SWP or systematic withdrawal plan is a process, wherein, the investor can withdraw a particular sum of money every week, month or every quarter (on a set date). The good news is you can start a SWP on Groww within minutes now. This article covers in detail how SWP can be beneficial for you as an investor, and how can you set it up easily on Groww. Read on!
What Is A Systematic Transfer Plan?
A systematic withdrawal plan allows you to methodically withdraw money ( redeemed units) from your investment corpus. Similar to SIP, in an SWP, the amount and the time interval of withdrawal is decided by the investor. The predetermined amount is then automatically debited to the chosen account of the investor. If the market is down, then more number of units will have to be sold to acquire the desired amount. If the market is doing well, then fewer units will have to be sold to attain the desired amount. Simply put, If SIP is about investment, SWP lets you redeem at your preferred speed.
How Can SWP Help You As An Investor?
If you do not want a lump sum withdrawal, then SWP might be a good option for you. As you may know, the market is highly unpredictable. SWP also helps to avoid exiting at the wrong time. For retirees, this will provide a steady income to meet their needs, without worrying about using up all of their money. For salaried individuals, this might be the extra push needed to make ends meet. Other benefits of SWP include:-
- Ease and comfort of automated transactions
- Ability to customize your cash flow to suit your needs and long term goals.
- Control on your investment and income at the same time.
- Stability of income.
- SWP withdrawals have long term tax benefits.
- Similar to a SIP, you can start and stop an SWP any time you wish to.
Let us see how you can start a SWP on Groww.
How To Start SWP On Groww
Step 1: Log on the Groww platform and click on “ Investments” on your dashboard.
Step 2: From the list of your funds, select the mutual fund you want to withdraw money from, the units of this fund will be redeemed and the money will be transferred to your linked bank account. After you zero in on the fund, click on the “3 dots” under the Action tab and select ” Start SWP”
Step 3. Based on the total amount available in the fund, select the monthly withdrawal amount. Based on this amount, you will be told how many times you can withdraw from your fund. You can then make changes in the monthly withdrawal amount. Select the monthly billing date and click on ” Confirm SWP”.
This will initiate your SWP. You can easily see and manage your active STPs and SWPs on your dashboard and take action accordingly.