FMP(Fixed Maturity Plan) vs. Bank FD(Bank Fixed Deposits)

Like thousands of other investors who prefer caution over returns, Mumbai-based Ganesh Anchan (not his real name) was largely a fixed deposit (FD) man. Whatever savings he managed, this financial accountant in a construction company would promptly squirrel them away in investments with assured returns. Anchan was only too happy to do so until he met Amar Pandit, a financial planner. Pandit showed Anchan how his high tax outgo of 30 per cent on the income generated from investments were actually eating into his returns. “All efforts to convince Anchan to start investing in equities were in vain, since he had a low risk appetite,” recalls Pandit. “So, we did the next best thing: We moved his investments from FDs to fixed maturity plans (FMPs).”

What are FMPs?

Read more on FMPs vs Bank Fds here: FMP(Fixed Maturity Plan) vs. Bank FD(Bank Fixed Deposits)