FMPs are close-ended debt schemes that come with short-term tenor, typically three-months to a year which invests largely in Debt and Money Market Instruments like Treasury Bills, Commercial Deposits (CDs) and Commercial Papers (CPs), etc which matures on or before the maturity date of the scheme. They benefit investors when the prevailing interest rates are high in the economy.

(Read, what is Money Market Instrument)

At present, the rate of 91-day T-bills is between 8-8.7% and Call Money Market rates are between 7-8.55%.

So, this is the good time to have an exposure to short-term fixed maturity plans if you have spare cash lying in your bank account.

DSP BlackRock Mutual Fund is coming up with DSP BlackRock FMP - Series 19 – 3M, a close-ended scheme with the duration of 3 months. The scheme will mature on February 14, 2012.

The scheme seek to generate returns and capital appreciation by investing in a portfolio of debt and money market securities. The schemes will invest only in such securities which mature on or before the date of maturity of the scheme.

Basic Details:
NFO Opens: November 9, 2011
NFO Closes: November 15, 2011
NFO Price: Rs.10 per unit
Options: Growth and Dividend Payout option
Minimum Application Amount: Rs 5,000 per application and additional of Re 1, thereafter
Exit Load: Nil
Benchmark: CRISIL Liquid Fund Index
Listing: Bombay Stock Exchange
Fund Manager: Mr. Dhawal Dalal

View: Though, this fund can provide you fair returns considering high interest rates prevailing in our economy, but it is always advisable to consult an Investment Advisor.

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