Capital Protection: FMPs have less risk of capital loss due to their investment in debt and money market instruments.

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

Low credit & liquidity risk: 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.

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

Portfolio balancing: 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 utilizing his gains/surplus money in an effective way.

Double indexation benefit: FMPs offer the benefit of indexation which helps to lower capital gains and hence lower the tax.