FMP Review: ICICI Pru FMP Series 83 1406 days Plan D currently openICICI Pru FMP Series 83 1406 days Plan D is a fixed maturity plan (FMP) with a tenure of 1406 days or roughly 3 years and 10 months. The fund opened for subscription on 24th May 2018 and will close on 30th May 2018. An FMP usually invests in debt that has approximately the same tenure as the FMP itself. The ‘intended portfolio allocation’ of this scheme is focused on Government Securities. As per the Scheme Information Document (SID), the yield on Government Securities of 1-3 years was 6.7% to 7.57% as of 30th April 2018.

Sr No. Instrument Allocation
1. 80 – 100% in Debt, including government securities
2. 0 – 20% in Money Market Instruments
Credit Allocation
1. 100% in Government Securities

Source: SID, Pulse Labs

Taxation

FMPs are treated as debt funds. Gains in them for holding periods of less than three years are taxed as Short Term Capital Gains (STCG). They are taxed as per your slab rate (which could be as high as 30%). Gains in FMPs for longer holding periods than three years are taxed as Long Term Capital Gains (LTCG). They are taxed at 20% along with the benefit of indexation.

Indexation takes inflation into account while computing taxable gains, thereby potentially reducing the effective tax rate. Some FMPs which commence in the last few months of a financial year, mature over four rather than three financial years, giving them an additional tax advantage.You can also choose the dividend option but this will incur Dividend Distribution tax (DDT) which adds up to about 29% (including cess etc).

Key Details

Minimum Investment: Rs 5000

Tenure: 1406 days (roughly 3 years and 10 months)

Options: Growth and Dividend Payout

NFO Period: 24th May to 30th May 2018

Fund Manager: Rahul Goswami

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.