What are The Fixed Maturity Plans (FMPs)?


Fixed Maturity Plans (FMPs) are close-ended debt mutual funds with a predefined tenure, typically ranging from a few months to a few years. They invest in fixed-income securities like bonds, government securities, and certificates of deposit that match the plan’s maturity. 

Fixed Maturity Plans aim to provide predictable returns with lower risk compared to equity funds, making them suitable for conservative investors. Since investments are locked until maturity, FMPs help shield returns from interest rate fluctuations. They also offer tax benefits on long-term capital gains due to indexation, enhancing post-tax returns for investors holding FMPs until maturity.

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