Presenting
HDFC Fixed Maturity Plan Series IX – 20 Month Plan
Fixed Maturity Plan (FMP) – a closed ended Income Scheme - is similar to Bank Fixed Deposit. Just as Bank F.D., FMP also comes with fixed maturity like 3 months, 6 months, 365 days, 390 days and so on. FMP offers indicative return but a major advantage of FMP is it is more tax efficient than Bank F.D. This is a safe investment avenue compared to Equity as 100% investment is made in debt securities without any exposure to equities. As securities are held till maturity, it does not carry any interest rate risk and investment is made in safe instruments with AAA or AA+ credit ratings. FMP can be considered for debt component of investor's portfolio. Particularly in present market scenario where inflation is at very high level and investors are worried lot about their investment & investment avenues. Traditional debt avenues (Bank F.D) are not serving purpose of investment as after considering tax and inflation impact, investor makes very less money. On this background, Fixed Maturity Plan serves better purpose as it proves more tax efficient to investor as it is a mutual fund product and attracts favorable tax treatment compared to Bank F.D. Presenting HDFC Fixed Maturity Plan – Series IX Key Features: Scheme Name Scheme Tenure Min App. Benchmark Index Entry Load Exit Load Options Type Indicative Yield NFO Period : : : : : : : : : : HDFC Fixed Maturity Plan Series IX 20 Months Rs.5000 Crisil Short Term Bond Fund Index Nil 2% if units are redeemed/switched out before maturity date. Growth & Dividend Option Quarterly & Normal Dividend Option with Payout facility only. Retail Plan = 10.5% 7th August, 2008 to 27th August, 2008
Comparison Analysis Between Bank F.D and FMP and why F.M.P works better than F.D. Fixed Maturity Plan - 20 Month FMP Retail Plan With Indexation Without Indexation 10000 10.50% 20 11810.56 5% 1810.56 11025 785.56 22.66% 178.01 1632.55 9.50% 10000 10.50% 20 11810.56 N.A. 1810.56 N.A. 1810.56 11.33% 205.14 1605.42 9.34%
Bank F.D. Investment amount (Rs) Assumed net yield (p.a.) Tenor (months) Amount at Maturity (Rs) Indexation Rate Interest/LTCG Indexed Cost of Acquisition Indexed Gain/Loss Tax Rate Tax on FD/Capital Gain on MF Post Tax Income Post Tax Yield (Annualised) 10000 10% 20 11721.62 N.A. 1721.62 N.A. N.A. 33.99% 585.18 1136.44 6.67%
Clear Advantage of Investing in FMP over Bank F.D.