- Summary
- A Systematic Withdrawal Plan provides regular income while allowing the remaining mutual fund investment to stay invested and grow.
- Choosing the right SWP mutual fund depends on returns, risk, costs, portfolio composition, and investment goals. As of 23 October, 2026, Motilal Oswal Nasdaq 100 FoF is considered as the most popular SWP mutual fund, with 34.69% of 3 yr CAGR, and 20.64% of 5 Yr CAGR.
- Before you invest in any fund, you should consider its historical performance, expense ratio, benchmark, portfolio, AUM, objective, and risk level. Investors can use SIPs to invest regularly, and direct plans usually have lower costs than regular plans.
A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from your mutual fund at regular intervals while the remaining money stays invested. It can be a useful way to create a steady income, meet planned expenses, or manage your investments in a better manner.
Investors in 2026 could opt for funds such as Motilal Oswal Nasdaq 100 FoF, ICICI Pru Silver ETF FoF, Kotak US Specific Equity passive FoF, depending on their financial goals and risk appetite.
Choosing the right mutual fund is just as important as deciding how much to withdraw. Let’s look at the best SWP mutual funds worth considering in 2026.
Best 10 SWP Mutual Funds: Quick Comparison
The best SWP mutual funds as of 23 October 2026 by their assets under management (AUM) are listed below:
| Name of Fund | Sub category | CAGR 3 Yr | CAGR 5 yr | Benchmark 5 yr | AUM (in ₹ cr) | Expense ratio (%) | Minimum SIP | Risk |
| Motilal Oswal Nasdaq 100 FoF | FoF (Overseas) | 34.69% | 20.64% | 8.00% | ₹8,032 cr | 0.40% | ₹500 | Very High |
| ICICI Pru Silver ETF FoF | FoFs (Domestic)-Silver | 37.79% | – | 6.14% | ₹6,180 cr | 0.56% | ₹100 | Very High |
| Kotak US Specific Equity Passive FoF | FoF (Overseas) | 31.44% | 19.27% | 8.00% | ₹4,689 cr | 0.29% | ₹100 | Very High |
| Motilal Oswal S&P 500 Index Fund | Index Fund | 26.97% | 16.17% | 8.00% | ₹4,584 cr | 0.90% | ₹500 | Very High |
| Edelweiss US technology equity FoF | FoF (Overseas) | 29.29% | 12.87% | 8.00% | ₹4,547 cr | 1.31% | ₹100 | Very High |
| HDFC Silver ETF FoF | FoFs (Domestic)-Silver | 37.71% | – | 5.80% | ₹4,497 cr | 0.47% | ₹100 | Very High |
| Nippon India Silver ETF FoF | FoFs (Domestic)-Silver | 37.66% | – | NA | ₹4,354 cr | 0.41% | ₹100 | Very High |
| SBI Silver ETF FoF | FoFs (Domestic)-Silver | – | – | NA | ₹3,728 cr | 0.55% | ₹500 | Very High |
| TRUSTMF Small cap Fund | Small cap Fund | – | – | 16.57% (1 year CAGR) | ₹3,877 cr | 1.64% | ₹1,000 | Very High |
| ICICI Pru US Bluechip Equity Fund | Thematic Fund-Global | 19.11% | 12.25% | 8.00% | ₹3,797 cr | 1.64% | ₹100 | Very High |
Top 10 SWP Mutual Funds in India
Each fund is built for a different kind of investor need, from long-term growth to near-term capital protection.
- Motilal Oswal Nasdaq 100 FoF
Motilal Oswal Nasdaq 100 FoF is a foreign fund of funds that invests in companies listed on the Nasdaq-100 Index. It gives investors from India an opportunity to diversify away from domestic stocks and invest in US-listed non-financial companies. The fund’s 3-year CAGR is 34.69%, and the 5-year CAGR is 20.64%. It has an AUM of ₹8,032 crore, an expense ratio of 0.40%, and a minimum SIP of ₹500. The fund has a 5-year benchmark return of 8.00%. The risk classification is Very High.
