SIP and SWP are not the same. Here's how they differ

Many investors often confuse SIP and SWP. SIP is a way to invest money in mutual funds at regular intervals, helping investors build wealth over time. On the other hand, SWP allows investors to withdraw a fixed amount from their mutual fund investments periodically, making it useful for those who need regular income. SWP involves withdrawing funds from an investment, making it suitable for income generation, while SIP focuses on accumulating wealth through periodic investments," said Swapnil Aggarwal, Director of VSRK Capital. He also pointed out that SIP helps reduce market risk by averaging out the cost of investment, whereas SWP can lead to capital depletion if withdrawals exceed returns.