Systematic Withdrawal Plan (SWP) is a service offered by mutual funds which provides investors with a specific amount of payout at a pre-determined time intervals, which can be monthly, quarterly, half-yearly or annually. An investor can customize the cash flows as desired; he can either withdraw a fixed amount or just the capital gains on his investments. SWP provides the investor with a regular income and returns on the money that is still invested in the scheme.
There are two types of SWP: Fixed Withdrawal and Appreciation Withdrawal. In a fixed withdrawal option, the investor specifies the amount he wants to withdraw from his investment on a monthly/quarterly basis. And in an appreciation withdrawal option, the investor withdraws only the appreciated amount on a monthly/quarterly basis.
