SBI Fixed Maturity Plans- How Does it Work?


Investing in SBI Fixed Maturity Plans gives you a guaranteed return on your investment.

The SBI Fixed Maturity Plan offers an attractive option for investors looking for a safe way to invest money. It allows you to lock in a rate of return on your investments for a set period of time.

The latest FMP series ended on 71. The tenor of investment usually comes at 1 to 3 years. The scheme is designed in such a way that you invest a certain fixed amount for a period of 1 to 3 years.

When it matures, the invested capital along with the post-tax returns are credited to your bank account.

Better post-tax returns with minimal interest rate risk.

The SBI Fixed Mature Plan provides a guaranteed return on your investments. This means that you will receive a certain percentage of interest on your invested capital at the end of the term. At the end of the term, the principal plus any accumulated interest is returned to you. 

The scheme is devised in such a manner that you get better returns with almost no risk of interest rate fluctuations. Annualized returns are 7 to 8%.

What are the benefits of investing in SBI Fixed Maturity Plan?

There are several benefits to investing in SBI Fixed Maturity Plans. A few benefits of investing in FMPs are:

  • FMPs invest in securities with better credit quality, as a result, the scheme has both low credit and liquidity risks.
  • The investment is for a fixed period of time. Therefore, it has the advantage of an indexation benefit, which lowers taxation on capital gains.
  • There is no buying or selling of securities under the scheme. As a result, it reduces the costs of the scheme.

What are the risks involved with this type of investment?

While fixed maturity plans offer some benefits, they also come with certain risks. One of the biggest risks is that you might not receive the returns promised by the plan. 

But FMPs are invested in debt securities and bonds, so losing money with the scheme is not expected. The bright side of the scheme is that you may get better post-tax returns than your counterpart’s normal fixed deposits.

Is this an appropriate investment option for me?

A fixed maturity plan is suitable for investors who want to invest a lump sum in one go. This type of plan offers a guaranteed return on your money. However, there are other options available to you as well. You can choose between investing in mutual funds, insurance policies, or even real estate.

The only downside of the scheme is that, since the scheme is closed-ended you may have to wait till it matures. No partial withdrawal or redemption is allowed. If you have done it for a year, you have to wait till it ends its tenure.

How does it work?

In order to understand how these plans work, let us first take a look at what a fixed maturity fund is. These are investments that promise a certain rate of return every year. They are usually invested in debt securities such as government bonds, corporate bonds, treasury bills, etc.

You may purchase the scheme online through SBI YONO and your bank’s internet banking or visit your bank and let them do it for you.


SBI Fixed Maturity Plans- FMPs are one of the best options to invest. If you are looking for better returns than the normal fixed deposit schemes then investing in FMPs makes sense. It has minimal interest rate risk and also has low credit and liquidity risks. 

It comes as New Fund Offer-NFO where you would get a week or so to purchase the scheme before it starts for its allotment to the investors. All you have to do is, wait for the NFO to announce, grab the opportunity and invest wherever you are.

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