10 Best Fixed Maturity Plans (FMP) to Invest in April 2023
What is Fixed Maturity Plan (FMP)?
A Fixed Maturity Plan (FMP) is a close-ended debt fund with a limited investment window and a fixed lock-in period. You can invest in such plans only when NFO (New Fund Offer) is made by the AMC (Asset Management Company) via subscription requests. Fixed maturity plans invest in certificate deposits (CD), corporate bonds, commercial papers (CP), money market instruments, non-convertible debentures (NCD) and government-issued securities. Moreover, these investments are made in high-rated and extremely reputed companies. The maturity of these fixed deposits depend upon the tenure of the scheme. In this blog, we will discuss some of the best fixed maturity plans in India in 2023.
10 Best Fixed Maturity Plans in India in 2023
The table below lists the 10 best fixed maturity plans 2023:
| Fixed Maturity Plans | Features |
| IDFC Government Securities Fund Investment Plan – Direct Plan – Growth | NAV:₹30.99 AUM:₹1402.81 Crore Expense Ratio: 0.62% |
| Nippon India Gilt Securities Fund – Direct Plan – Growth | NAV:₹35.11 AUM:₹1147.33 Crore Expense Ratio: 0.63% |
| ICICI Prudential Constant Maturity Gilt Fund – Direct Plan – Growth | NAV:₹20.42 AUM:₹430.79 Crore Expense Ratio: 0.23% |
| PGIM India Short Maturity Fund – Direct Plan – Growth | NAV:₹41.08 AUM:₹24.4 Crore Expense Ratio: 0.5% |
| SBI Magnum Constant Maturity Fund – Direct Plan – Growth | NAV:₹53.72 AUM:₹854.06 Crore Expense Ratio: 0.33% |
| UTI Fixed Term Income Fund – Series XXXV – Plan II – (1223 Days) – Direct Plan – Growth | NAV:₹10.06 AUM:₹154.01 Crore Expense Ratio: N/A |
| Nippon India Interval Fund – Quarterly – Series 3 – Direct Plan – Growth | NAV:₹18.18 AUM:₹135.31 Crore Expense Ratio: N/A |
| Nippon India Interval Fund – Monthly – Series 2 – Direct Plan – Growth | NAV:₹29.28 AUM:₹4.16 Crore Expense Ratio: 0.32% |
| Nippon India Interval Fund – Monthly – Series 1 – Direct Plan – Growth | NAV:₹29.33 AUM:₹4.62 Crore Expense Ratio: 0.03% |
| Nippon India Interval Fund – Quarterly – Series 1 – Direct Plan – Growth | NAV:₹29.81 AUM:₹3.75 Crore Expense Ratio: N/A |
Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully.
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10 Best Fixed Maturity Plans (FMP) 2023 – Detailed Overview
The details of the best maturity plans 2023 are given below:
1. IDFC Government Securities Fund Investment Plan – Direct Plan – Growth
This scheme invests in government securities across various maturities. CRISIL Dynamic Gilt Index is its underlying index. Since inception, this fixed maturity plan has delivered 8.89% average annualised returns.
- Fund Size: ₹1,418.48 crore
- NAV: ₹31.01
- Expense Ratio: 0.62%
- Risk: Low to moderate risk
- Minimum Investment: SIP ₹1000, Lump Sum ₹5000
- Type of Fund: Gilt fund
- Annualised 1-Year Return: 3.07%
- Annualised 3-Year Return: 5.66%
- Annualised 5-Year Return: 8.42%
2. Nippon India Gilt Securities Fund – Direct Plan – Growth
Nippon India Gilt Securities Fund is one of the best FMP plans and invests in securities backed by the Central and State Governments. Its primary objective is to deliver maximum credit risk-free returns. The scheme has generated 9.26% average annualised returns since its inception.
- Fund Size: ₹1,143.68 crore
- NAV: ₹35.14
- Expense Ratio: 0.63%
- Risk: Moderate risk
- Minimum Investment: SIP ₹100, Lump Sum ₹5000
- Type of Fund: Gilt fund
- Annualised 1-Year Return: 4.26%
- Annualised 3-Year Return: 5.43%
- Annualised 5-Year Return: 8.27%
3. ICICI Prudential Constant Maturity Gilt Fund – Direct Plan – Growth
This mutual fund comprises a portfolio of government securities with a Macaulay duration of 10 years. The minimum amount required for both additional and SIP investment is ₹1,000. This scheme was launched on September 12, 2014, and has delivered average annualised returns of 8.89% since then.
