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Why ELSS Over Other Tax Saving Investments

Updated on December 5, 2019 , 148 views

ELSS funds also known as Equity Linked Savings Scheme is an equity-diversified tax saving Mutual Fund that majorly invests its assets in equities or equity-linked instruments like stock markets. The ELSS Mutual Funds offer market-linked returns, which are volatile and are dependent on the market conditions. However, financial advisors suggest Investing in ELSS funds for a long duration, as these ELSS Mutual funds generate best returns when invested for a longer duration. In the recent reports, it was seen that ELSS funds generated around 20%-30% returns when invested for 3 years, which is much more than the returns generated by other Mutual Funds.

ELSS

Comparison Of ELSS & Other Tax Saving Investment Options

The comparison of ELSS and other tax saving is based on parameters like tenure, returns, eligibility for deduction under 80c, etc.

Let's have a look:

Parameter PPF NSC FD ELSS
Tenure 15 years 6 years 5 Years 3 years
Returns 7.60 % (Compounded Annually) 7.60 % (Compounded Annually) 7.00 - 8.00 % (Compounded Annually) No Assured Divividend / Return as it market linked
Min. Investment Rs. 500 Rs. 100 Rs. 1000 Rs. 500
Max. Investment Rs. 1.5 Lakhs No Upper Limit No Upper Limit No Upper Limit
Amount Eligible for Deduction under 80c Rs. 1.5 Lakhs Rs. 1.5 Lakhs Rs. 1.5 Lakhs Rs. 1.5 Lakhs
Taxation for Interest/return Tax-Free Interest Taxable Interest Taxable Gains up to Rs 1 lakh are free of tax. Tax at 10% applies to gains above Rs 1 lakh
Safety/Ratings Safe Safe Safe Risk

Top 5 ELSS Funds To Invest In 2019

Below is the list of Fund having Net Assets/AUM between 100 - 200 Crores.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2018 (%)
Principal Tax Savings Fund Growth ₹204.49
↓ -1.97
₹4017.4-2.74.310.77.8-9.2
BOI AXA Tax Advantage Fund Growth ₹54.27
↓ -0.29
₹25511.25.316.1138-16.3
BNP Paribas Long Term Equity Fund (ELSS) Growth ₹40.538
↓ -0.24
₹47893.815.912.47.8-9.3
Kotak Tax Saver Scheme Growth ₹45.975
↓ -0.26
₹98710.31.413.212.39-3.8
Invesco India Tax Plan Growth ₹52.83
↓ -0.28
₹96210.12.810.6139.4-1.3
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 6 Dec 19

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1. Principal Tax Savings Fund

To build a high quality growth-oriented portfolio to provide long-term capital gains to the investors, the scheme aims at providing returns through capital appreciation.

Principal Tax Savings Fund is a Equity - ELSS fund was launched on 31 Mar 96. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 15.6% since its launch.  Ranked 8 in ELSS category.  Return for 2018 was -9.2% , 2017 was 48.8% and 2016 was 6.2% .

Below is the key information for Principal Tax Savings Fund

Principal Tax Savings Fund
Growth
Launch Date 31 Mar 96
NAV (06 Dec 19) ₹204.49 ↓ -1.97   (-0.95 %)
Net Assets (Cr) ₹401 on 31 Oct 19
Category Equity - ELSS
AMC Principal Pnb Asset Mgmt. Co. Priv. Ltd.
Rating
Risk Moderately High
Expense Ratio 2.61
Sharpe Ratio 0.09
Information Ratio -0.67
Alpha Ratio -7.89
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Nov 14₹10,000
30 Nov 15₹10,142
30 Nov 16₹10,924
30 Nov 17₹15,477
30 Nov 18₹14,390
30 Nov 19₹14,806

Principal Tax Savings Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹367,070.
Net Profit of ₹67,070
Invest Now

Returns for Principal Tax Savings Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Dec 19

DurationReturns
1 Month -0.1%
3 Month 7.4%
6 Month -2.7%
1 Year 4.3%
3 Year 10.7%
5 Year 7.8%
10 Year
15 Year
Since launch 15.6%
Historical performance (Yearly) on absolute basis
YearReturns
2018 -9.2%
2017 48.8%
2016 6.2%
2015 2.7%
2014 49.4%
2013 8.5%
2012 46.5%
2011 -30.4%
2010 15%
2009 64.7%
Fund Manager information for Principal Tax Savings Fund
NameSinceTenure
Sudhir Kedia29 Oct 190.01 Yr.

