Mutual Funds

Mutual Funds are professionally managed investment funds that pools money from various investors to invest in securities. These investors may be retail or institutional in nature. Mutual Funds Investments for NRIs helps in long term financial planning. There are a number of features and benefits for NRIs Mutual Funds. You can also enjoy diverse benefits at a low cost. For more details about Mutual Funds for NRIs please go through the list below.

Axis Bank offers Fixed Maturity Plan which is basically mutual fund schemes which have pre-specified tenure. This tenure could be from anywhere between one month to three years. It is perhaps the ideal kind of maturity plan to invest in – from personal to professional investors. There are a number of benefits of Fixed Maturity Plans which include investment strategy, closed-ended funds, low cost and tax benefits. We have listed the benefits provided by investing in a fixed maturity plan below. If you have further queries, please feel free to get in touch with an Axis Bank relationship manager.

Understanding Fixed Maturity Plans

Fixed Maturity Plans are mutual funds schemes with a pre-specified tenure. The basic objective of FMPs is to generate steady returns over a fixed period, thus immunising investors against market fluctuations.
FMP is an ideal product for all types of investors seeking to provide benefit across different parameters such as different maturities, minimum risk and tax efficient better returns.

Features and benefits of Fixed Maturity Plans

The tenure can be of different maturities, from one month to three years. One can invest in the relevant plan depending upon his investment horizon and the requirement of cash flow.

FMPs invest in fixed income instruments, like certificate of deposits (CD), commercial papers (CP), money market instruments, corporate bonds; debentures of reputed companies or in securities issued by Government of India and fixed deposits.

One can enter an FMP when they are launched and exit them when their pre-stated term is over.

Fixed Maturity Plans have less risk of capital loss due to their investment in debt and money market instruments.

FMPs are least exposed to interest rate risk as the fund holds the instruments till maturity getting a fixed rate of return.

They primarily invest in AAA, P1+ or such kind of good rated credit instruments with maturity profile of the securities in line with the maturity of the plan so there is also low credit risk with minimal liquidity risk involved.

Since the instrument is held till maturity, there is a cost saving in respect of buying and selling of instruments.

FMP's score over fixed deposits because of their tax efficiencies in the long term. When you put money in a fixed deposit, the interest gets added to your income. In FMPs longer than 3 year, the taxation on all your capital gains is merely 20 per cent with indexation benefit. Indexation helps to lower capital gains and hence lower the tax.

FMP not only suits a Fixed Income Investor but also complements the portfolio of Equity Oriented Investors. Equity investor can route his gains and invest in this product thereby utilising his gains/surplus money in an effective way.

NRI Easy Guide

NRI Easy Guide