Investors searching for a safe investment that will yield them predictable and stable returns can opt for FMPs
Fixed Maturity Plans (FMPs) are debt-oriented schemes, which invest in fixed income securities such as commercial papers, certificate of deposits, corporate bonds or any other money market instrument. It offers both dividend and growth options.
FMPs are closed-ended in nature, meaning that once the NFO is closed, no further money will be accepted. FMPs have fixed maturity dates ranging from 30 days to 365 days. Some even have a three-year or five-year time frame.
FMPs are similar to bank fixed deposits. The difference is that the maturity amount in the case of a bank fixed deposit is guaranteed whereas in the case of a FMP it is indicated. When compared to a bank deposit, FMPs yield competitive returns, as the tax structure of an FMP gives an investor better returns.
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