1. The term MIP (Monthly Income Plan) is a misnomer because it may or may not give a monthly dividend.
2. So, if you are looking for a regular income from an investment, MIP may not be the right instrument.
3. It gives good returns when interest rates have peaked and stock markets are about to move up.
4. If FMPs (Fixed Maturity Plans) and FDs (Fixed Deposits) earn the same interest, the FMP yields are better after taxation because of the way the capital gain is taxed.
5. However, unlike an FD, which guarantees the capital, FMPs guarantee neither the capital nor the interest.
2. So, if you are looking for a regular income from an investment, MIP may not be the right instrument.
3. It gives good returns when interest rates have peaked and stock markets are about to move up.
4. If FMPs (Fixed Maturity Plans) and FDs (Fixed Deposits) earn the same interest, the FMP yields are better after taxation because of the way the capital gain is taxed.
5. However, unlike an FD, which guarantees the capital, FMPs guarantee neither the capital nor the interest.