Retired or near retirement? The two most popular ways to earn a guaranteed monthly income in India are SWP (Systematic Withdrawal Plan) from mutual funds and the Post Office Monthly Income Scheme (MIS). Both put money in your bank account every month — but they work very differently. One is government-backed with zero risk, the other can potentially give you much more money while also growing your wealth. This guide helps you decide which is right for you.
What is SWP (Systematic Withdrawal Plan)?
An SWP is a facility offered by mutual funds where you invest a lump sum and instruct the fund to transfer a fixed amount to your bank account every month. The remaining corpus stays invested and continues to earn market-linked returns. If your corpus grows faster than your withdrawals, your wealth actually increases while you draw income.
Example: You invest Rs 25 lakh in a balanced advantage fund earning 10% p.a. and set an SWP of Rs 15,000/month. After 10 years, you would have withdrawn Rs 18 lakh — and your corpus would still be worth over Rs 30 lakh.
Use our SWP Calculator to calculate exactly how long your corpus will last with any withdrawal amount.
What is Post Office MIS?
The Post Office Monthly Income Scheme is a government savings scheme where you deposit a lump sum and receive a fixed monthly interest payout. The current interest rate is 7.4% per annum (as of 2026), set by the government and revised quarterly. You cannot invest more than Rs 9 lakh in a single account or Rs 15 lakh in a joint account. The tenure is 5 years, after which you get your principal back.
Example: You deposit Rs 9 lakh in Post Office MIS. Every month you receive Rs 5,550 (Rs 9,00,000 x 7.4% / 12). At the end of 5 years, you get your Rs 9 lakh back. No risk, no surprises.
Use our Post Office MIS Calculator to calculate your exact monthly income.
SWP vs Post Office MIS — Full Comparison Table
(Scroll right on mobile to see full table)
| Feature | SWP (Mutual Fund) | Post Office MIS |
| Returns | 8–12% p.a. (market-linked) | 7.4% p.a. (fixed by govt) |
| Monthly Income | Variable (based on NAV) | Fixed every month |
| Risk | Moderate (equity/hybrid) | Zero (sovereign guarantee) |
| Lock-in | No lock-in (ELSS: 3 years) | 5-year tenure |
| Max Investment | No limit | Rs 9L (single) / Rs 15L (joint) |
| Taxation | LTCG / STCG on withdrawn units | Interest fully taxable (as income) |
| Corpus Growth | Can grow while withdrawing | No — only interest paid out |
| Premature Exit | Any time (small exit load) | Penalty if before 5 years |
| Best For | Long-term income + wealth creation | Risk-free, fixed monthly income |
How Much Monthly Income Can You Get?
Here is a direct comparison of monthly income from both options at different corpus levels (SWP assumes 9% annual return from a balanced/hybrid fund):
| Corpus Invested | SWP Monthly Income (@9%) | MIS Monthly Income (@7.4%) |
| Rs 5,00,000 | Rs 3,750/month | Rs 3,083/month |
| Rs 9,00,000 | Rs 6,750/month | Rs 5,550/month |
| Rs 15,00,000 | Rs 11,250/month | Rs 9,250/month |
| Rs 25,00,000 | Rs 18,750/month | Not eligible (max Rs 15L) |
| Rs 50,00,000 | Rs 37,500/month | Not eligible |
SWP income is indicative. Actual returns depend on fund performance and market conditions.
Key insight: SWP from a Rs 15 lakh corpus gives Rs 11,250/month vs MIS’s Rs 9,250/month — and your Rs 15 lakh corpus can still grow. With MIS, the Rs 15 lakh is returned as-is after 5 years.
Real-Life Examples
Example 1: Radhika (Age 62, Retired Teacher, Conservative Investor)
Radhika has Rs 9 lakh saved and wants guaranteed, zero-risk monthly income. She does not want any market exposure.
| Option chosen | Post Office MIS |
| Corpus invested | Rs 9,00,000 |
| Monthly income | Rs 5,550/month |
| Annual income | Rs 66,600/year |
| Risk | Zero — government guaranteed |
| After 5 years | Rs 9,00,000 returned in full |
| Verdict | Perfect for Radhika — predictable, safe, stress-free |
Example 2: Ramesh (Age 58, Ex-Corporate, Moderate Risk Appetite)
Ramesh has Rs 25 lakh to invest and wants monthly income but also wants his wealth to grow over time.
| Option chosen | SWP from Balanced Advantage Fund |
| Corpus invested | Rs 25,00,000 |
| Monthly withdrawal | Rs 15,000/month |
| Annual withdrawal | Rs 1,80,000/year |
| Assumed fund return | 10% p.a. |
| Corpus after 10 years | ~Rs 38,00,000 (still growing) |
| Total withdrawn in 10 yrs | Rs 18,00,000 |
| Verdict | Ramesh gets income AND his wealth grows — MIS cannot match this |
Calculate your own SWP scenario with our SWP Calculator.
Tax Treatment: SWP vs Post Office MIS
Tax is an important factor that many investors overlook when comparing these two options:
- Post Office MIS interest is fully taxable as per your income tax slab. If you are in the 30% bracket, you pay 30% tax on Rs 66,600 = Rs 19,980 tax per year. No TDS is deducted, but you must declare it in your ITR.
- SWP withdrawals from equity or hybrid funds held for more than 1 year are taxed as LTCG at 12.5% above Rs 1.25 lakh/year. For most retirees with moderate withdrawals, the effective tax is very low or nil.
- Debt mutual fund SWPs are taxed at slab rate — same as MIS. So the tax advantage of SWP only applies when using equity or hybrid funds.
Tax tip: If you are in the 30% slab, SWP from a hybrid equity fund is more tax-efficient than Post Office MIS because of the lower LTCG rate and Rs 1.25L annual exemption.
Who Should Choose SWP?
- You are 45–65 years old with a long income horizon (10+ years)
- You want monthly income AND long-term wealth creation
- You can accept some year-to-year variation in your corpus value
- Your investable corpus exceeds Rs 15 lakh (MIS limit)
- You want flexibility — exit anytime, change withdrawal amount anytime
Who Should Choose Post Office MIS?
- You are 60+ years old with zero risk tolerance
- You want a fixed, predictable amount every single month
- Your investable amount is up to Rs 9 lakh (single) or Rs 15 lakh (joint)
- You do not want to monitor NAV, market news, or fund performance
- You are supplementing another income source (pension, rent) with small fixed top-up
Best Strategy: Combine Both
Many smart retirees use both together. Put Rs 9 lakh in Post Office MIS for guaranteed, stress-free income of Rs 5,550/month. Put the remaining corpus in a hybrid fund SWP for higher income and growth. This way, your basic expenses are always covered by MIS, and SWP gives you the upside.
Related Calculators on GrowCalculators
- SWP Calculator — Calculate how long your corpus lasts with monthly withdrawals
- Post Office MIS Calculator — Calculate your exact MIS monthly income
- Post Office FD Calculator — Compare Post Office FD vs bank FD returns
- SIP Calculator — Build the corpus for your SWP with a SIP today
- Lumpsum Calculator — Estimate returns on a one-time mutual fund investment
Final Verdict
Both SWP and Post Office MIS are excellent options — but for different types of investors. If safety is everything, Post Office MIS is unbeatable. If you want your money to work harder and you can handle mild market fluctuations, SWP from a balanced or hybrid mutual fund will give you significantly more income and growing wealth over time.
For most Indian retirees with a corpus above Rs 15 lakh, a smart split of MIS + SWP is the ideal strategy. Start with our calculators above to find the right numbers for your situation.