SIP vs SWP: two sides of one plan
- SIP: money goes into a mutual fund every month — for building wealth.
- SWP: money comes out of a mutual fund every month — for regular income.
- STP (systematic transfer plan): money moves from one fund to another every month — often used between the two.
The SIP and SWP calculator lets you model both sides: use SIP + SWP while you are still saving, and SWP only once you have a lump sum such as a retirement benefit or the proceeds of a property sale.
Which route needs less money?
A SIP spreads the cost over many years and benefits from compounding, so the amount you put in is far smaller than the corpus at the end. A lump-sum SWP needs the full corpus on day one. The table shows how SIPs for 15 years at 12% compare with the income they can support afterwards:
| Monthly SIP (15 yrs, 12%) | Corpus built | Max SWP for 20 yrs at 8% |
|---|---|---|
| ₹5,000 | ₹25,22,880 | ₹20,963 |
| ₹10,000 | ₹50,45,760 | ₹41,925 |
| ₹15,000 | ₹75,68,640 | ₹62,888 |
| ₹25,000 | ₹1,26,14,400 | ₹1,04,813 |
| ₹50,000 | ₹2,52,28,800 | ₹2,09,626 |
Using rupee cost averaging both ways
A SIP buys more units when prices are low and fewer when they are high. An SWP does the reverse: it sells more units when prices are low. That is why SWPs work best from steadier funds, and why many investors keep a cushion of one to three years of withdrawals in a liquid or debt fund.
Combining SIP and SWP at the same time
Some investors run both at once — for example, an SWP from a debt fund to pay monthly bills while a SIP into an equity fund keeps growing long-term wealth. The calculator handles one plan at a time, so model each separately.