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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 : HDFC Fixed Maturity Plan Series IX
Scheme Tenure : 20 Months
Min App. : Rs.5000
Benchmark Index : Crisil Short Term Bond Fund Index
Entry Load : Nil
Exit Load : 2% if units are redeemed/switched out before maturity date.
Options : Growth & Dividend Option
Type : Quarterly & Normal Dividend Option with Payout facility only.
Indicative Yield : Retail Plan = 10.5%
NFO Period : 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


Bank F.D. Retail Plan
With Indexation Without Indexation
Investment amount (Rs) 10000 10000 10000
Assumed net yield (p.a.) 10% 10.50% 10.50%
Tenor (months) 20 20 20
Amount at Maturity (Rs) 11721.62 11810.56 11810.56
Indexation Rate N.A. 5% N.A.
Interest/LTCG 1721.62 1810.56 1810.56
Indexed Cost of Acquisition N.A. 11025 N.A.
Indexed Gain/Loss N.A. 785.56 1810.56
Tax Rate 33.99% 22.66% 11.33%
Tax on FD/Capital Gain on MF 585.18 178.01 205.14
Post Tax Income 1136.44 1632.55 1605.42
Post Tax Yield (Annualised) 6.67% 9.50% 9.34%

Clear Advantage of Investing


in FMP over Bank F.D.

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