Systematic Withdrawal Plan (SWP) is an investment strategy that allows individuals to withdraw a fixed amount of money at regular intervals from their investment portfolio. Here’s a detailed overview:

Key Features:

1. Regular income stream: SWP provides a steady flow of income.
2. Flexible withdrawal: Choose withdrawal frequency (monthly, quarterly, annually).
3. Tax efficiency: Only withdrawn amounts are taxed under capital gain tax.
4. Reduced volatility: Regular withdrawals help ride out market fluctuations.

Benefits:

1. Predictable income
2. Lowers market timing risk
3. Encourages disciplined investing
4. Supports retirement planning

Tax Implications:

1. Withdrawals taxed as income
2. Capital gains tax on redeemed units

Suitable For:

1. Retirees seeking regular inflation adjusted income
2. Investors seeking predictable returns
3. Those requiring steady cash flow & inflation adjusted return

SWP is the best option for regular monthly income. A monthly income plan is a mutual fund strategy that seeks to generate stable income through dividend and interest cash flows. A MIP often invests in lower-risk securities, including fixed-income instruments, preferred shares, and dividend stocks. MIP is a type of mutual fund strategy that invests primarily in debt, equity and government securities with a mandate producing cash flow and preserving capital. Therefore, it is typically attractive to a retired person or senior citizen who doesn’t have another substantial source of monthly income.

Key Features:

1. Regular income stream: MIPs provide monthly or quarterly income.
2. Diversified portfolio: Mix of debt (bonds, debentures) and equity (stocks) instruments.
3. Low to moderate risk: Suitable for conservative investors.
4. Liquidity: Open-ended schemes allow easy withdrawal.

Benefits:

1. Regular income stream
2. Low to medium risk
3. Liquidity
4. Tax efficiency
5. Professional management

Consult with us to determine if MIP suits your investment goals and risk tolerance.