Many investors want a regular income from their mutual fund investments, similar to receiving a salary or pension. Mutual funds are very flexible. They allow for such an arrangement too.

Individuals looking for a regular income from their investments often go for dividend plans of mutual funds.

Read more: What is SWP?

But there is even a better way to go about this with a Systematic Withdrawal Plan (SWP).

Here is the list of 15 funds best for SWP you can invest in 2018.

Best Funds to invest through SWP

In SWP, a fixed amount can be withdrawn at fixed intervals.

Moreover, the frequency and amount of the withdrawal can also be selected by the investor.

Here are the 15 best funds you can pick to start an SWP.

1. Indiabulls Liquid Fund

This is a liquid fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.29% since its launch.

Returns per annum over the years from this fund are:

Indiabulls Liquid Fund
Fund Name 1Y 3Y 5Y Category Risk
Indiabulls Liquid Fund - Direct - Growth 7.3% 7.42% 8.04% Debt
(Liquid)
Low

Invest in Indiabulls Liquid Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹4,541 Cr
Minimum SIP ₹1,000
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.07%
Exit Load NIL
Type  Open-ended

This liquid fund can be easily converted in to cash that too within a working day or two.

Liquid funds invest in highly liquid money market securities like Commercial Paper (CPs), Treasury Bills and Certificate of Deposit (CDs).

They invest in instruments with a maturity period of up to 91 days.

Among all debt funds, liquid funds provide the most stable returns.

2. HDFC Short Term Debt Fund

This is a short-term debt fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.68% since its launch.

Returns per annum over the years from this fund are :

HDFC Short Term Debt Fund
Fund Name 1Y 3Y 5Y Category Risk
HDFC Short Term Debt Fund - Direct - Growth 5.97% 7.52% 8.56% Debt
(Short Duration)
Moderately Low

Invest in HDFC Short Term Opportunities Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹9,490 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.25%
Exit Load NIL
Type  Open-ended

If you want to invest for a shorter duration, say for 3 months or more, this is one of the best debt funds for you to invest in.

Short term funds invest in papers like Commercial Paper (CPs) and Certificate of Deposit (CDs).

The fund mostly relies on short-term corporate debt for returns, with sovereign exposures at 10-12% in the past one year.

But it maintains a very conservative portfolio, both on credit quality and duration. The fund’s asset size at ₹9,490 crore makes it one of the biggest in the category.

3. Franklin India Ultra-Short Bond Fund

This is an ultra short bond fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 9.53% since its launch.

Returns per annum over the years from this fund are :

Franklin India Ultra-Short Bond Fund
Fund Name 1Y 3Y 5Y Category Risk
Franklin India Ultra Short Bond Fund - Direct - Growth 7.99% 8.83% 9.32% Debt
(Ultra Short Duration)
Moderate

Invest in Franklin India Ultra Short Bond Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹6,979 Cr
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.35%
Exit Load NIL
Type  Open-ended

This fund invests in short-term debt securities with some small portion in long-term securities. The returns in this category are similar to the returns offered by short-term funds.

4. Aditya Birla Sun Life Corporate Bond Fund

This is a short term debt fund launched on January 1, 2013. It is a debt fund with low risk and has given a return of 8.88% since its launch.

Returns per annum over the years from this fund are :

Aditya Birla Sun Life Corporate Bond Fund
Fund Name 1Y 3Y 5Y Category Risk
Aditya Birla Sun Life Corporate Bond Fund - Direct - Growth 5.68% 7.78% 8.77% Debt
(Corporate Bond)
Moderately Low

Invest in Aditya Birla Sun Life Short Term Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹19,445 Cr
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.26%
Exit Load NIL
Type  Open-ended

This scheme aims to generate current income and capital appreciation from a portfolio that invests 100% in debt and money market securities.

Know the difference between STP, SIP and SWP here!

With an asset size topping ₹ 19,445 crores, the fund is the most popular fund in the category.

The fund usually relies more on corporate debt than sovereign debt.

5. Principal Cash Management Fund

This is a liquid fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.24% since its launch.

