Systematic Withdrawal Plan

The opposite of a Systematic Investment Plan (SIP) is the SWP. Under this, investors can withdraw a fixed amount at regular intervals from the mutual fund. This happens by redeeming the relevant number of units at the NAV on the date that the amount is withdrawn. This can be a good option for those who need money at regular intervals, as compared to the Income Distribution cum Capital Withdrawal (IDCW) plan of mutual funds. Under SWP, the amount is taxed as capital gains, while in IDCW it is taxed as other income at tax rates applicable to you.