SWP CALCULATOR
SWP
Total Investment
Rs. 0
Total Withdrawal
Rs. 0
Final Value
Rs. 0
What is Systematic Withdrawal Plan (SWP) ?
A Systematic Withdrawal Plan (SWP) is a financial strategy that enables investors to withdraw a predetermined amount or a specific number of units from their mutual fund investments at regular intervals, such as monthly, quarterly, semi-annually, or annually. This method offers a reliable income stream, making it particularly advantageous for retirees, individuals requiring consistent cash flow, or those who may not have the time to actively oversee their investments. SWPs offer various withdrawal options, including the choice to withdraw only the gains to safeguard the principal, and they may result in lower tax liabilities compared to fixed deposits. By systematically redeeming mutual fund units based on the selected amount and frequency, SWPs help ensure a dependable cash flow while allowing the remaining investment to continue growing. This method supports financial stability and effective financial planning over time.
What is the SWP Calculator?
The SWP (Systematic Withdrawal Plan) Calculator estimates the withdrawals from your investments periodically. This tool is ideal for those looking to withdraw a fixed sum regularly, while the remaining balance continues to grow.
How does SWP (Systematic Withdrawal Plan) work?
The formula to calculate the future value of an SWP investment is:
A = PMT × [(1 + r/n)nt - 1] / (r/n)
where:
- A is the future value of the investment
- PMT is the payment amount for each period
- r is the annual interest rate (as a decimal)
- n is the number of times interest is compounded per year
- t is the number of years the money is invested
Let's understand about SWP (Systematic Withdrawal Plan) work with basic example:
Let's assume you invested NPR 50,000 in the NIC ASIA Dynamic Debt Fund for a year. You decided to withdraw NPR 2,000 per month as part of your SWP (Systematic Withdrawal Plan).
Each month, your investment in the fund will reduce by NPR 2,000, while the remaining balance continues to stay invested, earning an annual return of 8% (0.67% per month)*.
Assuming monthly compounding, at the end of 12 months, your final balance after systematic withdrawals will be approximately **NPR Rs.29,250*.
| Month | Opening Balance | Withdrawal (Monthly) | Interest Earned |
|---|---|---|---|
| 1 | Rs. 50,000 | Rs. 2,000 | Rs. 333 |
| 2 | Rs. 48,333 | Rs. 2,000 | Rs. 322 |
| 3 | Rs. 46,655 | Rs. 2,000 | Rs. 311 |
| 4 | Rs. 44,966 | Rs. 2,000 | Rs. 300 |
| 5 | Rs. 43,266 | Rs. 2,000 | Rs. 288 |
| 6 | Rs. 41,554 | Rs. 2,000 | Rs. 277 |
| 7 | Rs. 39,831 | Rs. 2,000 | Rs. 266 |
| 8 | Rs. 38,097 | Rs. 2,000 | Rs. 254 |
| 9 | Rs. 36,351 | Rs. 2,000 | Rs. 242 |
| 10 | Rs. 34,593 | Rs. 2,000 | Rs. 231 |
| 11 | Rs. 32,824 | Rs. 2,000 | Rs. 219 |
| 12 | Rs. 31,043 | Rs. 2,000 | Rs. 207 |
The formula helps determine the accumulated value of your investment over time while allowing for systematic withdrawals to meet your financial goals.
How to Use the SWP Calculator
- Enter the initial investment amount and withdrawal details.
- Select the withdrawal frequency and rate of return.
- Click "Calculate" to view the balance after each withdrawal period.