A Systematic Withdrawal Plan (SWP) is a facility that allows an investor to withdraw money from an existing mutual fund at predetermined intervals. The money withdrawn through a systematic withdrawal plan can be reinvested in another fund or retained by the investor in cash.
When is a SWP generally used?
Systematic withdrawal plans are used by investors to create a regular flow of income from their investments. Investors looking for income at periodical intervals for e.g. funding a travel plan during the childrens’ summer vacations, also set up their withdrawals in such a way that the cash is available when most required.
What makes SWP a wise strategy?
- Withdrawals (also referred to as “redemption”) attract no Tax Deducted at Source
Please note that Capital Gains Tax will chargeable on the withdrawn amount.
- SWP can be set up to withdraw only the appreciation made on a particular investment. In this way your capital stays invested while you continue to enjoy the gains periodically.
SWP is available in two options:
Fixed Withdrawal: Where you specify amounts you wish to withdraw from your investment on a monthly/quarterly basis. |
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Appreciation Withdrawal: Where you can withdraw your appreciated amount on a monthly/quarterly basis. |
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Post-dated warrants sent to investors are dated 1st of every month. |
Investment Plan
| Details |
SWP - Fixed Withdrawal |
SWP - Appreciation Withdrawal |
|---|
| Available Schemes |
Birla Sun Life Dynamic Bond Fund, Birla Sun Life Gilt Plus, Birla Sun Life Income Plus, Birla Sun life Monthly Income Plan II series 5,Birla Sun Life Government Securities Fund, Birla Sun Life Income Fund. |
Birla Sun Life Dynamic Bond Fund, Birla Sun Life Gilt Plus, Birla Sun Life Income Plus, Birla Sun life Monthly Income Plan II series 5,Birla Sun Life Government Securities Fund, Birla Sun Life Income Fund. |
| Objective |
Allow investors of growth plan to withdraw fixed amount at regular interval. |
Allow investors of growth plan to withdraw 90% of the appreciation amount at regular interval. |
| Withdrawal option |
Fixed Amount |
Appreciation Amount |
| Withdrawal amount |
Min Rs. 500 & in multiples Rs. 1 |
90% of Appreciation Amount in that month/ quarter, subject to a minimum payout of Rs. 500. If the so derived withdrawal amount is < Rs. 500, no SWP for that month, to be added to next month's/Quarter's SWP amount. |
| Frequency of withdrawal allowed |
Quarterly/Monthly |
Quarterly/Monthly |
| No. of withdrawal (minimum) |
Quarterly-4/Monthly-6 |
Quarterly-4/Monthly-6 |
| Submission of request by Direct credit of SWP |
25th of month Available |
25th of month Available |
| Mode of payment |
Warrants issued at requested frequency. |
Warrants issued at requested frequency. |
| Termination of request |
5 Days Advance request |
5 Days Advance request |