We live in a world wherein the amount of trust one places into a fund or scheme is heavily dependent on the amount of monetary returns that it can reward you with. In such a scenario, people are increasingly likely to ditch highly risky schemes and instead look for a programme that doesn’t bleed more money than it generates each year. One such example of a fund is the fixed income scheme. Here are some things to know about them.
- They are safe
Unlike the funds trusted by people to pay back larger magnitudes of money in comparison to the investment, fixed income products work on a very different premise. The amount pledged here is fixed in magnitude and does not suffer the whims of the market and its fluctuations like the other funds out there.
- They are user-friendly
Due to the optimum balance that they maintain between input, yield and the amount of liquidity (or cash) required, fixed income plans are perhaps the most suitable for those investors who are adjudged to have a very risk-averse profile, meaning that they ideally prefer to avoid the risk of losing money at all. Moreover, these plans allow for a regular and quantifiable return which is stable every time, thus appeasing those who are not too fond of unpredictable winnings (or losses, for that matter)
- The working of a FIP
The plan intends to yield returns to the investor from a differing mix of debt as well as stock-related options wherein the money is invested. The positive is that one does not have to worry about market forces, interest rates or even larger investors throwing a spanner into their plans for growth, as the increase in returns here is constrained, regulated and incremental in nature.
- Where to find one?
Most financial institutions will offer a variety of such plans. It is important to read the fine print to keep oneself aware of all obligations. Moreover, one should research thoroughly before committing to such a plan.