- Fund Size: ₹403.03 crore
- NAV: ₹20.43
- Expense Ratio: 0.23%
- Risk: Moderate risk
- Minimum Investment: SIP ₹1000, Lump Sum ₹5000
- Type of Fund: Gilt fund with a 10-year constant duration
- Annualised 1-Year Return: 3.59%
- Annualised 3-Year Return: 5.43%
- Annualised 5-Year Return: 8.19%
4. PGIM India Short Maturity Fund – Direct Plan – Growth
This short-duration FMP comprises a portfolio of money-market and short to medium-term debt securities. It aims to deliver steady returns at low to moderate market risk. ₹1,000 is the minimum amount required for both additional and SIP investment. Since the PGIM India Short Maturity Fund has generated 7.09% in average annualised returns.
- Fund Size: ₹24.9 crore
- NAV: ₹41.07
- Expense Ratio: 0.5%
- Risk: Low to moderate risk
- Minimum Investment: SIP ₹1000, Lump Sum ₹5000
- Type of Fund: Short duration fund
- Annualised 1-Year Return: 4.47%
- Annualised 3-Year Return: 5.35%
- Annualised 5-Year Return: 4.60%
5. SBI Magnum Constant Maturity Fund – Direct Plan – Growth
This gilt fund invests in government securities and ensures that the average maturity of its investment portfolio remains around 10 years. SBI Magnum Constant Maturity Fund has delivered an average annualised return of 8.91%.
- Fund Size: ₹833.52 crore
- NAV: ₹53.77
- Expense Ratio: 0.33%
- Risk: Moderate risk
- Minimum Investment: SIP ₹500, Lump Sum ₹5000
- Type of Fund: Gilt fund with a 10-year constant duration
- Annualised 1-Year Return: 3.84%
- Annualised 3-Year Return: 4.88%
- Annualised 5-Year Return: 7.73%
6. UTI Fixed Term Income Fund – Series XXXV – Plan II – (1223 Days) – Direct Plan – Growth
This fixed maturity plan has generated average annualised returns of 5.73% since then. This scheme is one of the best fixed maturity plans and seeks to deliver returns by investing in fixed-income securities that have the same maturity date as that of the scheme. More details are as follows:
- Fund Size: ₹153.45 crore
- NAV: ₹10.06
- Expense Ratio: NA
- Risk: Moderate risk
- Minimum Investment: SIP (N/A), Lump Sum ₹5000
- Type of Fund: Fixed Maturity Plans – Debt
- Annualised 1-Year Return: NA
- Annualised 3-Year Return: NA
- Annualised 5-Year Return: NA
7. Nippon India Interval Fund – Quarterly – Series 3 – Direct Plan – Growth
Nippon India Interval Fund has delivered an average annualised return of 1.43%. The scheme invests in money market and debt securities and aims to generate consistent returns at moderately high risk. While the minimum amount required for additional investment is ₹1,000, the minimum SIP investment is ₹100.
- Fund Size: ₹134.55 crore
- NAV: ₹18.16
- Expense Ratio: NA
- Risk: Moderately high risk
- Minimum Investment: SIP ₹100, Lump Sum ₹5000
- Type of Fund: Interval plan
- Annualised 1-Year Return: 5.63%
- Annualised 3-Year Return: 3.91%
- Annualised 5-Year Return: 5.15%
8. Nippon India Interval Fund – Monthly – Series 2 – Direct Plan – Growth
The main objective of this mutual fund is to generate regular returns and build wealth. The scheme invests in government securities, fixed-income and debt securities that mature at the same time as the fund. This scheme offered by Nippon India Mutual Fund was launched on March 1, 2013. Since its launch, it has delivered an average annualised return of 6.51%.
