SWP Calculator

SWP from Mutual Fund vs. Fixed Deposit

Retirees often face a dilemma: Should they keep their retirement corpus in a Bank Fixed Deposit (FD) and live off the interest, or invest in a Mutual Fund and use a Systematic Withdrawal Plan (SWP)?

While both methods generate monthly income, the Tax Treatment makes a massive difference to your actual "In-Hand" money.

1. The Tax Battle

2. Why MF SWP is superior for Tax?

In a Fixed Deposit, the entire interest earned is added to your income. If you are in the 30% slab, you lose a huge chunk.

In a Mutual Fund SWP, every withdrawal is treated as a mix of "your own money" (Principal) and "Profit" (Gain). You only pay tax on the profit part. Since the initial withdrawals contain mostly your own money, the tax liability is near zero for the first few years!

How to Use the Fixed Deposit SWP Toggle

We added the Fixed Deposit Mode to this calculator for conservative investors.

• Switch to 'Fixed Deposit': The calculator adjusts the return rate to ~6.5% (current bank average).
• Result Analysis: You will notice that because FD returns are lower than Mutual Funds (typically 10-12%), your corpus depletes much faster if you withdraw a high amount.