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A debt fund that is almost a fixed deposit

FMPs invest in instruments with matching maturity. For example, a three-year FMP would invest in papers with a three-year maturity

I want to invest about ₹5 lakh for five years in a debt fund. I am not putting the money a Fixed Deposit (FD) because I want to avoid paying higher tax. I am in the 30 per cent tax bracket. Which category of debt funds are the closest an FD? Can you suggest two or three schemes?
- Prakash

Fixed Maturity Plans (FMPs) are the closest to fixed deposits. FMPs invest in instruments with matching maturity. For example, a three-year FMP would invest in papers that would mature in three years. This ensures that the plan can deliver predictable returns without any volatility. You can check this link for FMPs that are currently open for subscription. Choose a scheme that matches your investment horizon. Please note that though FMPs are listed on exchanges, it may not be easy to get out of them prematurely because they are not traded heavily.

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