- Fund Size: ₹4.14 crore
- NAV: ₹29.25
- Expense Ratio: 0.32%
- Risk: Low risk
- Minimum Investment: SIP ₹100, Lump Sum ₹5000
- Type of Fund: Interval plan
- Annualised 1-Year Return: 5.04%
- Annualised 3-Year Return: 3.83%
- Annualised 5-Year Return: 5.05%
9. Nippon India Interval Fund – Monthly – Series 1 – Direct Plan – Growth
This scheme’s investment portfolio comprises fixed income, debt and government securities through which the scheme aims to deliver regular and consistent returns apart from capital growth. Since its inception, this investment option has generated average annualised returns of 6.5%.
- Fund Size: ₹4.6 crore
- NAV: ₹29.31
- Expense Ratio: 0.03%
- Risk: Low risk
- Minimum Investment: SIP ₹100, Lump Sum ₹5000
- Type of Fund: Interval plan
- Annualised 1-Year Return: 5.52%
- Annualised 3-Year Return: 3.99%
- Annualised 5-Year Return: 5.11%
10. Nippon India Interval Fund – Quarterly – Series 1 – Direct Plan – Growth
This scheme invests in fixed-income and government securities maturing at the same time as that of the fund. This interval plan has its asset allocation designed to focus on growing wealth and generate consistent returns at low risks. Since its launch the fund has delivered an average annualised return of 6.34%.
- Fund Size: ₹4.44 crore
- NAV: ₹29.78
- Expense Ratio: NA
- Risk: Low risk
- Minimum Investment: ₹5,000
- Type of Fund: Interval plan
- Annualised 1-Year Return: 5.51%
- Annualised 3-Year Return: 3.65%
- Annualised 5-Year Return: 5.02%
*Data of NAV and Returns valid as of February 7, 2023
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Features of Best Fixed Maturity Plans
An FMP comes with the following features:
1. Lock-In Period
Fixed maturity plans usually have a lock-in period of three years where the principal amount is locked for a specific period. You cannot redeem the returns or even make partial withdrawals during this period.
2. Portfolio
Returns from such plans are generated through debt tools like non-convertible debentures, corporate and government bonds etc. Fund managers create such a portfolio so that stock market volatility has a lesser impact on these funds.
3. Close-Ended Scheme
An FMP is a close-ended scheme. You can invest in such schemes by simply subscribing to a new fund offer from an AMC.
4. Quality Assets
Fixed maturity plans have quality debt instruments offering the best returns. Primarily, portfolio managers select assets issued by top companies to build a corpus. Such securities are pretty safe as they offer returns at very low risk.
Benefits of a Fixed Maturity Plan
1. Low Risk
These plans offer low-risk returns as they target debt securities of top firms in India.
2. Stable
They are also quite stable as they get relatively less impacted by stock market fluctuations.
3. Fixed Returns
You will know the fixed expected returns beforehand as such schemes offer negligible deviations from the ascertained amount.
Who Should Invest in FMPs?
Investors who are seeking a higher return than FD (Fixed Deposit) but do not have an appetite for riskier Equities, then FMPs or fixed maturity plans are ideal options. Compared to equity funds, such schemes offer returns at a lower risk. Such plans are also an excellent way to diversify the investment portfolio.
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How to Invest in Fixed Maturity Plans?
If you wish to invest in the best fixed maturity plans, you can avail the services of a financial advisor or expert fund managers who will be able to guide you to choose an appropriate scheme.
Given below is the step-by-step guide to investing in one of the best fixed maturity plans in India:
- Step 1: Analyse your investment objective and risk-taking ability.
- Step 2: Research the available options of fixed maturity plans and make a list of the suitable ones.
- Step 3: Compare all the schemes and choose the one most aligned with your risk profile and financial goals.
- Step 4: Visit the official website of the fund house offering the scheme and register. Place your cursor on the ‘mutual fund’ section and click on it.
- Step 5: Click on your preferred mutual fund and proceed to invest in it.
- Step 6: Provide the required details to complete the e-KYC procedure. If you keep your PAN card, Aadhaar card and bank account details at hand, it will prove to be helpful.
- Step 7: Confirm the submitted details and transfer the initial investment amount to start investing in your chosen fixed maturity plan.
