This article has an always updated list of mutual fund categories along with their SWP returns for the short, medium, and long term.

📚 Table of Contents

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• Defining SIP, SWP and STP
• How do you calculate returns from SWP?
• How much returns will you get from SWP?

Defining SIP, SWP and STP

All of these are standing instructions that get executed as per a schedule you specify:

• Systematic Investment Plan (SIP): Money from a bank account is invested into a mutual fund, typically once a month
• Systematic Transfer Plan (STP): Units from a mutual fund are redeemed to invest in another mutual fund of the same AMC
• Systematic Withdrawal Plan (SWP): This is the reverse of the SIP. You sell the units from a mutual fund to send money to a bank account

How do you calculate returns from SWP?

Calculating returns from SWP is tricky since it all depends on how much you start with in mutual funds (the starting corpus), how much you withdraw (the SWP amount) every month, the return of the underlying fund and the time of withdrawal. The table below shows the effect of changing one criterion while keeping the other three constant for two investors. As a millennial growing up in the 90s, it is easy to name these investors Sachin and Vinod.

What changes?	What doesn’t change?	Sachin	Vinod	Whose case is better?
Starting Corpus	SWP amount; Return; Time	₹20 lakhs	₹10 lakhs	Sachin
SWP amount	Starting Corpus; Return; Time	₹10,000 /month	₹5,000 /month	Vinod
Return	Starting Corpus; SWP amount; Time	15%/year	10%/year	Sachin
Time	Starting Corpus; SWP amount; Return	15Y SWP	10Y SWP	Vinod

So, if we summarise these factors:

Factor	How does it matter?	Comment
Starting Corpus	Higher is Better	More the starting amount more you can withdraw or allow to grow
SWP amount	Lower is Better	Lesser SWP amount means that more from portfolio is left to grow
Return	Higher is Better	Higher the return more is the corpus growth and more you can withdraw
Time	Lower is Better	Small the time period of withdrawal more is the corpus left

Therefore, to keep things simple, we will assume that the starting portfolio, when the SWP starts, has the same total number of units as sold for the SWP return calculation. This assumption means that if an average of 1,000 units are sold over 10 years via SWP, then the portfolio has 12,000 units in the beginning.

We will now see SWP performance for 5,7 and 10-year withdrawal periods. To simulate real-world inflation, we will show both fixed and 10% annual step-ups in the withdrawals.

SWP for for short-term: 5 years

5-year fixed SWP

Category	Minimum	Median	Maximum
Equity: Large Cap	3.39%	12.73%	29.14%
Equity: Mid Cap	2.14%	17.11%	47.55%
Equity: Small Cap	4.74%	22.9%	59.42%
Hybrid: Aggressive	4.12%	12.07%	28.87%
Hybrid: Conservative	4.07%	8.9%	15.13%
Hybrid: Equity Savings	4.73%	8.53%	15.27%
Commodity: Gold	-7.39%	5.34%	21.54%

5-year SWP with 10% annual step-up

Category	Minimum	Median	Maximum
Equity: Large Cap	4.98%	11.96%	23.48%
Equity: Mid Cap	6.22%	15.83%	39.44%
Equity: Small Cap	8.97%	21.12%	47.42%
Hybrid: Aggressive	5.99%	11.31%	23.37%
Hybrid: Conservative	5.19%	8.23%	13.62%
Hybrid: Equity Savings	5.98%	8.23%	12.39%
Commodity: Gold	-5.33%	7.99%	19.6%

SWP for for medium-term: 7 years

7-year fixed SWP

Category	Minimum	Median	Maximum
Equity: Large Cap	4.43%	11.86%	24.11%
Equity: Mid Cap	5.45%	15.83%	40.51%
Equity: Small Cap	7.97%	21.1%	48.84%
Hybrid: Aggressive	5.51%	11.22%	23.83%
Hybrid: Conservative	4.99%	8.31%	13.88%
Hybrid: Equity Savings	5.76%	8.16%	12.67%
Commodity: Gold	-5.77%	7.77%	20.41%

7-year SWP with 10% annual step-up

Category	Minimum	Median	Maximum
Equity: Large Cap	6.94%	11.61%	18.26%
Equity: Mid Cap	7.85%	13.11%	27.02%
Equity: Small Cap	6.77%	13.42%	29.24%
Hybrid: Aggressive	7.36%	10.7%	16.85%
Hybrid: Conservative	6.22%	8.1%	11.9%
Hybrid: Equity Savings	6.21%	7.67%	9.33%
Commodity: Gold	-2.53%	6.62%	14.61%

SWP for for long-term: 10 years

10-year fixed SWP

Category	Minimum	Median	Maximum
Equity: Large Cap	5.51%	11.39%	20.1%
Equity: Mid Cap	4.68%	12.61%	31.66%
Equity: Small Cap	8.29%	15.58%	32.11%
Hybrid: Aggressive	6.19%	10.66%	18.66%
Hybrid: Conservative	5.51%	8.13%	12.9%
Hybrid: Equity Savings	6.27%	7.9%	10.24%
Commodity: Gold	-4.45%	6.8%	18.96%

10-year SWP with 10% annual step-up

Category	Minimum	Median	Maximum
Equity: Large Cap	8.79%	14.38%	18.89%
Equity: Mid Cap	11.43%	20.5%	28.88%
Equity: Small Cap	12.65%	21.81%	30.23%
Hybrid: Aggressive	8.86%	14.16%	18.15%
Hybrid: Conservative	7.56%	9.63%	11.29%
Hybrid: Equity Savings	7.9%	8.54%	9.14%
Commodity: Gold	0.89%	4.08%	8.46%

This data supports the unsuitability of gold (post-tax returns comparable to FD in the average case and negative worst-case returns) for SWP vs. the other categories in the table.

How much returns will you get from SWP?

You can use this step-up SWP calculator to see how much returns you can get from SWP: