Why mutual funds are better than FDs

Do you find mutual funds attractive but don't invest in them due to the risk factor? Its time you learn that mutual funds are a lucrative investment, ensure higher returns, better tax benefits and carry minimalistic risk. In this article we will explain why Fixed Maturity Plans issued by mutual funds are much more profitable than fixed deposits offered by banks.

The fact is that according to the SEBI rules, mutual funds are not allowed to assure returns. The yield is indicated and not assured. However, for all practical purposes, the indicated yield is almost exactly what the investor gets at the time of maturity.

What is an FMP?
FMP stands for Fixed Maturity Plan. These are essentially close-ended income schemes with a fixed maturity date ie that run for a fixed period of time. This period could range from one month to as long as two-years or more. When the fixed period comes to an end, the scheme matures, and your money is paid back to you.