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How is an Interval Fund different from a Fixed Maturity Plan? Read this article to know the key differences between Interval Funds and Fixed Maturity Plans.
An interval fund is a type of mutual fund which is not listed on the stock market or secondary exchanges. The units of an interval fund can be redeemed only during specific redemption periods.
Here are the key features of Interval Funds:
Fixed maturity plans are close-ended mutual funds; the investment can be made only during the time of a new fund offer. Fixed maturity plans primarily invest in debt instruments and offer a predictable rate of return. In addition to this, FMP’s are tax-efficient against the instability of interest rates.
Some of the underlying assets of a Fixed Maturity Plan are certificates of deposit or bonds. The tenure of these assets varies from thirty days to five years. The most commonly available tenures range from thirty days to 180 days, 370 days and 395 days.
Here are the key features of Fixed Maturity Plans:
There are no significant differences between an interval and a fixed maturity plan. An interval fund is similar to a fixed maturity plan because your investment is subject to a fixed tenure (you cannot redeem the investment before maturity). In an Interval Fund, you can redeem units at regular/specified intervals during the tenure of the fund. Unlike a Fixed Maturity Plan, you have to wait until maturity.