Mutual Funds Systematic Withdrawal Plan (SWP) Request Form

What is Systematic Withdrawal Plan (SWP)?

A Systematic Withdrawal Plan (SWP) is a facility that allows an investor to withdraw money from an existing mutual fund at predetermined intervals. It allows investors a certain level of independence from market instability and helps in avoiding market timing. The investor can reinvest the redeemed cash in another portfolio or use it as a source of regular income. Often, a systematic withdrawal plan is used to fund expenses during retirement.

Systematic withdrawal plans are used by investors to create a regular flow of income from their investments. Investors looking for income at periodical intervals for e.g. funding a travel plan during the children’s’ summer vacations, also set up their withdrawals in such a way that the cash is available when most required. Systematic withdrawal plans is of advantage to investors who require liquidity as it allows account holders to access their money exactly when they need it. When you want to sell mutual fund you usually have two options either sell all at once or opt for a systematic withdrawal plan. Systematic withdrawal plan, allows you to withdraw a fixed sum of money every month or quarter depending on the option chosen and instructions given by you.

1] Regular Income

2] Tax Benefit Instead of selling all the units at once, spanning the income across multiple intervals can lower the total tax. It is a tax efficient way of receiving regular income.

3] Avoid market fluctuations – It saves an investor from market fluctuations, as regular withdrawal averages out return value.

 How does an SWP work?

An SWP allows you to withdraw a fixed sum of money every month or quarter depending on the option chosen and instructions given by you.

Let’s say A has 10,000 units in a mutual fund scheme on 1-Dec-13. He intends to withdraw 6,000 every month through SWP.

Date Opening Balance (Units) NAV Units Redeemed Closing Balance
1-Dec-13 10000 20 300 (6000/20) 9700
1-Jan-14 9700 18 333.33 (6000/18) 9366.67
1-Feb-14 9366.67 22 272.73 (6000/22) 9093.94

In this manner, units from mutual fund holdings will be redeemed in a systematic way to provide the investor with regular income.

Under SWP, withdrawals can be

1] Fixed Withdrawal: Under this you specify amount you wish to withdraw from your investment on a monthly / quarterly basis.
2] Appreciation Withdrawal: Under this you can withdraw your appreciated amount on a monthly/quarterly basis

The process is very simple to do SWP in Mutual Fund Schemes. Steps to follow while filling SWP Transaction Application Form:

 1. Download Mutual Fund SWP Form and print it on A4 Page.

2. Fill up following details:

A] Applicants Name, B] Mutual Fund Company Name, C] Folio No D] Investor Name, E] From Scheme /Plan /Option, F] Amount / Units to SWP, G] Pan No, H] Signature.

3. Now submit this SWP Form to Advisor / Distributor / Broker or Mutual Fund House or Registrar of Mutual Fund.

4. To track the status of your SWP Application form, keep copy of SWP Form and the Acknowledgement Slip.

Click below to download Mutual Fund SWP Request Transaction Form

Axis Mutual Fund Systematic Withdrawal Plan (SWP) Form

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2 comments

  1. Soumen Banerjee

    Good day,
    Can you please suggest me which are best mutual funds for SWP schemes and how can I open mutual fund with SWP option?? How I can open SWP mutual fund??
    Thanks in advance

    Regards
    Soumen Banerjee

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