HOW TO OPTIMIZE MUTUAL FUND RETURNS WITH REGULAR WITHDRAWALSÂ
Published By MintGenie Team | 21 Mar, 2024
A systematic withdrawal plan offered by mutual funds allows investors to withdraw funds at regular intervals, functioning as the inverse of a systematic investment plan.
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Here are some benefits of utilizing a SWP to access your mutual fund investments:
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Regular Income
SWP offers a convenient method to generate a steady income stream from investments, benefiting retirees and those seeking additional income.
Flexibility
Investors have control over withdrawal amounts and intervals, allowing customization based on income needs.
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Capital Appreciation Potential
Strategic SWP withdrawals may enable remaining investments to grow over time, maintaining value against inflation.
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Tax Benefits
In India, residents enjoy no TDS on SWP withdrawals, with favourable tax treatment for capital gains from equity and debt funds.
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Disciplined Management
SWP promotes disciplined handling of withdrawals, preventing impulsive decisions and capital depletion.
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Mitigation of Market Volatility
Regular fixed withdrawals help offset market volatility by redeeming units at various NAVs, balancing withdrawals during market fluctuations.