Generating a steady monthly income from your investments is the ultimate financial dream, right? You want your money to work for you, not the other way around.
This is where a Systematic Withdrawal Plan (SWP) comes into play. Unlike an SIP, where you put money in, an SWP allows you to pull money out regularly while your remaining investment continues to grow.
SWP stands for systematic withdrawal plan. It is essentially the reverse of a SIP. If you are looking for the best SWP plan to secure your financial freedom, you are in the right place.
Here is a comprehensive, down-to-earth guide to the best SWP mutual fund options for 2025.
How can an SWP calculator assist you?
Let's be honest, math can be tricky. When you're trying to figure out how long your money will last while battling inflation, doing it on a napkin won't cut it.
An SWP calculator does the heavy lifting for you. It helps you determine exactly how much you can withdraw monthly without draining your savings too fast.
SWP Calculator – You can use this tool to estimate your monthly income and see how long your investments will last.
What is SWP in mutual funds?
What is SWP meaning in mutual funds? Simply put, it’s a facility that allows you to withdraw a fixed amount from your mutual fund investment on a specific date every month (or quarter).
For example, if you have ₹50 Lakhs invested and you want ₹30,000 per month, you set up an SWP. The mutual fund house will sell enough units to generate ₹30,000 and send it to your bank account. The best part? The rest of your money stays invested and keeps earning returns.
Example of Systematic Withdrawal Plan
Let's say you invest ₹10 lakh in a hybrid mutual fund.
- Investment: ₹10,00,000
- Expected Return: 10% per annum
- Monthly Withdrawal (SWP): ₹6,000
In this scenario, you get ₹6,000 every month. Since your withdrawal rate (approx. 7.2% yearly) is lower than the expected return (10%), your original capital of ₹10 Lakhs actually grows over time, rather than shrinking. This is the magic of the best systematic withdrawal plan mutual fund.
Overview of the Best SWP Mutual Funds in India for 2025.
When choosing the top SWP mutual funds, consistency is key. You generally want funds that are not too volatile.
This is why "Aggressive Hybrid" or "Balanced Advantage" funds are usually the best SWP funds they mix stocks (for growth) and bonds (for safety).
However, for those with a higher risk appetite who want aggressive growth, some Flexi Cap and Large & Midcap funds also make the list.
Top SWP Mutual Funds for Monthly Income in India (2025)
| Fund Name | Category | NAV (₹) | Expense Ratio (%) | 3Y Return (%) |
| Motilal Oswal Large & Midcap | Equity | 38.02 | 0.67 | 120.9 (Abs) |
| SBI Equity Hybrid Fund | Aggressive Hybrid | 311.22 | 0.76 | 14.8 |
| ICICI Pru Equity & Debt | Aggressive Hybrid | 367.45 | 1.1 | 17.7 |
| HDFC Balanced Advantage | Dyn Asset Alloc | 577.85 | 0.78 | 18.1 |
| Parag Parikh Flexi Cap | Flexi Cap | 82.45 | 0.59 | 19.8 |
| Canara Robeco Equity Hybrid | Aggressive Hybrid | 420.36 | 0.58 | 12.9 |
| Mirae Asset Aggressive Hybrid | Aggressive Hybrid | 39.02 | 0.42 | 14.5 |
| Kotak Equity Hybrid Fund | Aggressive Hybrid | 74.77 | 0.47 | 16.2 |
| DSP Aggressive Hybrid Fund | Aggressive Hybrid | 364.31 | 0.75 | 14.4 |
| Nippon India Equity Hybrid | Aggressive Hybrid | 122.32 | 1.08 | 16.8 |
| Quant Aggressive Hybrid | Aggressive Hybrid | 435.31 | 0.65 | 18.5 |
Note: Returns are annualized unless specified as Absolute (Abs). Data is subject to market changes.
10 Best SWP Mutual Funds in India
Here is a detailed look at the top performing funds suitable for SWP.
