If you have been bombarded recently with emails from various fund houses announcing several fixed maturity plans or FMPs, as they are popularly known, then you are not alone.
FD returns have gone down recently and fund houses are doing their best to offer an alternative to the ‘safe return’ seeking population.
If you have come across an FMP sales pitch, it almost always is that “it is as safe as a Bank FD”, yet, “it will give higher returns than an FD.” An easy lure for most investors since ‘safe returns’ is a primary criteria.
Let’s build a perspective on FMPs and should they become a part of your portfolio?
What is an FMP or a Fixed Maturity Plan?
If you have invested in a Bank FD before, you know that it comes in for different tenures of 1 year, 3 year, 5 year, etc.