What is fixed maturity plan?

[ray]

I’m trying to understand fixed maturity plans (FMPs) as an investment option. How do fixed maturity plans work, what are their key benefits and risks, and when are they suitable from a long-term financial planning perspective?

 

[Aurora]

A Fixed Maturity Plan (FMP) is a type of closed-ended debt mutual fund that invests in fixed-income securities (like bonds or CDs) with maturities matching the fund’s tenure. Investors stay invested until maturity, aiming for stable, predictable returns. It generally carries lower risk than equity funds but returns aren’t guaranteed.

 

[James Miller]

A Fixed Maturity Plan (FMP) is a closed-ended debt mutual fund with a fixed lock-in period, usually matching the maturity of the underlying bonds. It aims to provide steady returns by investing in high-quality credit instruments like commercial papers and certificates of deposit. FMPs are popular because they offer relative protection against interest rate volatility, making them a tax-efficient alternative to traditional fixed deposits.