1. SBI Equity Hybrid Fund
This is often considered the best SWP choice for conservative investors who want peace of mind. It has a massive track record of balancing risk and reward.
- NAV: ₹344.62
- Expense Ratio: 0.71% (Direct)
- AUM: ₹81,951 Cr
- Minimum lump sum investment: ₹1,000
- Returns:
- 1Y Return: 12.80%
- 3Y Return: 14.84%
- 5Y Return: 13.67%
2. ICICI Prudential Equity & Debt Fund
A classic hybrid fund that manages to deliver equity-like returns with lower volatility.
- NAV: ₹459.08
- Expense Ratio: 1.10%
- AUM: ₹48,071 Cr
- Minimum lump sum investment: ₹5,000
- Returns:
- 1Y Return: 19.38%
- 3Y Return: 19.39%
- 5Y Return: 19.02%
3. Motilal Oswal Large & Midcap Fund
If you are looking for high growth to support a larger withdrawal, this equity fund has been a star performer. Note that as an equity fund, it carries higher risk than hybrid funds.
- NAV: ₹38.02
- Expense Ratio: 0.67%
- AUM: ₹13,777.98 Cr
- Minimum lump sum investment: ₹500
- Returns:
- 1Y Return: 52.3%
- 3Y Return: 120.9% (Absolute)
- 5Y Return: 274.3% (Absolute)
4. HDFC Balanced Advantage Fund
This fund dynamically shifts between equity and debt based on market conditions, making it one of the best SWP mutual funds for volatile markets.
- NAV: ₹577.85
- Expense Ratio: 0.73%
- AUM: ₹1,06,493 Cr
- Minimum lump sum investment: ₹100
- Returns:
- 1Y Return: 19.5%
- 3Y Return: 18.2%
- 5Y Return: 18.8%
5. Parag Parikh Flexi Cap Fund
While this is a pure equity fund, its strategy of buying high-quality companies (including US stocks) provides a stability that many retirees love.
- NAV: ₹95.00
- Expense Ratio: 0.63%
- AUM: ₹1,25,800 Cr
- Minimum lump sum investment: ₹1,000
- Returns:
- 1Y Return: 9.95%
- 3Y Return: 21.83%
- 5Y Return: 22.5%
6. Canara Robeco Equity Hybrid Fund
A consistent performer that protects the downside very well.
- NAV: ₹420.36
- Expense Ratio: 0.58%
- AUM: ₹11,402 Cr
- Minimum lump sum investment: ₹5,000
- Returns:
- 1Y Return: 12.5%
- 3Y Return: 14.16%
- 5Y Return: 15.2%
7. Mirae Asset Aggressive Hybrid Fund
This fund takes a slightly bolder approach within the hybrid space, great for long-term SWPs (5+ years).
- NAV: ₹39.02
- Expense Ratio: 0.38%
- AUM: ₹9,424 Cr
- Minimum lump sum investment: ₹5,000
- Returns:
- 1Y Return: 14.4%
- 3Y Return: 14.45%
- 5Y Return: 15.9%
8. Kotak Equity Hybrid Fund
Known for its robust debt portfolio, which acts as a cushion during stock market crashes.
- NAV: ₹74.77
- Expense Ratio: 0.47%
- AUM: ₹8,402 Cr
- Minimum lump sum investment: ₹1,000
- Returns:
- 1Y Return: 15.6%
- 3Y Return: 15.67%
- 5Y Return: 17.5%
9. DSP Aggressive Hybrid Fund
A veteran fund in the category that focuses on growth-oriented stocks balanced with high-rated bonds.
- NAV: ₹411.25
- Expense Ratio: 0.65%
- AUM: ₹11,909 Cr
- Minimum lump sum investment: ₹500
- Returns:
- 1Y Return: 9.65%
- 3Y Return: 16.60%
- 5Y Return: 13.79%
10. Nippon India Equity Hybrid Fund
This fund has a history of declaring dividends and managing regular payouts effectively.