Risks Related to Fixed Maturity Plans
Fixed maturity plans come with the following risks:
1. Market Risk
This happens because of fluctuations in the fund’s NAV (Net Asset Value) due to price movements of basic securities. Further, many micro and macro-economic factors also contribute to market risks.
2. Credit Risk
This type of risk factor is related to the collapse of the fund’s NAV due to changes in the credit ratings of the basic funds. Moreover, the security issuer does not oblige to the agreement to make coupon payments and return the invested principal at the time of maturity.
3. Liquidity Risk
In this case, the fund manager will not be able to sell the underlying assets without taking any important hit.
Factors to Consider About FMPs Before Investing
- Check the past performance of a particular security. The return trends are crucial before you choose.
- Your investment objective is critical before investing in such financial schemes.
- You should also pick an appropriate maturity period of an FMP as the funds will stay locked in for that period.
- Check the investment portfolio to make sure that the debt instruments carry minimal risk.
- Pick an FMP with a low expense ratio to save more money in the long run.
Taxation on Fixed Maturity Plans
Fixed maturity plans are taxed just like any other debt mutual fund and the tax rate depends on the holding period of the investment. Capital gains from FMPs are classified as either short term or long term and taxed accordingly.
Take a look at its details below:
1. Short Term Capital Gains (STCGs)
If you redeem your investments within 36 months, then the capital gains will be classified as STCGs which will be taxed according to your income tax slab rate.
2. Long Term Capital Gains (LTCGs)
However, if the holding period of your investment exceeds 36 months, then LTCGs will be subject to 20% tax with the benefit of indexation. It enables investors to receive the benefit of real growth in their investment portfolio as the overall increase in the price level of goods and services in the country is taken into account.
Final Word
Financial experts have stated that the best fixed maturity plans offer decent returns over a specific period of time without getting impacted much by the volatile stock market. It is an important way to diversify your investment portfolio. If you are looking for a scheme with low-risk returns, then you may consider FMPs.
If you want an investment with better yields than FMPs, you can choose something like the Navi Nifty 50 Index Fund. Visit the Navi Mutual Fund and start investing today!
*Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
FAQs
FMPs are an ideal investment if you do not have an appetite for risks. Such schemes are least affected by stock market volatility. Also, these schemes offer good returns for a specific lock-in period. Hence, you can consider them safe.
As these plans offer low liquidity, you can only go for such schemes if you wish to remain invested until their maturity expires.
The fixed maturity period is the specific period when your FMP matures.
Yes, besides a direct plan, DFC Government Securities Fund IP offers a regular growth plan as well.
ICICI Prudential Constant Maturity Gilt Fund offers a 1-year return of 5.70% as of the latest records.
The liquidity of fixed maturity plans is lower than open-ended mutual funds schemes.
The NAV (Net Asset Value) of funds reflects a fixed maturity plan’s value. The NAV changes every day due to changes in the economy. As a result, FMPs are riskier than FDs but are ideal for investors who are looking for higher returns. Moreover, the liquidity is restricted so the investor has to fix his or her money for the NFO tenure. Fixed deposits do not have fixed liquidity but the returns are lower than FMPs. FMPs are ideal for investors who are fine with the fluctuating NAVs and want higher returns. For more risk-averse investors fixed deposits are perfect.
Fixed maturity plans are described as close-ended debt mutual funds which usually invest in fixed-income instruments and have a pre-defined maturity date. Its maturity period is aligned with the maturities of underlying securities. The tenure of the best fixed maturity plans can range from 30 days to 5 years.
Listed below are some of the best fixed maturity plans in India:
1. IDFC Government Securities Fund Investment Plan – Direct Plan – Growth
2. Nippon India Gilt Securities Fund – Direct Plan – Growth
3. ICICI Prudential Constant Maturity Gilt Fund – Direct Plan – Growth
4. PGIM India Short Maturity Fund – Direct Plan – Growth
5. SBI Magnum Constant Maturity Fund – Direct Plan – Growth
The answer to this varies from one investor to another. Many experts suggest analysing your investment goals and risk profile before zeroing in on one investment option. People who don’t want any uncertainties regarding their investments, wish to benefit from liquidity and want guaranteed returns should opt for fixed deposits at banks. But if you wish for slightly higher returns and are willing to take some risks for it, fixed maturity plans are ideal.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