- Strengths: The Motilal Oswal Nasdaq 100 FoF has delivered strong returns in both reporting periods. The fund’s expense ratio of 0.40% is relatively low, and international exposure helps diversify an investment portfolio focused solely on Indian stocks.
- Drawbacks: The fund’s returns can depend on volatility in the US market, currency fluctuations, and high concentration in growth stocks.
- ICICI Prudential Silver ETF FoF
ICICI Prudential Silver ETF FoF allows investors to invest in silver through a domestic silver ETF. Compared to equity funds, the performance of the said scheme is affected more by the price of silver than by companies earnings or dividends. The ICICI Prudential Silver ETF FoF has a 3-year CAGR of 37.79%, AUM of ₹6,180 crore, and an expense ratio of 0.56%.
The fund’s SIP is ₹100, and its risk category is Very High. Investors can access silver through this fund without purchasing or holding physical silver. However, the price of silver may vary widely based on factors such as industrial demand and the global economy.
- Strengths: Investors get an easy way to invest in silver through mutual funds. This fund is accessible due to its ₹100 minimum SIP. Additionally, exposure to silver can complement investments in equity and debt markets.
- Drawbacks: Silver is not a source of income as it does not pay interest or dividends. Furthermore, the price of silver tends to move sharply.
- Kotak US Specific Equity Passive FoF
Kotak US Specific Equity Passive FoF is a fund that provides international equity exposure through a passive approach. This fund enables Indian investors to invest in the US equity market without buying any foreign stocks. The CAGR of this fund over the last 3 years is 31.44%, whereas it is 19.27% over the last 5 years.
The AUM of this fund is ₹4,689 crore, having an expense ratio of 0.29% and a minimum SIP of ₹100. The 5-year benchmark return of this fund is 8.00%. Very High is the risk category of this fund. It has a passive approach, meaning this fund uses the underlying investment strategy rather than an active one.
- Strengths: The expense ratio of 0.29% is the lowest. Moreover, its ₹100 minimum SIP makes it easier for investors to make small, consistent investments and gain geographic diversification by investing in foreign markets.
- Drawbacks: Returns could be affected by declines in the US stock market and the rupee-dollar exchange rate.
- Motilal Oswal S&P 500 Index Fund
The Motilal Oswal S&P 500 Index Fund is an Indian mutual fund that enables access to the United States equities market through index investing. The S&P 500 comprises companies across various industries, providing broader exposure than a sector-focused fund.
The 3-year CAGR for the fund is 26.97%, and the 5-year CAGR is 16.17%. The fund’s AUM is ₹4,584 crore, the expense ratio is 0.90%, and the minimum SIP is ₹500. The 5-year benchmark return is reported to be 8.00%. The risk category of the fund is Very High.
- Strengths: The fund offers exposure to a variety of companies in the United States of America belonging to different industries. The index fund follows a predefined benchmarking process, while international exposure could provide diversification to the portfolio of domestic investments.
- Drawbacks: It would still involve risks associated with volatility in the US equity market and currency fluctuations. Its 0.90% expense ratio is relatively high.
- Edelweiss US Technology Equity FoF
Edelweiss US Technology Equity FoF is a foreign fund that invests in US-based technology companies. The fund’s investment style could suit an investor who wishes to invest in companies in sectors such as software, semiconductors, and digital services. The 3-year and 5-year CAGRs of the fund are 29.29% and 12.87% respectively.
The fund’s AUM stands at ₹4,547 crore, the expense ratio is 1.31%, and the minimum SIP is ₹100. The fund’s 5-year benchmark return is 8.00%. The fund’s risk level is Very High, as the investment is market-linked overseas equity.
- Strengths: The fund offers exposure to US-based technology companies and is geographically diversified, unlike Indian equities. The ₹100 minimum SIP enables investors to invest even with a small amount.
- Drawbacks: Technology companies incur significant losses when valuations change or growth expectations are reduced. The 1.31% expense ratio is relatively high, and currency fluctuations affect investors from India.
