How to use SWP to withdraw investments on a regular basis

Just as we invest through systematic investment plans of mutual funds, we can also seek regular payoffs by signing up for a systematic withdrawal plan ( SWP).

An SWP allows withdrawal of a specified amount/appreciation at regular intervals. This ensures the investor a regular fixed income. There are two variants—fixed withdrawal, where a specified amount is redeemed regularly, and appreciation withdrawal, where accrued appreciation on investment is redeemed on the SWP date.

Form
The investor first needs to check if a scheme allows SWP. A systematic withdrawal form needs to be filled up to avail this facility. This form can be downloaded from the fund website. SWP can also be registered online by investors who are using online portals for mutual fund transactions.

Details
Next, the investor has to decide on the SWP date and frequency. Fund houses typically give a pre-set choice of dates. Frequency of SWP must be included in the application form. Frequency could be monthly or quarterly. Details such as folio number, scheme name (for which SWP is proposed to be registered) and bank details should also be mentioned in the form.

Submission
If the investor wants the proceeds credited to a different bank account, other than the registered bank account, a copy of a cancelled cheque should be attached and details of the account included in the form. The form has to be signed by all holders. The filled up form with documents (if any) can be submitted to the investor’s agent or investor service centre of the fund house.

Time taken
Once the documents are submitted it takes about 30 days to process the request.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)