What all to look at before you invest in fixed maturity plans

While FMP offer several advantages over other fixed income products when interst rates are rising, there are still certain factors that investors should keep in mind before taking the plunge. Here are a few of them...


Time horizon: 

Please remember although Sebi rules mandate that all FMPs should be listed on the bourses, the ground reality is that there is practically nil liquidity in these instruments since there are hardly any buyer or seller in the market. So as an investor if you are investing in an FMP, be sure that if you want the money even in case of even an emergency, you are unlikely to get that back then. Instead you have to wait till the day of redemption to get the money invested in that FMP in your bank account.