- HDFC Silver ETF FoF
HDFC Silver ETF FoF is a fund that allows investors to invest in silver through its underlying exchange-traded fund. The performance of this fund depends on silver prices and can vary with demand, general economic conditions, and investments. This fund has an AUM of ₹4,497 crore, an expense ratio of 0.47% and a minimum SIP of ₹100.
The risk category for this fund is Very High. It might be suitable for investors seeking exposure to the precious metal through a mutual fund rather than purchasing and storing physical silver. But silver prices can fluctuate sharply and do not provide any income.
- Strengths: This fund allows investors to access silver without handling physical assets. The minimum SIP of ₹100 will facilitate smaller investments. Commodities exposure will diversify the investor’s portfolio, including equities and debts.
- Drawbacks: Silver prices can be highly volatile and may decline in response to reduced demand or other market changes. There are no interest or dividend payments from the investment.
- Nippon India Silver ETF FoF
Investors looking to invest in silver could consider the Nippon India Silver ETF FoF. The net asset value of this fund is determined by the price of silver in India and may also be influenced by the global commodities market, industrial demand, currency movements, and investor sentiment.
The fund has AUM of ₹4,354 crore, an expense ratio of 0.41%, and a minimum SIP of ₹100. The fund comes under the Very High risk category. The fund is one of the options available to investors seeking silver through a mutual fund rather than owning physical silver.
- Strengths: The fund is easy to invest in for exposure to silver. The fund has a low SIP of ₹100 and also an expense ratio of 0.41%. The expense ratio is lower than that of all the other silver funds listed in this comparison.
- Drawbacks: Silver prices can be highly volatile, making the return on investment unpredictable. There will be no interest or dividend on this investment.
- SBI Silver ETF FoF
The SBI Silver ETF FoF gives its investors the opportunity to invest in silver through an exchange-traded fund that serves as its underlying asset. The fund’s performance depends on silver prices rather than on the company’s profits, losses, or dividends. The fund’s AUM is ₹3,728 crore; its expense ratio is 0.55%, and the minimum SIP is ₹500.
It belongs to the category Very High Risk. This fund may attract those who need to diversify their investments by adding a commodity component without having to buy and hold actual silver. The value of the investment may fluctuate depending on world silver prices and other factors.
- Strengths: The fund allows investors to invest in silver through a convenient mutual fund structure. It may become another asset that investors can include alongside equity or debt investments, given its ETF underpinnings.
- Drawbacks: Silver prices may be highly volatile, and this fund does not provide regular income. It has an expense ratio of 0.55%, and the expenses of its ETFs may negatively affect performance when silver prices remain flat or decline.
- TRUSTMF Small Cap Fund
The TRUSTMF Small Cap Fund invests in the small-cap portion of the stock market. Small-cap stocks could have growth potential due to expanding businesses but may carry more uncertainty than established large-cap stocks. The fund has AUM of ₹3,877 crore, an expense ratio of 1.64%, and a minimum SIP of ₹1,000.
The fund risk category is Very High. The investment strategy of the fund includes risks from volatility in the price of stocks of small companies based on the factors of earnings, economy, liquidity, and overall market sentiment.
- Strengths: The fund allows you to invest in small-cap stocks with potential for revenue and market share expansion. The focus on small-cap stocks can be useful when the fund is combined with other funds based on different market cap categories.
- Drawbacks: Stocks in this fund category can experience significant price declines during market corrections. Stocks of small-cap companies have less liquidity than other stocks. The expense ratio of 1.64% is relatively high, and the minimum SIP amount of ₹1,000 is also high.
- ICICI Prudential US Bluechip Equity Fund
ICICI Prudential US Bluechip Equity Fund is a fund that enables investors to invest in mature companies in the US via an overseas equity investment strategy. Blue-chip stocks are generally well-established, but their stock prices remain susceptible to economic conditions, profitability, and valuations.
