Fixed Maturity Plan : What is FMP and what is the benefit if someone invests in FMP?

Published on 06 Jan 2020 / In Investment Planning

What is FMP and what is the benefit if someone invests in FMP?

FMP – Fixed Maturity Plan
Investment product for all investors which is launched through Mutual Fund.
Investors who want to keep money safe can invest in FMP.
Only Mutual Fund companies issue FMP’s for certain period of time.

How FMP is different from Mutual Fund?
Duration Lock
Rate of Interest is fixed.

Why shouldn’t we consider FD instead of FMP?
In FMP rate of interest is more than FD.
FD’s all money is taxable. We have to pay the tax in FD.
In FMP tax is Negligible and is paid after 2 financial years.
Fixed Maturity Plan.
In FD you can withdraw anytime.
In FMP you cannot withdraw before maturity period.
FMP percentage is more than FD.
You can easily withdraw in FD before Maturity period.
Normal Investment amount is Rs.5000.
Individual will get better Rate of Interest in FMP.

Procedure of FMP
Online Option
Demat account is not mandatory for FMP and Mutual fund.
Individual should check rating before investing in FMP.
Individual should check Company profile/ Established Company.
Ratings should always be good.

Quality of portfolio, product component and Risk factor should be checked before Investing.

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