Tuesday, July 3, 2012

Fixed Maturity Plans getting more popular


The time-tested investment vehicle of Fixed Maturity Plans (FMP) is now, attracting investors due to slowdown in economy and it seems the economic depression will continue.
Investors find it a good opportunity to lock the money for particular period at prevailing interest rates as the rates are being expected to lower down. RBI will review its monetary policies on June 18 and discuss with the experts about the rate cuts.
"We now expect 25 basis points repo rate cut on 18 June," says Sonal Verma, India economist, Nomura, in her research note.

The term of maturity in FMPs vary from 90 days to one year and keep the investors safe from any interest rate risk. Infact, the spike in the interest rate offer high returns at the maturity.
Currently 15 FMPs are available in the market from fund houses like HDFC, Birla Sunlife and L&T etc.


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