ICICI Prudential US Bluechip Equity Fund has a 3-year CAGR of 19.11% and a 5-year CAGR of 12.25%. The fund’s AUM is ₹3,797 crore, its expense ratio is 1.64%, and the minimum SIP is ₹100. The reported 5-year benchmark return is 8.00%. It has a risk category of Very High. It may appeal to those who would like to diversify into foreign markets through investments in well-established US companies.
- Strengths: It allows investments in well-established US companies. It is a fund that diversifies investors geographically, outside of the Indian equity market. It has a relatively low minimum SIP of ₹100.
- Drawbacks: Downturns in US equity markets and fluctuations in the exchange rate between the US Dollar and the Indian Rupee can affect returns. The relatively high expense ratio is 1.64%.
How We Selected These SWP Funds?
Building this mutual fund list started with narrowing the universe to funds with a genuine, multi-year performance record, not just favourable point-to-point returns.
- Data Source: Return figures in the comparison table are drawn from independent mutual fund research data, tracking three-year and five-year CAGR alongside benchmark performance for each scheme.
- Track Record: Funds with a longer operating history were preferred, since a withdrawal strategy benefits from performance data that spans more than one market cycle.
- Performance in the past: Evaluation of the historical performance of the funds in various periods. It will help us to evaluate the performance of the funds in different scenarios.
- Consistency of returns: Consistency in returns is an important characteristic we consider when selecting the funds. Consistency is helpful in evaluating funds for long-term investment.
- Market risk of the funds: Evaluation of each fund based on market risk of the funds. It will help us understand the suitability of the return relative to the risk taken by the investor.
SWP Funds vs Other Fund Categories
SWP is not a fund category on its own. It is a withdrawal facility. The real choice is which category handles regular withdrawals best.
| Parameter | Equity Funds | Debt Funds | Hybrid Funds |
| Growth Potential | High | Low | Moderate to High |
| Capital Stability | Low | High | Moderate |
| Suitability for SWP | Works best with a long horizon | Suits short Horizon and capital protection | Generally the best balanced fit |
| Risk level | Very High | Low to Moderate | Moderately High to Very High |
- Growth potential: Equity funds offer the strongest long-term upside, while debt funds offer the least. Hybrid funds fall somewhere in between depending on their equity allocation.
- Capital stability: Debt funds hold up best when markets turn volatile, equity funds swing the most, and hybrid funds sit in the middle thanks to their built-in debt cushion.
- Suitability for SWP: Equity funds work best over a long horizon as the short-term dips have time to recover. Debt funds suit shorter horizons where capital protection is the priority. Hybrid funds tend to fit the widest range of withdrawal needs.
- Typical risk level: Equity funds sit at Very High, debt funds run Low to Moderate, and hybrid funds land anywhere from Moderately High to Very High depending on how much equity they hold.
Benefits and Risks of SWP Mutual Funds
It helps to look at both sides before committing your savings to an SWP, so your expectations line up with how it actually works.
Benefits
- Regular Cash Flow: Withdrawals take place on a fixed schedule, giving you a predictable income stream, much like a pension.
- Continued Growth Potential: The remaining corpus stays invested and keeps compounding, unlike a fixed deposit where the principal sits idle after maturity.
- Flexibility: Investors can change the withdrawal amount, pause withdrawals or stop the plan entirely.
Risks
- Capital Erosion: If withdrawals exceed what the fund earns, the corpus can shrink steadily and run out earlier than planned.
- Market Dependency: Returns are not guaranteed, and a downturn early in the withdrawal period can hurt the corpus, especially in early stages.
- Tax Impact: Each withdrawal is a redemption for tax purposes, so investors need to track gains and holding periods carefully.
How Much Should You Withdraw Every Month?
Monthly withdrawals from the Systematic Withdrawal Plan (SWP) should be made taking into account several factors, including the size of your investment, your needs, the estimated return on investment, and the investment period. A withdrawal rate of 4% to 6% per annum can be used for estimating purposes, but it does not guarantee that your investment will suffice for the rest of your life.
