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SWP Calculator
Calculate the value of the maturity corpus of your SWP mutual fund through our SWP calculator.
What is SWP in Mutual Funds?
SWP or Systematic Withdrawl Plan is a method of investing in Mutual Funds like a SIP. In the case of an SIP, you invest a fixed amount of money every month. Whereas, in an SWP plan, you invest a lumpsum of funds once and then withdraw a fixed amount at pre-determined intervals. The calculation of returns is done on the amount left after each withdrawal. Everybody likes to have a secondary source of passive income for which investment options like fixed deposits and postal deposits are available. However, these investment options make investor worry about their future income needs.
An SWP is a perfect option for investors who want a regular source of income and want to earn higher returns on the amount left after each withdrawal. It is a very flexible investment option as it allows investors to choose the amount of the withdrawals, frequency of the withdrawals and the investment tenure depending upon their choice. If the rate of withdrawals is less than the returns on the investment, then the investor enjoys some capital appreciation as well.
What is a SWP Calculator?
SWP calculator is a mathematical utility tool used to calculate the amount of withdrawals and the final value of the investment in a SWP mutual fund. The calculations for SWP are complex, even for professionals. So, for someone not very comfortable with mathematical equations and formulas it is a very tedious task to calculate the returns using a traditional manual calculator. However, this doesn't mean that the person cannot know the value of their investments. Using Pocketful’s SWP calculator you can know the required figures you want within a few clicks. Pocketful’s SWP calculator offers a very user-friendly interface to its users, that even a 5-year-old can use. Online calculators are removing the complexities that investors had to face earlier.
How Does a SWP calculator work
The working and computation of the SWP mutual fund are complex. The working of the calculator is based on the compound interest formula. The difference in the case of SWP is that the principal value on which interest is computed keeps decreasing with each withdrawal made
Let’s understand the workings of the Calculator based on this simple example.
Mr. Sam wants to invest Rs.10,00,000 in a SWP mutual fund for 10 years at an average interest rate of 8% p.a. He decides to withdraw Rs. 10,000 monthly
So, in 10 years, Mr Sam will make withdrawals worth Rs.12,00,000 & not only this after 10 years, he would still be left with Rs.3,52,000 as the balance amount. This balance amount, he can withdraw at the time when his investment tenure period will end.
The formula for the SWP calculator is given below:
A= [P+(P*R*T)]-W
| A | Final investment value |
| P | Principal investment amount |
| R | Rate of return |
| T | Investment tenure |
| W | Total withdrawals |
How to use Pocketful’s SWP calculator
Pocketful’s SWP calculator is easy to use & you don't even need any assistance. But still, we have mentioned the steps below on how to use the SWP return calculator.
Step 1:
Enter the lumpsum amount of investment that you want to invest in an SWP mutual fund.
Step 2:
Enter the amount you wish to withdraw every month. You can use the given slider or just type the amount.
Step 3:
Now input the average interest rate offered by the mutual fund you had invested in and the investment tenure.
Voila! The results will appear on your screen, the total amount of the withdrawals and the final value of your investment
Advantages of using a SWP calculator?
Using an SWP calculator has various advantages, some of which, are given below.
Estimated returns:
The SWP calculator helps you to know the estimated returns of your investment at the time of maturity. Remember that the amount calculated by the calculator may vary with the amount that you may receive depending upon the additional charges levied.
Easy Comparison:
Using an SWP plan calculator helps to compare different investment options with each other. So you can invest in the best-suited option according to your risk appetite.
Track your growth:
You can keep track of your investment using the yearly SWP calculator. You can see how your investment is growing.
Easy to use:
Online calculators are easy to use. As they offer a very user-friendly interface. That makes it very interactive to us
Cost-effective:
All the online investment calculators are free. That makes them very cost-effective. Otherwise, earlier, these calculations were done by financial advisors who charged hefty consulting fees.
Difference between SWP & SIP
| Bases | SIP | SWP |
|---|---|---|
| What | Monthly investment of a fixed amount in a Mutual Fund scheme. | Lumpsum investment of a corpus amount in a Mutual Fund scheme |
| When | Ideal when you do not have a lumpsum amount or for every type of financial goal. | Ideal for retirement planning or financial goals like buying a luxury. |
| How | Money is debited from your account monthly. | MF units are redeemed, before the dispersal of funds. |
| Why | Helps, in doing disciplined and regular investing | Creates a secondary source of passive income |
FAQs
Is SWP better than FD?
How much should you withdraw from SWP?
Are SWP withdrawals taxable?
What is the 7% withdrawal rule?
Is SWP a risk-free investment?
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