SBIMF :: launching "SDFS 90 Days - 57"

Open 24th February 2012 to 27th February 2012

Fixed Maturity Plans (FMP)-key points :

· FMPs invest their corpus in debt instruments such as Commercial Papers, Certificate of Deposits, Debentures etc., which enable them to earn higher returns at times than bank FD rates .

· FMPs effectively eliminate interest rate risk by investing in instruments whose maturity coincides with the maturity of the FMP, However, an investor is exposed to credit risks depending on the portfolio of an FMP.

· Tax Efficient- Dividend distribution tax of 12.5% (plus applicable surcharge and cess) for individual/HUF /NRI investors investing in FMPs as compared to flat 30%(plus surcharge) TDS in case of NRO FDs.

· Investors willing to take a little risk for that extra return ,should invest in FMPs. Investors who are satisfied with a lower but assured return should invest in bank FDs.

The main aspects of FMP are as under :-

· 1. They are tax efficient (most important feature for HNIs since Fixed Deposit returns are subjected to 30.900% tax)

· 2. FMPs are passively managed funds; the turnover is low resulting in lower costs of transaction. This in turn enhances the returns for the investor.

· 3. The prime reason lies in investors seeking a safer alternative to equity funds, with decent returns and tax efficiency

· The SBI DEBT FUND SERIES – (FMPs) are close-ended 100% Debt Fund. The investment objective of the Fund is to provide regular income, liquidity and returns to the investors through investments in a portfolio comprising of debt instruments such as Government Securities, PSU & Corporate Bonds and Money Market Instruments maturing on or before the maturity of the scheme. The investments in this Fund would not carry any Interest rate risk as the Fund would seek to invest only in such instruments whose residual maturity matches with the maturity of the Fund.