For example, if your investment in the mutual fund is ₹20 lakh, then a 4% withdrawal rate provides you with ₹6,667 per month, while a 6% withdrawal rate provides ₹10,000 per month. Higher withdrawal rates can increase the risk of depleting your savings, especially in the event of a market downturn.
When choosing the monthly SWP rate, consider several additional factors, such as inflation, mutual fund performance, taxes, and other sources of income, including pensions or rent. Check your SWP rates from time to time and change them if necessary.
Who Should Consider and Avoid SWP Funds?
Suitability depends on the investor’s goals, time horizon and how much volatility they can comfortably sit through.
The following groups can consider investing in SWP funds:
- Retirees needing regular income to replace a salary or pension shortfall
- Investors with a lump sum from a bonus, property sale or maturity payout who want structured monthly access
- Anyone wanting market exposure while still drawing predictable cash flow
SWP funds should be avoided by:
- Investors with a short time horizon of less than three to five years
- Anyone who cannot tolerate temporary declines in their corpus
- Investors who need full capital preserved without any market exposure
How to Choose a SWP Mutual Fund
A few practical checks can help in finding the right scheme for a withdrawal plan:
- Historical Returns: Look at how stable the fund’s performance is over the years, not only its return figures.
- Risk Level: Check the fund’s position on the SEBI riskometer and its volatility relative to category peers before investing your money.
- Expense Ratio: A lower expense ratio means a smaller portion of your returns goes towards fund management costs, allowing you to keep more of your investment gains.
- Fund Manager Experience: An experienced fund manager with a strong track record across different market conditions is more likely to make consistent investment decisions.
- Portfolio Composition: Review the equity-to-debt split and whether the holdings match your comfort with risk.
SIP vs Lump Sum for SWP Funds
Investors can build their mutual fund investment for SWP through SIP or lump-sum investment. The right approach depends on income availability, investment goals, risk tolerance, and the amount available to invest
| Factor | SIP funds | Lumpsum |
| Investment method | Invests a fixed amount at regular intervals, such as monthly | Invests a large amount at one time |
| Initial capital | Requires a smaller initial investment | Requires a substantial amount available upfront |
| Market timing risk | Spreads purchases across different market levels, reducing dependence on a single entry point | The entire amount is exposed to market conditions at the time of investment |
| Suitable investors | Salaried individuals and investors with regular income | Retirees or investors with accumulated savings, bonuses, or other lump-sum funds. |
| Withdrawal planning | An SWP can begin once sufficient eligible units have accumulated | An SWP can generally begin after the investment is made and the scheme’s applicable conditions are met |
Direct vs Regular SWP Funds
The main difference between direct and regular mutual fund schemes lies in how investors buy the fund and the costs involved. When choosing a mutual fund scheme for an SWP, it helps to understand this difference.
| Factor | Direct plan for SWP | Regular plan for SWP |
| Investment method | Investors invest directly with the mutual fund house or through a direct platform | Investors invest through intermediaries such as distributors or financial advisors |
| Expense ratio | Generally has a lower expense ratio because distributor commissions are excluded | Generally has a higher expense ratio because it includes distribution-related expenses |
| Returns | May deliver higher returns than the regular plan of the same scheme, all else being equal | Returns may be lower than the direct plan due to higher expenses, all else being equal |
| Suitable investors | Investors who understand mutual funds and are comfortable managing their portfolios | Investors who prefer distributor support and assistance with investment transactions |
| Long-term impact | Lower expenses may help preserve more of the investment value over time | Higher expenses can reduce the investment value over time compared with an identical direct plan. |
Taxation of SWP Mutual Funds
Every SWP withdrawal counts as a redemption, so each instalment triggers a capital gains event based on the holding period of those units.
For funds where equity allocation is 65% or higher, such as the Aggressive Hybrid category covered here, gains on units held for less than a year attract short-term capital gains (STCG) tax at 20%. Units held for more than a year attract long-term capital gains tax at 12.5%, and gains up to ₹1.25 lakh in a financial year are exempted.
