FMP (Fixed Maturity Plan) — Mutual Fund Term Explained

A closed-end debt fund with a fixed maturity date. Invests in bonds that mature around the same time. Gives relatively predictable returns.

Fixed Maturity Plans (FMPs) are closed-end debt mutual funds that invest in bonds with maturities aligned to the FMP's tenure (typically 1-3 years). Since bonds are held to maturity, reinvestment and interest rate risks are minimised.

FMPs are not redeemable before maturity — they can be traded on exchanges but liquidity is typically poor.

Related terms

• Debt Fund — A mutual fund investing in fixed income securities — bonds, G-Secs, commercial paper. Lower risk than equity but also lower returns.
• Credit Risk — The risk that a bond issuer defaults or is downgraded, causing the fund's NAV to fall sharply. Higher-yield bonds carry more credit risk.

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