SWP stands for Systematic Withdrawal Plan, and it works like a SIP in reverse — instead of investing a fixed amount every month, you withdraw a fixed amount every month from an investment you already hold. It's a popular way to convert a lumpsum corpus, such as retirement savings, into a steady monthly income stream while the remaining balance stays invested and continues to grow.
For example, if you have a ₹50 lakh corpus in a mutual fund, you might set up an SWP to withdraw ₹30,000 every month, while the rest remains invested and hopefully continues earning returns that partially or fully offset your withdrawals. This can also be more tax-efficient than a traditional pension or interest income in some cases, since each withdrawal is only partly taxed as capital gains, with the rest treated as return of your own principal.