Data below for Principal Tax Savings Fund as on 31 Oct 19

Equity Sector Allocation
SectorValue
Financial Services33.23%
Consumer Defensive12.13%
Basic Materials10.91%
Technology9.26%
Industrials7.21%
Energy6.92%
Utility6.25%
Health Care5.09%
Consumer Cyclical3.62%
Communication Services2.43%
Asset Allocation
Asset ClassValue
Cash2.88%
Equity97.12%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 09 | HDFCBANK
8%₹31 Cr255,638
↑ 72,970
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK
6%₹25 Cr543,413
↑ 34,270
Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 08 | RELIANCE
5%₹20 Cr134,452
State Bank of India (Financial Services)
Equity, Since 30 Apr 05 | SBIN
4%₹15 Cr479,851
Infosys Ltd (Technology)
Equity, Since 31 Jan 09 | INFY
4%₹15 Cr215,954
↑ 79,360
ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC
4%₹14 Cr553,436
↑ 98,040
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | KOTAKBANK
4%₹14 Cr89,915
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 14 | TCS
4%₹14 Cr61,940
Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 13 | LT
3%₹14 Cr94,862
↑ 17,600
Treps 01-Nov-2019
CBLO/Reverse Repo | -
3%₹12 Cr

2. BOI AXA Tax Advantage Fund

The Scheme seeks to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities across all market capitalisations. The Scheme is in the nature of diversified multi-cap fund. The Scheme is not providing any assured or guaranteed returns.(There can be no assurance that the investment objectives of the Scheme will be realized.)

BOI AXA Tax Advantage Fund is a Equity - ELSS fund was launched on 25 Feb 09. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 17% since its launch.  Ranked 13 in ELSS category.  Return for 2018 was -16.3% , 2017 was 57.7% and 2016 was -1.2% .

Below is the key information for BOI AXA Tax Advantage Fund

BOI AXA Tax Advantage Fund
Growth
Launch Date 25 Feb 09
NAV (06 Dec 19) ₹54.27 ↓ -0.29   (-0.53 %)
Net Assets (Cr) ₹255 on 31 Oct 19
Category Equity - ELSS
AMC BOI AXA Investment Mngrs Private Ltd
Rating
Risk Moderately High
Expense Ratio 3.02
Sharpe Ratio 0.92
Information Ratio -0.13
Alpha Ratio 3.76
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Nov 14₹10,000
30 Nov 15₹10,194
30 Nov 16₹10,437
30 Nov 17₹15,187
30 Nov 18₹13,122
30 Nov 19₹14,878

BOI AXA Tax Advantage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹376,357.
Net Profit of ₹76,357
Invest Now

Returns for BOI AXA Tax Advantage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Dec 19

DurationReturns
1 Month 0.4%
3 Month 11.2%
6 Month 5.3%
1 Year 16.1%
3 Year 13%
5 Year 8%
10 Year
15 Year
Since launch 17%
Historical performance (Yearly) on absolute basis
YearReturns
2018 -16.3%
2017 57.7%
2016 -1.2%
2015 2.1%
2014 44%
2013 9.1%
2012 24.8%
2011 -24.1%
2010 5.9%
2009
Fund Manager information for BOI AXA Tax Advantage Fund
NameSinceTenure
Aakash Manghani15 Jul 190 Yr.

Data below for BOI AXA Tax Advantage Fund as on 31 Oct 19

Equity Sector Allocation
SectorValue
Financial Services37.63%
Basic Materials13.43%
Industrials11.41%
Consumer Cyclical9.24%
Technology5.94%
Health Care5.78%
Consumer Defensive5.22%
Energy3.88%
Utility1.12%
Communication Services0.84%
Real Estate0.7%
Asset Allocation
Asset ClassValue
Cash4.8%
Equity95.19%
Debt0.01%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Bajaj Finance Ltd (Financial Services)
Equity, Since 31 May 18 | 500034
7%₹17 Cr43,199
↑ 1,199
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Dec 10 | HDFCBANK
6%₹16 Cr131,179
↑ 5,031
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 18 | ICICIBANK
6%₹15 Cr326,315
Cblo
CBLO | -
5%₹12 Cr
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 30 Sep 18 | KOTAKBANK
4%₹11 Cr67,709
Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 18 | RELIANCE
4%₹10 Cr67,612
↑ 16,583
PI Industries Ltd (Basic Materials)
Equity, Since 30 Nov 18 | PIIND
3%₹7 Cr52,327
↑ 9,240
Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 18 | 532215
3%₹7 Cr97,680
Divi's Laboratories Ltd (Healthcare)
Equity, Since 30 Sep 18 | DIVISLAB
3%₹7 Cr39,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 May 19 | HDFC
3%₹7 Cr31,000

3. BNP Paribas Long Term Equity Fund (ELSS)

The investment objective of the Scheme is to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity related securities along with income tax rebate, as may be prevalent fromtime to time. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not guarantee / indicate any returns.

BNP Paribas Long Term Equity Fund (ELSS) is a Equity - ELSS fund was launched on 5 Jan 06. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 10.6% since its launch.  Ranked 22 in ELSS category.  Return for 2018 was -9.3% , 2017 was 42.3% and 2016 was -6.6% .

