SWPs for mutual funds investments are now live on Coin

Zerodha Coin - Direct MF
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Systematic Withdrawal Plan (SWP) on Coin for your Mutual Funds Investments is now live. Zerodha SWPs, distinct from conventional SWPs provided by Asset Management Companies, and allows users to systematically withdraw funds from the mutual fund holdings, set the frequency as per the requirement and pause it whenever required.

How Zerodha SWP works?

Zerodha SWP operates based on the selected withdrawal amount, with unit calculations made on the execution date. You can set up an SWP with a minimum amount of ₹500, and choose from various withdrawal frequencies such as weekly, fortnightly, monthly, and quarterly.

SWP requests can be initiated one day before the trigger date.

Orders are automatically triggered on the chosen date at 10:00 AM and are processed by 3:00 PM on the same business day. On the specified order trigger date, our backend system calculates the units based on the Net Asset Value (NAV) from the previous trading day (T-1 day) and places a redemption order directly with the exchange.

Please note that once an order is triggered, it cannot be cancelled.

How does Zerodha SWP order execution work for Non-POA and Non-DDPI users?

For users without Power of Attorney (POA) or Demat Debt Instruction (DDPI), the user must authorize the units through CDSL before 3:00 PM on the same day. You will receive a notification from the Coin app and an email as well to authorize the units on the same day otherwise the order will fail. To learn more, see How can units be authorized for redemption on CDSL after a SWP order is triggered?

How to create a SWP?

To create a SWP, follow these steps:

  1. Tap on Investments.
  2. Select the fund from the portfolio section and tap on it.
  3. Tap on 3 dots and tap on SWP.
  4. Enter the withdrawal amount.
  5. Select the frequency.
  6. Tap on Create SWP.

To learn more, see What is SWP and how to create one on Coin app?

Anything else you need to understand about SWP

  • SWPs can be created one day prior to the desired withdrawal date.

  • SWPs can be created for ELSS (Equity Linked Saving Scheme) schemes, and there are no restrictions on creating SWP requests for units in a lock-in period.

  • On non-business days, SWP orders will be triggered but processed on the next working day.

  • The number of units redeemed for SWP is determined based on the NAV of the previous trading day (T-1) using the formula: Redemption Units = SWP Amount / T-1 Day's NAV

  • If all units for a particular scheme are redeemed, the SWP order will fail, and a notification will be triggered. SWP orders will have a distinct tag in the order history for easy identification.

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Say I set up an SWP of 10k every month on a fund with a Balance of 99k
that’ll mean 9 SWPs of 10k each
what will happen on the day of the 10th SWP?

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Yes, if you set up a monthly withdrawal on the 10th of every month, in 9 instalments 90k worth of units will be redeemed. The last instruction will fail and you will be notified.

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Will the SWP get paused automatically or will we have to do it normally?
Can the system of SWP be modified a little to add a one-time or just conditional sell orders? Or did you guys already have in your to-do list? Eg. I’d like 10k Redeemed from a certain fund when the NAV hits so and so value similar to take profit levels.

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As of now, the SWP will be active but the trigger will fail till you add more units to the scheme or pause or delete the SWP.

The conditional order on the buy and sell side is on our to-do list.

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Is it possible to use SWP investment as collateral in Zerodha for trading

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SWP is for withdrawing invested amount from your mutual fund investments. This is different from SIP where you invest in mutual funds.

You can start a SIP on Coin and if the fund is approved for pledging, you can pledge it for collateral margin for trading in F&O. You can check the process to set-up SIP here and the list of securities approved for pledging here.

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Any chances of seeing the STP feature on Coin in the future? My investments revolves around the Zerodha ecosystem (Kite, Coin, Small Case, Tijori). I will be required to avail the STP feature in the future. Don’t intend use another platform just to avail this feature.

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Yes, STP is work in progress, will be available soon on Coin.

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When does weekly SWP is executed? If i start on Thursday then will it will be scheduled for every Friday? Is it possible to specify which day of week SWP should be executed?

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As of now, the logic is similar to the SIP, where it will consider 7 days from the created date. Having SIP/SWP execution as per the day of the week is something that is on our to-do list.

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@Neelesh Can we get a date for STP rollout? Eagerly waiting for the same.

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STP is WIP it will take some time but will be rolled out soon!

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@Neelesh An approximate date is appreciated.

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If I invest in MF and pledge it to do option selling, can I still do SWP on the Pledged holdings?

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Cannot comment on the concrete date as of now.

You can create the SWP, but the order will fail since the units are pledged.

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Ok, thank you

19

If sufficient units is their after pledged limited units. Can we do SWP now.

As per your criteria order will fail if and only if enough units not available for swp. Right

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Yes, the order will fail if the units are pledged in the backend. FYI soon we will start should the number of units pledged for mf

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Having STP is most awaited feature im coin this will help motivate coin users to prefer mf sip using coin. 2024 is about to begin soon any good news om expected tentative date?

Also ome more question recently observed that coin mandate max lkmit is 1 crores and doesn’t gives option to edit the max limit of mandate while.creating why this change? Earlier mandate limit default was 1 lakhs