Fixed Return Options Retirement Planning Correct retirement planning has become necessary in today’s time. In this report, we are going to tell you about the fixed return options for retirement.
Fixed maturity plans (FMPs) can be a good option for retirement planning for low risk appetite investors, but it depends on the financial goals, risk appetite and financial position of the investor.
What is Fixed Maturity Plan?
Fixed Maturity Plan is also known as FMP. It is a type of debt mutual fund. Its fund money is invested in debt securities such as commercial paper and corporate bonds. It has a fixed maturity period, which usually ranges from 30 days to 5 years.
Things to keep in mind before investing in Fixed Maturity Plan
Low risk
In FMP, money is invested only in debt securities, whose maturity date is already fixed. Because of this, you get the returns at the right time. For this reason it can be included in retirement planning.
Maturity date
In FMP, the maturity date is pre-decided. For this reason, you can easily choose the plan according to your retirement.
Lack of liquidity
If you need funds in an emergency, then you will have to sell your investments before maturity and you may incur losses.
interest rate risk
Investments in FMPs are made in debt securities. If interest rates change, your returns can be negatively impacted.
Bank FD
Interest rates have increased significantly in the recent past. For this reason, banks are currently offering an average interest rate of up to 7.00 percent on FDs. In such a situation, this can also be a good option for retirement planning.
