We all dream of having a steady, reliable income, especially after years of hard work. Whether you're planning for retirement or just want extra money coming in regularly, it’s not always easy to figure out how to make your savings last. The fear of running out of money can be stressful. That’s where the best SWP mutual fund in India can help—offering a smart way to get regular payouts from your investments while letting the rest of your money continue to grow.
In this blog, we’ll walk you through Systematic Withdrawal Plans (SWPs) and how they work and share a list of India’s best SWP mutual funds for 2024. These funds are designed to give you a steady income while keeping your investments safe. So, if you're looking for a simple solution to manage your money, keep reading!
SWP stands for Systematic Withdrawal Plan, which lets you withdraw a fixed amount of money from your mutual fund investment at regular intervals—monthly, quarterly, or annually. It's designed for those who want a steady income from their investments without having to sell everything at once. It is especially useful for retirees or investors seeking passive income while keeping their capital invested for growth.
In simple terms, the SWP meaning in mutual funds is about getting a regular income from your investments while letting the remaining amount continue to earn returns. This plan differs from a lump sum withdrawal, where you take out a large portion all at once, and from SIP (Systematic Investment Plan), where you invest small amounts regularly. With SWP, you’re withdrawing systematically, giving you the benefit of regular payouts and long-term growth.
After you invest a lump sum in a mutual fund, you can set up a systematic withdrawal plan to withdraw a specific amount at regular intervals—this can be monthly, quarterly, or even annually, depending on your financial needs. Each time you withdraw, the mutual fund sells a portion of your units to generate the payout. The remaining investment continues to grow or earn returns.
For example, let’s say you invest ₹50 lakh in one of India’s best SWP mutual funds with an average annual return of 15%. If you set a plan to withdraw ₹50,000 every month, you’ll receive a total of ₹90,00,000 over a period of 15 years. Despite these regular withdrawals, thanks to the power of compounding and market growth, your remaining investment would still be worth approximately ₹1,02,23,882 at the end of 15 years. This balance between regular income and long-term investment growth makes SWP an attractive option for investors looking to manage their finances smartly.
When choosing the Top SWP mutual fund in India, it’s important to consider funds with a history of delivering consistent returns over time. Below, we’ve compiled a list of top-performing mutual funds that are ideal for setting up a withdrawal plan based on their fund type and 3-year returns.
| Top 10 SWP Mutual Funds in India 2024 | Fund Type | 3-Year Returns (%) |
|---|---|---|
| Bank of India Flexi Cap Fund | Flexi Cap | 107.7 |
| ICICI Pru Bluechip Dir Gr | Bluechip Equity | 77.7 |
| Parag Parikh Flexi Cap Fund | Flexi Cap | 70.3 |
| Canara Robeco Bluechip Equity Fund | Bluechip Equity | 57.9 |
| HDFC Hybrid Equity Fund | Hybrid Equity | 54.4 |
| UTI NIFTY 50 Index Mutual Fund | Index Fund | 51.6 |
| Mirae Asset Large Cap Fund Direct-Growth | Large Cap | 50.4 |
| SBI Equity Hybrid Fund | Hybrid Equity | 45.1 |
| PGIM India Hybrid Equity Fund | Hybrid Equity | 38.8 |
| UTI Flexi Cap Fund Direct | Flexi Cap | 29.1 |
In this section, we’ll walk you through the 10 Best SWP mutual funds in India that investors can consider for a reliable source of income. We'll give detailed information for each fund, such as expense ratios, market caps, NAV, and returns.
The Bank of India Flexi Cap Fund is an all-weather option that focuses on investing in a variety of companies across market segments (large-cap, mid-cap, and small-cap). Its flexible investment strategy helps it capitalise on opportunities in different market conditions.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 67.5 | 107.7 | - |
The ICICI Prudential Bluechip Fund is a large-cap-focused fund with a strong track record of delivering stable returns. It invests primarily in blue-chip companies known for their financial strength and consistent performance. This makes it a low-risk option for SWP investors, especially those who prioritise stability and steady income over aggressive growth.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 43.5 | 77.7 | 180.7 |
The Parag Parikh Flexi Cap Fund has a reputation for its diversified approach to investing across market caps. Known for its long-term wealth creation, the fund allocates its investments strategically between Indian equities and overseas securities, providing a good balance of risk and reward.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 40.1 | 70.3 | 237.3 |
The Canara Robeco Bluechip Equity Fund focuses on investing in high-quality large-cap companies. Its portfolio is designed to offer stability with moderate growth, making it a popular choice for conservative investors. The fund’s well-diversified portfolio and risk-averse strategy make it a reliable option for SWP investors who prioritise consistent payouts without high volatility.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 38.7 | 57.9 | 177.8 |
The HDFC Hybrid Equity Fund offers a balanced portfolio with a mix of equities and debt instruments. This combination provides a great balance between growth and income, making it ideal for investors who want a steady source of cash flow from their SWP while also benefiting from equity market growth.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 24.9 | 54.4 | 131.1 |
UTI NIFTY 50 Index Fund is a passive investment option that tracks the performance of the Nifty 50 index. This fund is ideal for investors seeking a low-cost, low-maintenance option for their SWP. It mirrors the performance of the top 50 companies in India, making it a solid choice for those who want exposure to blue-chip stocks.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 32.3 | 51.6 | 139.2 |
