What is Systematic Withdrawal Plan?
A Systematic Withdrawal Plan (SWP) is a facility that allows an investor to withdraw funds from an existing mutual fund scheme at predetermined intervals. The money withdrawn from a systematic withdrawal plan can be reinvested in another portfolio or it can be used as a source of regular income. Investors looking for income at periodical intervals usually invest in SWP. Often, a SWP is used to fund expenses during retirement. What are types of SWPs? Withdrawals can be of fixed or variable amounts. These withdrawals can be made on a monthly, Quarterly, semi-annual or annual schedule. The holder of the plan may choose withdrawal intervals based on his or her commitments and needs. SWP is usually available in two options: Fixed Withdrawal - Under this you specify amount you wish to withdraw from your investment on a Monthly/ Quarterly basis. Appreciation Withdrawal - Under this you can withdraw your appreciated amount on a Monthly / Quarterly basis. How does SWP work? Let's understand this process with the help of an example: Let's say you have 5,000 units in a Mutual Fund scheme. You have given instructions to the fund house that you want to withdraw ₹ 8,000 every month through SWP. Now let's assume that on 1st December, the Net Asset Value (NAV) of the scheme is ₹ 20. Equivalent number of MF units = ₹ 8,000 / ₹ 20 = 400. Hence, 400 units would be redeemed from your MF holdings, and ₹ 8,000 would be given to you. Your remaining units will be 4,600 (5,000 - 400= 4,600). Now say, on 1st January, the NAV is ₹ 16. Equivalent number of units = ₹ 8,000 / ₹ 16 = 500 Hence, 500 units would be redeemed from your MF holdings, and ₹ 8,000 would be given to you. So your final remaining units will be 4100 (4600 - 500 = 4100). In this way, units from your mutual fund holdings are redeemed in a systematic way to provide you with continuous income
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015
1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. IDFC Tax Advantage (ELSS) Fund
4. ICICI Prudential Long Term Equity Fund
5. Religare Tax Plan
6. Franklin India TaxShield
7. DSP BlackRock Tax Saver Fund
8. Birla Sun Life Tax Relief 96
9. Reliance Tax Saver (ELSS) Fund
10. HDFC TaxSaver
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Good Returns by Investing in ELSS Mutual Funds Online
Invest in Tax Saver Mutual Funds Online
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300
Posts
No comments:
Post a Comment