What is an FMP?

Mutual funds offer Fixed Maturity Plans.

Two features make them distinct from other fund schemes:

1. Tenure
FMPs have a fixed maturity date. It could be more than 3 years and above.
At the end of this period, the scheme matures, just like a fixed deposit.

2. Investments
FMPs invest in fixed income instruments, like bonds, government securities, money market instruments (very short-term fixed return investments), to name a few.