Returns per annum over the years from this fund are:

Principal Cash Management Fund
Fund Name 1Y 3Y 5Y Category Risk
Principal Cash Management Fund - Direct - Growth -1.77% 4.23% 6.08% Debt
(Liquid)
Low

Invest in Principal Cash Mgmt Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹1,271 Cr
Minimum SIP Not Supported
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.15%
Exit Load NIL
Type  Open-ended

6. Indiabulls Short Term Fund

This is a short term debt fund launched on September 13, 2013. It is a debt fund with low risk and has given a return of 9.50% since its launch.

Returns per annum over the years from this fund are :

Indiabulls Short Term Fund
Fund Name 1Y 3Y 5Y Category Risk
Indiabulls Short Term Fund - Direct - Growth 7.09% 8.25% 9.16% Debt
(Short Duration)
Low

Invest in Indiabulls Short Term Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹527 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 4 years old
Expense Ratio 0.5%
Exit Load NIL
Type  Open-ended

7. DHFL Pramerica Short Maturity Fund 

This is a short term debt fund launched on January 1, 2013.

It is a debt fund with low risk and has given a return of 9.46% since its launch.

Returns per annum over the years from this fund are:

DHFL Pramerica Short Maturity Fund
Fund Name 1Y 3Y 5Y Category Risk
DHFL Pramerica Short Maturity Fund - Direct - Growth 5.38% NA NA Debt
(Short Duration)
Moderate

Invest in DHFL Pramerica Short Maturity Fund Now 

Rating by Groww 4 star
AUM (Fund Size) ₹1,696 Cr
Minimum SIP ₹500
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.43%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to generate a steady return with low to medium market risk by investing in a portfolio of short-medium term debt and money market securities.

There will be 65-100% allocation to instruments with an average maturity up to 18 months and up to 35% allocation to instruments with an average maturity greater than 18 months.

8. Essel Liquid Fund

This is a liquid fund launched on January 1, 2013.

Returns per annum over the years from this fund are:

Essel Liquid Fund
Fund Name 1Y 3Y 5Y Category Risk
Essel Liquid Fund - Direct - Growth 7.39% 7.44% 8.05% Debt
(Liquid)
Low

Invest in Essel Liquid Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹417 Cr
Minimum SIP Not Supported
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.07%
Exit Load NIL
Type  Open-ended

This fund invests in instruments with a maturity period of up to 91 days.

9. Indiabulls Ultra Short Term

This is an ultra short bond fund launched on January 1, 2013.

It is a debt fund with very low risk and has given a return of 8.96% since its launch.

Returns per annum over the years from this fund are:

Indiabulls Ultra Short Term
Fund Name 1Y 3Y 5Y Category Risk
Indiabulls Ultra Short Term Fund - Direct - Growth 7.1% 8.08% 8.74% Debt
(Ultra Short Duration)
Moderately Low

Invest in Indiabulls Ultra Short Term Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹2,501 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.3%
Exit Load NIL
Type  Open-ended

This fund invests in short-term debt securities with some small portion of long-term securities.

The returns in this category are similar to the returns offered by short-term funds.

10. Aditya Birla Sun Life Floating Rate Fund

This is an ultra short bond fund launched on January 1, 2013.

It is a debt fund with very low risk and has given a return of 9.01% since its launch.

Returns per annum over the years from this fund are :

Aditya Birla Sun Life Floating Rate Fund
Fund Name 1Y 3Y 5Y Category Risk
Aditya Birla Sun Life Floating Rate Fund - Direct - Growth 6.94% 8.09% 8.71% Debt
(Floater)
Moderately Low

Invest in Aditya Birla Sun Life Floating Rate Fund – LTP Now

Rating by Groww 4 star
AUM (Fund Size) ₹7513 Cr
Minimum SIP ₹1000
Minimum SWP ₹1000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.17%
Exit Load NIL
Type  Open-ended

This fund invests in short-term debt securities with some small portion of long-term securities.

The returns in this category are similar to the returns offered by short-term funds.

The objective of this scheme is to generate regular income through investment in a portfolio comprising substantially of floating rate debt/money market instruments, it may also invest a portion of its net assets in fixed rate debt securities and money market instruments.

11. HSBC Cash Fund

This is a liquid fund launched on January 1, 2013.

