Growth vs IDCW (Dividend): which option to choose?

Every mutual fund offers two options: Growth and IDCW (Income Distribution cum Capital Withdrawal — the new name for "Dividend"). They hold the same portfolio; the difference is what happens to profits.

The difference

• Growth — profits stay invested and compound. The NAV rises over time. You realise gains only when you sell.
• IDCW — the fund periodically pays out part of the NAV as a "dividend". The NAV drops by that amount each time.

Why Growth usually wins

An IDCW payout is not free money — it's just your own capital returned, and it's taxed at your slab rate in your hands. Growth lets your money compound untouched and is far more tax-efficient.

If you need regular income

Choose Growth and set up an SWP instead of IDCW. You control exactly how much you withdraw, and only the small gain portion is taxed — much better than IDCW.

→ Funds on Dhanik default to the Growth option. Plan income with the SWP calculator.