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FMP Vs. FD By Prof. Simply Simple

Why do FMP yields vary?. FMP yields do not normally vary by a significant marginFor the same tenure, the yields on debt instruments (with comparable credit ratings) are usually in a range, which is why FMPs of similar tenure have comparable yieldsThe difference in yields between two FMPs arises out of the risk taken on in the portfolio

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FMP Vs. FD By Prof. Simply Simple

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    1. FMP Vs. FD By Prof. Simply Simple A common feature of both FMPs (Fixed Maturity Plans) and FDs (Fixed Deposits) is that investors know in advance how much return they will earn on maturity The difference here is that while the returns on FDs are assured, returns on FMPs are indicative FMPs are actually close-ended debt funds with fixed maturity offering an indicative yield. The keyword here is indicative That means, on maturity there is a possibility of actual returns deviating from indicative returns On the other hand, returns are guaranteed by an FD and investors are assured of receiving the same on maturity (assuming there is no default in payment of principal amount and interest)

    3. Varying tax treatment

    5. What should investors do?

    6. Hope you have now understood the difference between FMP and FD In case of any query please email to hmasurkar@tataamc.com

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