Returns per annum over the years from this fund are:

HSBC Cash Fund
Fund Name 1Y 3Y 5Y Category Risk
HSBC Cash Fund - Direct - Growth 7.38% 7.29% 7.91% Debt
(Liquid)
Low

Invest in HSBC Cash Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹3364 Cr
Minimum SIP ₹1000
Minimum SWP ₹1000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.08%
Exit Load NIL
Type  Open-ended

12.HDFC Corporate Bond Fund

This is an income debt mutual fund launched on January 1, 2013.

It is a debt fund with low risk and has given a return of 8.70% since its launch.

Returns per annum over the years from this fund are :

HDFC Corporate Bond Fund
Fund Name 1Y 3Y 5Y Category Risk
HDFC Corporate Bond Fund - Direct - Growth 4.86% 7.67% 8.71% Debt
(Corporate Bond)
Moderately Low

Invest in HDFC Medium Term Opportunities Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹13,129 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Composite Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.28%
Exit Load NIL
Type  Open-ended

In income funds, investors invest their money in debt instruments like corporate debentures and government securities.

Income funds are for investors with a high-risk appetite It works well for long-term investments since there is a high risk of change in interest rates.

The scheme seeks to generate regular income through investments in debt/money market instruments and government securities with maturities not exceeding 60 months.

13.UTI Banking & Financial Services

This is a short term debt fund launched on February 3, 2014. It is a debt fund with low risk and has given a return of 8.85% since its launch.

Returns per annum over the years from this fund are:

UTI Banking & Financial Services
Fund Name 1Y 3Y 5Y Category Risk
UTI Banking & Financial Services Fund - Direct - Growth 5.42% 8.19% NA Equity
(Sectoral/Thematic)
Moderate

Invest in UTI Banking & PSU Debt Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹1213 Cr
Minimum SIP ₹500
Minimum SWP ₹1000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 4 years old
Expense Ratio 0.22%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of predominantly debt & money market securities by Banks and Public Sector Undertakings (PSUs).

14. SBI Short Term Debt Fund

This is a short term debt fund launched on January 1, 2013.

It is a debt fund with low risk and has given a return of 8.63% since its launch.

Returns per annum over the years from this fund are:

SBI Short Term Debt Fund
Fund Name 1Y 3Y 5Y Category Risk
SBI Short Term Debt Fund - Direct - Growth 5.25% 7.57% 8.53% Debt
(Short Duration)
Moderately Low

Invest in SBI Short Term Debt Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹8410 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.35%
Exit Load NIL
Type  Open-ended

15. Kotak Banking and PSU Debt Fund

This is a short term debt fund launched on February 3, 2014.

It is a debt fund with low risk and has given a return of 8.83% since its launch.

Returns per annum over the years from this fund are:

Kotak Banking and PSU Debt Fund
Fund Name 1Y 3Y 5Y Category Risk
Kotak Banking & PSU Debt Fund - Direct - Growth 5.49% 7.74% 8.4% Debt
(Banking & PSU)
Moderately Low

Invest in Kotak Banking and PSU Debt Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹1292 Cr
Minimum SIP ₹1000
Minimum SWP ₹1000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.15%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to generate risk-free returns through investments in sovereign securities.

The savings plan (D) will provide regular dividend payouts.

A portion of the fund will be invested in interbank money market in order to meet the liquidity requirement.

Things to Remember

The rate of return is considered above all past data. No one can predict the actual rate of return you will get on your investment.

You can only assume and predict the fund’s capability based on its past performance.

But don’t just run for returns from investment for investing in mutual funds. There are a lot of factors you should look into before selecting a fund which will match your investment goals.

Following the 3 things you should always remember before investing in Mutual Funds :

1.Don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.

2.Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.

3.Review your investment from time to time but not too often. Once a few weeks is good enough.

Read More: 10 Tips on Investing in Mutual Funds

To ensure that the fund is in good hands, choose a fund house having a fund manager with a good amount of experience managing small/mid cap funds and associated with these funds for a good number of years.

Lastly, here is a step-by-step procedure on how to set up an SWP, on Groww

Happy Investing!

Disclaimer: the views expressed here are of the author an do not reflect those of Groww.