How-to FMP fixed maturity

How to invest in a Fixed Maturity Plan (FMP)

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FMP is the closed-end debt cousin of FD. Pre-2023 indexation benefit made FMPs tax-attractive; post-2023 the advantage is largely lost.

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Market-risk disclaimer. Mutual fund investments are subject to market risks. Past performance is not indicative of future returns.

Step-by-step procedure

See the procedure infobox above for the six steps.

FMP vs FD vs open-end debt

AspectFMPBank FDOpen-end debt MF
Lock-inUntil maturityPenalty for earlyNone
LiquiditySecondary market (discount)PenaltyT+1 to T+3
TaxSlabSlabSlab
Yield predictabilityHighHighModerate
GuaranteeNoneDICGC Rs 5 lakhNone

See also

External references

References

  1. SEBI (Mutual Funds) Regulations, 1996.
  2. Income Tax Act, 1961, Section 50AA.
  3. Finance Act, 2023.
  4. AMFI Best Practice Guidelines.

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