000 from her investments through a Systematic Withdrawal Plan and has a balance of INR 19,284 left.
The SWP calculator works similarly. It calculates the final value left in the investment after all the withdrawals and interest earned.
How to use Scripbox SWP calculator?
Scripbox’s Systematic Withdrawal Plan SWP Calculator is quite easy to use. Enter the correct details in the fields, and the SWP return calculator takes care of all the computations and generates the Final value.
Enter the following details:
- Total Investment: The total investment amount that you wish to invest in a scheme.
- Withdrawal amount per month: The amount you desire to receive in a month.
- Expected Returns (%): Expected mutual fund returns from the investment made in the scheme.
- Tenure: The duration up to which you wish to withdraw the invested amount regularly.
How can Scripbox SWP calculator help you?
The SWP calculator makes it easy to calculate the monthly withdrawal amount and the final amount. It becomes tedious to do all the calculations manually. Therefore, Scripbox’s SWP calculator will quickly help in getting precise computations.
The primary purpose of opting for an SWP is to have a regular monthly income. This option is popular amongst retired and senior citizen investors. Scripbox’s SWP calculator is easy to use and has the following benefits:
- The Systematic Withdrawal Plan (SWP) ensures monthly income while earning a return on mutual fund investments. The SWP calculator helps in computing both.
- The SWP calculator is simple and doesn’t require any special skills to use. The investor just needs to enter the variables in the fields, and the calculator does the computation.
- Investors can try the SWP calculator with various withdrawal amounts and determine the maturity amount. This helps the investor to decide on the monthly withdrawal amount that suits them the best.
- The SWP calculator is readily available online.
Frequently Asked Questions
1. Systematic Withdrawal Plan’s (SWP) primary advantage is a regular fixed income. And for employees, it is a source of additional income.
2. When planned, SWP can be a steady source of income to meet financial goals. It ensures there is enough money available for financial goals.
3. SWP allows a tax benefit on long term capital gains up to INR 1 lakh, gains above INR 1 lakh are taxable.
SWP (Systematic Withdrawal Plan) works opposite to SIP (Systematic Investment Plan). In a SIP, an investor invests a fixed amount regularly, hence increasing the number of units he/she holds in that mutual fund. In SWP, the investor withdraws a fixed amount regularly, hence decreasing the number of units he or she holds in that mutual fund.
By withdrawing a certain amount of money regularly, the investment is reduced by a certain number of units. Hence, the value of the mutual fund investment goes down by the number of units withdrawn.
Under the SWP Scheme, the withdrawal options are based on the frequency of the withdrawal. An investor can choose to withdraw their investments monthly, quarterly, semi-annually, or annually. Withdrawals can be made either from the capital amount or appreciated amount. The latter option is known as the Appreciation Withdrawal Option. In this option, the investor can choose to withdraw only the appreciated amount on a desired withdrawal interval basis.
Withdrawals may have a detrimental effect on the value of the investment. Here the SWP calculator helps to determine the final value. Therefore, it is recommended to keep in mind the goals and needs before opting for the plan.
Systematic Withdrawal Plan is an optimal solution during retirement. People usually prefer traditional sources for investment to invest the lump sum amount received during retirement. These traditional sources attract taxes. SWP is a tax-efficient way of earning a regular income. As a result, retirees can earn a regular income with the added advantage of capital appreciation.
SWP is not just for the retiring people; it also for people with multiple dependents. Employees with family responsibilities who require additional income can also opt for the SWP option. Children’s educational needs, travel needs, financial goals approaching the deadline are a few reasons why individuals should choose a SWP option.
Systematic Withdrawal Plan(SWP) is a better option in fluctuating markets. It allows the investors to stay invested in the mutual fund while allowing a partial withdrawal. This way, investors have a fixed, regular income from their investments. By using the SWP option, investors can create a second income apart from their regular income to meet their needs. SWPs are also useful when an investor is nearing a goal and needs money for fulfilling it. SWP ensures that the goal can be accomplished with no cash crunch, as, in fluctuating markets, the NAV of the investment is affected. Investors can use the SWP calculator to determine the final value of an investment after withdrawing a fixed amount regularly while considering the interest earned from the investment.
Systematic Withdrawal Plan SWP is the best alternative available for retirees to earn a regular fixed income when compared to other traditional sources. Not just for retirees, but SWP is also a good option for employees who are looking for additional sources of income to meet their family requirements. Children’s educational needs, travel needs, financial goals approaching the deadline are a few reasons why individuals should opt for an SWP.
Systematic Withdrawal Plan SWP is always a better option than dividend plans. This is because dividends are taxable in the hands of investors according to their income tax slab rate. Also, dividends above INR 5,000 are subject to TDS of 10%. In SWP plans, investors are liable to pay tax only for gains above INR 1 lakh.
Systematic Withdrawal Plan is a tax-efficient method of earning regular fixed income. Hence, investors can optimize their tax on long term capital gains with SWP, provided their gains remain below INR 1 lakh.