Is it not better to invest in an open-end income fund than putting the money in Fixed Maturity Plan (FMP)? In FMPs the money is locked for a fixed period and the return is almost the same.
-DP Singh
It depends on which kind of debt fund. I think that some FMPs are able to deliver you little more return. Also, if you want predictable returns and if you don't have a need for liquidity, then FMPs are the way to go. But even if there is a small chance that you are likely to need the money, then don't go for an FMP.
Short-term bond fund, ultra short-term bond fund or liquid fund may not deliver as much return as FMP in a three-year period.
This article was originally published on October 04, 2018.
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