Mirae Asset Large Cap Fund is known for its focus on large-cap stocks that have a proven history of delivering robust returns. The fund has performed consistently well, even during volatile market conditions, making it a great choice for SWP investors looking for stable, long-term growth.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 31.5 | 50.4 | 141.1 |
One of India's most popular hybrid funds, the SBI Equity Hybrid Fund, invests in a mix of equity and debt instruments. This balanced approach provides a blend of growth potential and income stability. For systematic withdrawal plan investors, this fund offers the advantage of regular payouts while minimising the risk associated with market volatility.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 28.1 | 45.1 | 119 |
The PGIM India Hybrid Equity Fund is another hybrid option, similar to the HDFC fund, blending equity and debt investments. The fund has a strong track record of maintaining a balance between income generation and capital appreciation. It’s an excellent choice for SWP investors who want a diversified portfolio with a lower-risk profile.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 25.6 | 38.8 | 108.7 |
UTI Flexi Cap Fund allows for flexibility by investing across different market caps, similar to the Parag Parikh Fund. The fund takes advantage of market opportunities across sectors and companies, balancing risk and return efficiently. It's a solid choice for SWP investors who are looking for a diversified portfolio that can adapt to different market conditions.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 28.2 | 29.1 | 149 |
When choosing an SWP, understanding the top and best-performing SWP mutual funds in the last 10 years can give investors valuable insight into long-term reliability and returns. These funds have consistently demonstrated strong performance, making them ideal choices for investors
| Best Performing SWP Mutual Funds | Fund Type | 10-Year Returns (%) |
|---|---|---|
| Parag Parikh Flexi Cap Fund | Flexi Cap | 443.14% |
| ICICI Pru Bluechip Dir Gr | Bluechip Equity | 337.53% |
| SBI Equity Hybrid Fund | Hybrid Fund | 240.60% |
| UTI NIFTY 50 Index Mutual Fund | Index Fund | 238.22% |
| Canara Robeco Bluechip Equity Fund | Bluechip Equity | 162.57% |
Investing in SWP mutual funds offers several key advantages:
This combination of consistent income, flexibility, and potential growth makes SWP mutual funds a great choice for anyone looking to balance income needs with long-term wealth building.
While SWP mutual funds are a great way to ensure regular income, it's essential to understand the associated risks. Here are some key risks to be aware of:
Investors can mitigate potential downsides by understanding these risks and choosing the best SWP mutual fund with consistent long-term performance.
Before diving into a SWP mutual fund, it's important to consider several factors to ensure your investment aligns with your financial goals and risk tolerance. Here are a few key points to keep in mind:
Systematic withdrawal plan mutual funds are well-suited for a variety of investors, particularly those looking for regular income. Here’s a look at who might benefit most from investing in a SWP:
In short, systematic withdrawal plan mutual funds are perfect for anyone looking to manage regular withdrawals from their investments while still focusing on long-term capital appreciation.
Eager to get started? Investing in the top SWP mutual funds is straightforward. Here’s how:
Selecting the best SWP mutual fund requires careful consideration of several factors to ensure you get a steady income without compromising growth. Here are the key criteria to keep in mind:
Investing in SWP mutual funds can be a smart way to generate a steady income stream while allowing your investments to continue growing. Whether you’re a retiree looking for regular payouts or an investor planning for long-term financial goals, choosing the best SWP mutual fund is key to ensuring stable returns. Considering factors like market conditions, tax implications, and capital preservation is important before diving into a systematic withdrawal plan. By selecting top-performing SWP mutual funds with a proven track record and aligning them with your financial objectives, you can enjoy both regular withdrawals and long-term growth.
SWP stands for Systematic Withdrawal Plan, which allows investors to withdraw a fixed amount from their mutual fund investments at regular intervals, providing a steady income while the rest of the investment continues to grow.
The best SWP mutual funds include HDFC Hybrid Equity Fund, ICICI Prudential Bluechip Fund, and SBI Equity Hybrid Fund. However, it depends on your financial goals and risk appetite.
Withdrawals from SWP mutual funds are treated as capital gains. Short-term gains (under 12 months) are taxed at 20%, while long-term gains (over 12 months) are taxed at 12.5%. Debt funds have different tax rules, so consulting with a tax advisor is important.
While you can start an SWP immediately, letting your investment grow for a few years is often recommended before beginning withdrawals. This allows your capital to appreciate, making the plan more tax-efficient and potentially preserving your principal longer.
Yes, SWP is an excellent option for retirees seeking a steady income stream. Retirees can ensure regular payouts by choosing top-performing SWP mutual funds while still growing their investments over time.
Capital erosion can occur if your withdrawal amount is higher than the fund's growth rate. Over time, this can reduce your investment's value, especially if market performance is poor. Choosing funds with strong long-term performance and managing withdrawal rates carefully can help mitigate this risk.
Disclaimer: This article is for educational purposes only and should not be considered financial advice. Always conduct your research and consider consulting with a financial advisor before making any investment decisions.
