Fixed Maturity Plans Gain Popularity in Depressed Economy

Fixed Maturity Plans are time-tested investment vehicle at current yield without getting exposed to any of the interest rate risk. The sharp rise in interest rates may offer good accruals to the investors. As the interest rates are expected to move down in near term, the Fixed Maturity Plans offer a good opportunity to lock your money at prevailing interest rates.

Many Mutual fund houses are showing attention towards fixed maturity plans and attracting investors who are extremely anxious to get any gains due to a depressed economy. Currently, there are 15 fixed maturity plans available in the market from the mutual fund houses like HDFC, IDFC, Birla Sunlife and L&T.

These fixed maturity plans have varying maturity periods with a minimum of 90 days and maximum of 1 year. These schemes aim to capture the short-term spike in the yields which is expected because of advanced tax payments due on June 15. The liquidity in the market is expected to be tight for the fresh issuances of government securities and certificate of deposits by banks.

Many experts and analysts are predicting one more rate cut on June 18, on which RBI will review its monetary policy.

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