Facing delays in SWP payouts? Expert explains what investors should do
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SWP payout delay
Are you facing delays in SWP payouts and looking for methods which ensure that the distributor is protecting your invested capital and delivers a minimum 5% appreciation after expenses? Here is what an expert says, as reported by ET Wealth.
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What is SWP?
A Systematic Withdrawal Plan is a facility where an investor withdraws a fixed amount from an existing mutual fund investment at a chosen frequency: monthly, quarterly, half-yearly, or annually.
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Basic advantage
Systematic Withdrawal Plan (SWP) does not provide guaranteed income. It provides a planned redemption stream.
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If SWP not credited
If the SWP amount is not credited on time, treat it as a delayed redemption payout, because every SWP installment is technically a redemption of mutual fund units, according to Ravi Kumar TV, Director, Gaining Ground Investment Services.
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Defined period by Sebi
The expert said that as per the regulator, the mutual fund framework requires redemption/repurchase proceeds to be dispatched or transferred within three working days from the acceptance of the redemption request, except where exceptional timelines are permitted.
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Interest payable
Delayed payouts can attract interest payable to the investor. Mutual funds provide market-linked returns that cannot be guaranteed by the distributor, AMC, or adviser.