Bank fixed deposits are the preferred choice of many investors who want assured returns on their investment. Fixed maturity plans or FMPs, which are closed-ended debt mutual fund schemes, can also be a part of your fixed-income portfolio, especially in the current high interest rate environment, say financial planners. But returns from FMPs are not guaranteed. In recent months, there has been a flurry of launches of fixed maturity plans (FMPs) from mutual fund houses.
The reason: a rising interest rate environment, where 10-year benchmark bond yields are again rising towards the 8% mark. Investors who want to lock in their money at attractive yields prevailing at a given time can consider FMPs, say financial planners.