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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
Here’s a closer look at what an SWP is and the advantages it offers:
How a Systematic Withdrawal Plan Works
An SWP allows you to customise the withdrawal process:
1. Fixed Withdrawals: You specify a fixed amount to be withdrawn at regular intervals.
2. Appreciation-Linked Withdrawals: Only the returns or appreciation on your investment are withdrawn, keeping the principal intact.
When you opt for an SWP, the required amount is redeemed from your mutual fund holdings, and the balance continues to earn returns based on the fund’s performance. You can stop or modify the SWP at any time, offering flexibility and control over your investment.
Benefits of a Systematic Withdrawal Plan
1. Regular Income Stream
SWPs provide a steady flow of income, making them an ideal choice for retirees who need to meet day-to-day expenses or individuals looking for periodic cash flow to manage financial goals.
2. Tax Efficiency
Compared to traditional fixed-income options, SWPs can be more tax-efficient. In equity mutual funds, withdrawals are subject to capital gains tax, which can be lower than income tax rates on traditional plans. Additionally, only the capital gain from the withdrawn amount is taxed, not the entire investment.
3. Mitigates Market Volatility
With an SWP, only a portion of your investment is redeemed periodically, leaving the rest invested to benefit from potential market upswings. This approach reduces the risk of market timing while ensuring that you have liquidity when needed.
4. Financial Discipline
An SWP helps investors withdraw systematically, preventing impulsive redemption of investments. This disciplined approach ensures long-term wealth creation while meeting liquidity needs.
5. Flexibility
You can customise the withdrawal frequency and amount based on your financial needs. Unlike fixed annuity products, SWPs allow you to adjust or discontinue the plan without penalties.
6. Compounding Benefits
The remaining investment continues to earn returns, harnessing the power of compounding. Over time, this can significantly enhance the value of your portfolio.
Is an SWP Right for You?
An SWP is particularly suited for individuals seeking steady cashflow without eroding their wealth. It works best for those with a low-to-moderate risk appetite and a need for consistent cash flow, such as retirees or those funding education or lifestyle expenses.
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