FMP Simplified

FMP's are investment instruments that are to be bought in the month of march. Since banks invite funds for investment for a very short duration of time, say a week or even less than that, in case you are interested in investing in FMP's, keep your eyes and ears open when March starts :)

Following piece of text would give some insight to what's and how's of Fixed Maturity Plans.

Fixed maturity plans (FMPs) have become popular amongst investors mainly as a foil for uncertain interest rates. FMPs by staying invested in a portfolio of bonds/government securities till maturity offer a relatively certain return despite their market-linked nature. During periods of uncertainty, the certain return offered by FMPs assumes even more significance. While FMPs are launched with varying tenures, go for the short-term FMPs (less than a year). If the interest rate scenario appears uncertain even after the FMP matures, you can consider rolling over to the next issue (provided the fund house is offering another FMP with a similar tenure).

Risks involved in FMP's: Visit this link :- http://www.personalfn.com/detail.asp?date=3/27/2008&story=2

Compare FD with FMP :-
http://personalfn.com/detail.asp?date=4/29/2008&story=1

Happy Investing.