Fixed Maturity Plans (FMP's) are essentially closed ended debt schemes with a fixed Maturity. The tenure could be 30 days, 90 days, 180 or 365 days and even 3 to 5 years time frame.
Whether Exit is possible before Maturity
Though an investor is supposed to stay invested till maturity in FMPs, fund houses also list FMP on stock exchanges so, yes, investors can exit if they need money urgently.
When one exit before Maturity
However, liquidity is a problem. Though these schemes are compulsorily listed on the stock exchange, it’s not easy to exit a scheme before maturity as there are few buyers. So ensure that you are pretty certain you will not need the money for the duration of the FMP as this does not guarantee enough liquidity and attractive price.
How one can redeem before Maturity
Investor wishing to exit may do so by selling their units through stock exchange, however FMP units cannot be directly redeemed from the fund, until the maturity date of the plan.
On Maturity, how will you redeem
On maturity, units will be redeemed on the basis of the applicable NAV on the date of redemption and your investment along with the appreciation is automatically returned back to you.(means directly credited to your registered bank account in that scheme, if direct credit option is available in your bank account else redemption warrant will be issued to you).
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