For hybrid or debt-oriented funds with less than 65% equity exposure, capital gains are added to your taxable income and taxed according to your income tax slab, regardless of how long you have held the investment.
SWP withdrawals follow the first-in, first-out (FIFO) rule, which means the units you bought first are redeemed first.
How to Invest in SWP Mutual Fund?
Under the Systematic Withdrawal Plan (SWP), the investor can withdraw a fixed sum from the mutual fund investment at a pre-specified interval. SWP enables the investor and the retiree to receive regular income while maintaining the remaining portion of their investment in the market.
Steps in Setting Up SWP Mutual Fund
- Step 1: Choose the Mutual Fund Scheme: Select a SWP mutual fund scheme that aligns with your financial objectives, time horizon, and risk profile. Debt mutual funds, hybrid mutual funds, and equity mutual funds each have their own risks and returns. Analyze the investment policy, cost, and risk associated with the mutual fund scheme.
- Step 2: Invest a Lump Sum Amount: Invest in the mutual fund scheme you have chosen based on your financial objectives. People can initiate the SWP without making any further investments in an existing mutual fund scheme.
- Step 3: Log in to Your Investment Account: Visit the official website of the mutual fund company or the investment account through which you have invested in the mutual fund. Log in to your investment account and visit your investment portfolio. Make sure your KYC and bank details are up to date.
- Select SWP Facility: Out of the schemes of the mutual fund, select the scheme from which you wish to withdraw. The facility of systematic withdrawal plan will be available to you.
- Provide Your Withdrawal Information: Provide the amount to be withdrawn along with the frequency. This could be on a monthly basis or quarterly. You will have to provide the start date for withdrawals along with the period of time, wherever required. This has to be calculated by using the SWP Calculator very carefully because you need to withdraw mutual fund units each time.
- Approve Your Application: Verify the information provided above, along with information about the scheme, such as withdrawal terms and other related details. Once the registration process is complete, check your bank account and investment statement to confirm the processing of withdrawals.
Other Best Mutual Funds Categories
These are the best mutual fund categories as of 23 October, 2026
| Best equity mutual fund | Best SBI mutual fund | Best Axis mutual fund |
| Best ICICI mutual fund | Best Nifty 50 mutual fund | Best HDFC mutual fund |
| Best UTI mutual fund | Best low risk mutual fund | Best TATA mutual fund |
Final Thoughts
The best SWP fund is the one that suits your goals and risk appetite. Take time to compare the fund’s expense ratio, past performance across different market conditions, and portfolio before making a decision.
A qualified financial advisor can determine a withdrawal rate that supports your income needs while helping preserve your investment over time.
FAQs
As of 23 October 2026, Motilal Oswal Nasdaq 100 FoF, ICICI Pru Silver ETF FoF, Kotak US specific Equity passive FoF, Motilal Oswal S&P 500 Index Fund, and Edelweiss US technology equity FoF are the top 5 performing SWP mutual funds.
It can be a good option if you want regular income from your investments and have a long-term financial plan. Choose a fund that matches your risk profile.
There is no single best fund. The right choice depends on your investment horizon, income needs, and risk tolerance. But, as of 23 October 2026, Motilal Oswal Nasdaq 100 FoF is best performing.
Firstly, determine the financial objective and the time frame for your investment. Next, evaluate the fund’s performance, risk, expense ratio, portfolio, and benchmark performance. Select a fund that suits your ability to take market risk instead of choosing the one with high past performance.
SWPs are suitable for retirees, investors seeking regular income, or anyone looking to withdraw money from a lump sum investment in a disciplined way.
As of 23 October,2026 ICICI Pru Silver ETF FoF is best performing in the last 1 year as it gives 27.23% of return.
No. Since SWPs invest in mutual funds, returns are market-linked, and your capital can fluctuate depending on the fund you choose. It is advisable to review the risks associated with the scheme before investing.
SWPs can offer higher return potential and more flexibility, but they also carry market risk. FDs provide fixed returns with lower risk. The better option depends on your needs.
