Sucheta Dalal on FMPs
There has been some debate here (posts/comments) on fixed maturity plans (FMPs) and how they stack up against fixed deposits (FDs). Here’s a recent essay by Sucheta Dalal - A crackdown on lazy investing - that offers further clarifications:
The 13-month FMP offering with double indexation benefits indeed offer a smart way to earn double-digit returns on a post-tax basis. But it works best for investors who are able to cut through the media hype and pick the correct FMP scheme, since returns across schemes are not uniform, nor definite like those of taxable FDs.
In a rising fixed return scenario, these regulations will certainly prevent lazy and complacent investing by fund managers and mutual fund schemes, which earn fat fees and bonuses for their investment expertise.
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