- NAV: ₹122.32
- Expense Ratio: 1.08%
- AUM: ₹4,081 Cr
- Minimum lump sum investment: ₹500
- Returns:
- 1Y Return: 15.5%
- 3Y Return: 15.54%
- 5Y Return: 17.1%
Benefits of Investing in SWP Mutual Funds
- Regular Income: The most obvious benefit. You get a salary-like income even after retirement.
- Tax Efficiency: This is a big one. What are the tax implications of SWP mutual funds? Unlike Fixed Deposit interest which is taxed as per your slab, SWP is taxed as Capital Gains. You only pay tax on the profit portion of your withdrawal, not the principal.
- Capital Growth: If you withdraw sensibly (e.g., 6% withdrawal when the fund earns 10%), your money keeps growing.
- Flexibility: You can stop, pause, or increase the SWP amount anytime.
Risks Involved in SWP Mutual Funds
- Market Risk: If the market crashes just as you start your SWP, you might be selling units at a low price. This can deplete your capital faster (Sequence of Returns Risk).
- Capital Erosion: If you withdraw more than the fund earns (e.g., withdrawing 12% when the fund earns 8%), you will eventually run out of money.
Things to Keep in Mind Before Investing in a SWP Plan
- Don't withdraw too much: stick to the "safe withdrawal rate." What are the 4 rules for SWP? This rule suggests you should withdraw only 4% of your total corpus annually to ensure your money lasts for 30+ years.
- Choose the right fund: Avoid pure small-cap or sector funds for SWP. They are too volatile. Stick to hybrids or flexi caps.
- Tax Buckets: How much SWP is tax free? For equity funds, Long Term Capital Gains (gains after 1 year) up to ₹1.25 Lakh per year are completely tax-free.
Who Should Invest in SWP Mutual Funds?
- Retirees looking for a pension replacement.
- Individuals taking a career break or sabbatical.
- Anyone needing a secondary stream of income to pay bills or EMIs.
How to Invest in SWP Mutual Funds
Can I start an SWP right after investing in mutual funds?
Yes, absolutely.
- Select the Fund: Choose from the list above.
- Invest a Lump Sum: Put your corpus into the fund.
- Register SWP: Log in to the AMC website or your broker app, select "SWP", choose the amount, date, and duration.
- Enjoy: The money hits your bank account automatically.
Criteria to Choose the Best SWP Mutual Fund
- Low Volatility: The fund shouldn't crash hard when the market dips.
- Consistent Returns: Look for 3Y and 5Y consistency, not just last year's hero.
- AUM: A reasonably large AUM (Assets Under Management) indicates trust.
Setting up an SWP is one of the smartest ways to manage your wealth. It puts you in control, offers better tax treatment than FDs, and keeps your capital working for you.
Whether you choose a stable hybrid fund like SBI Equity Hybrid or a growth-focused one like Motilal Oswal, the key is to start with a plan.
Which mutual fund is best for SWP in 2025? While there is no single winner, SBI Equity Hybrid and ICICI Prudential Equity & Debt are top contenders for stability.
Frequently Asked Questions
Is SWP good for monthly income?
Yes, it is excellent because it is tax-efficient and flexible compared to traditional dividends or interest income.
Which SWP gives the best returns?
Equity funds give the best returns, but they are risky. Aggressive hybrid funds offer the best balance of returns and safety for SWP.
How to get 10,000 monthly income?
To get ₹10,000 monthly, assuming a safe withdrawal rate of 6% annually, you need a corpus of approximately ₹20 Lakhs invested.
What is the 70/30/10 rule for money?
This is a budgeting rule: 70% for needs, 20% for savings, and 10% for wants/debt repayment.
What are the tax implications of SWP mutual funds?
Withdrawals are treated as redemptions. For equity funds held >1 year, gains up to ₹1.25 Lakh/year are tax-free. Gains above that are taxed at 12.5%.
