SIP Vs SWP: Which Is Better?

Producer: Priyanka Das Editor: Mohit Bisht | March 06 , 2025

SIP and SWP are two popular investment strategies designed to help you achieve your financial goals. While both involve regular transactions with mutual funds, they serve distinct purposes.

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A Systematic Investment Plan (SIP) is ideal for long-term wealth creation. It encourages disciplined savings by investing a fixed amount in a chosen mutual fund at regular intervals.

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This approach helps average out the purchase cost over time, known as rupee cost averaging, and potentially mitigates the impact of market volatility.

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SIPs are suitable for investors aiming for long-term growth.

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Conversely, Systematic Withdrawal Plan (SWP) is designed to provide regular income from your investments. It allows you to withdraw a fixed amount from your mutual fund at regular intervals.

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While it offers a steady cash flow, it’s crucial to remember that SWP withdrawals are subject to market fluctuations and the performance of the chosen fund.

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SWPs are particularly beneficial for retirees or individuals seeking periodic income from their investments.

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