Below is the key information for BNP Paribas Long Term Equity Fund (ELSS)

BNP Paribas Long Term Equity Fund (ELSS)
Growth
Launch Date 5 Jan 06
NAV (06 Dec 19) ₹40.538 ↓ -0.24   (-0.58 %)
Net Assets (Cr) ₹478 on 31 Oct 19
Category Equity - ELSS
AMC BNP Paribas Asset Mgmt India Pvt. Ltd
Rating
Risk Moderately High
Expense Ratio 2.56
Sharpe Ratio 1.31
Information Ratio -0.45
Alpha Ratio 6.35
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Nov 14₹10,000
30 Nov 15₹10,646
30 Nov 16₹10,530
30 Nov 17₹14,008
30 Nov 18₹12,928
30 Nov 19₹14,770

BNP Paribas Long Term Equity Fund (ELSS) SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹367,070.
Net Profit of ₹67,070
Invest Now

Returns for BNP Paribas Long Term Equity Fund (ELSS)

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Dec 19

DurationReturns
1 Month 0.1%
3 Month 9%
6 Month 3.8%
1 Year 15.9%
3 Year 12.4%
5 Year 7.8%
10 Year
15 Year
Since launch 10.6%
Historical performance (Yearly) on absolute basis
YearReturns
2018 -9.3%
2017 42.3%
2016 -6.6%
2015 7.7%
2014 53%
2013 7.7%
2012 34.3%
2011 -15%
2010 14.9%
2009 70.2%
Fund Manager information for BNP Paribas Long Term Equity Fund (ELSS)
NameSinceTenure
Abhijeet Dey16 Nov 162.87 Yr.
Karthikraj Lakshmanan7 Oct 162.98 Yr.

Data below for BNP Paribas Long Term Equity Fund (ELSS) as on 31 Oct 19

Equity Sector Allocation
SectorValue
Financial Services39.87%
Industrials10.58%
Basic Materials9.45%
Technology7.75%
Utility5.98%
Consumer Cyclical5.92%
Consumer Defensive5.54%
Energy3.91%
Communication Services3.59%
Health Care2.51%
Asset Allocation
Asset ClassValue
Cash4.91%
Equity95.09%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 08 | HDFCBANK
9%₹44 Cr360,000
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 12 | ICICIBANK
8%₹36 Cr788,000
Treps
CBLO/Reverse Repo | -
6%₹31 Cr
Axis Bank Ltd (Financial Services)
Equity, Since 31 Aug 18 | 532215
5%₹22 Cr297,141
Reliance Industries Ltd (Energy)
Equity, Since 31 Oct 18 | RELIANCE
4%₹19 Cr127,500
Infosys Ltd (Technology)
Equity, Since 31 Mar 09 | INFY
4%₹17 Cr250,000
↓ -75,000
Asian Paints Ltd (Basic Materials)
Equity, Since 31 Oct 14 | 500820
3%₹14 Cr77,500
Siemens Ltd (Industrials)
Equity, Since 30 Nov 18 | 500550
3%₹14 Cr84,000
↓ -26,000
Sundaram Finance Ltd (Financial Services)
Equity, Since 31 Dec 18 | SUNDARMFIN
3%₹14 Cr85,000
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Jun 18 | TCS
3%₹12 Cr55,000
↓ -5,000

4. Kotak Tax Saver Scheme

The investment objective of the scheme is to generate longterm capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time.

Kotak Tax Saver Scheme is a Equity - ELSS fund was launched on 23 Nov 05. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 11.5% since its launch.  Ranked 19 in ELSS category.  Return for 2018 was -3.8% , 2017 was 33.8% and 2016 was 7.5% .

Below is the key information for Kotak Tax Saver Scheme

Kotak Tax Saver Scheme
Growth
Launch Date 23 Nov 05
NAV (06 Dec 19) ₹45.975 ↓ -0.26   (-0.57 %)
Net Assets (Cr) ₹987 on 31 Oct 19
Category Equity - ELSS
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately High
Expense Ratio 2.4
Sharpe Ratio 0.93
Information Ratio -0.41
Alpha Ratio 3.22
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Nov 14₹10,000
30 Nov 15₹10,162
30 Nov 16₹11,121
30 Nov 17₹14,175
30 Nov 18₹13,847
30 Nov 19₹15,592

Kotak Tax Saver Scheme SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹376,357.
Net Profit of ₹76,357
Invest Now

Returns for Kotak Tax Saver Scheme

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Dec 19

DurationReturns
1 Month 0.9%
3 Month 10.3%
6 Month 1.4%
1 Year 13.2%
3 Year 12.3%
5 Year 9%
10 Year
15 Year
Since launch 11.5%
Historical performance (Yearly) on absolute basis
YearReturns
2018 -3.8%
2017 33.8%
2016 7.5%
2015 1.5%
2014 56.6%
2013 -6.3%
2012 36.2%
2011 -26%
2010 19.9%
2009 75%
Fund Manager information for Kotak Tax Saver Scheme
NameSinceTenure
Harsha Upadhyaya25 Aug 153.44 Yr.

Data below for Kotak Tax Saver Scheme as on 31 Oct 19

Equity Sector Allocation
SectorValue
Financial Services27.52%
Industrials19.74%
Basic Materials17.5%
Energy8.45%
Technology7.91%
Consumer Defensive6.44%
Consumer Cyclical5.55%
Utility3.08%
Health Care2.19%
Asset Allocation
Asset ClassValue
Cash1.58%
Equity98.38%
Other0.04%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 06 | RELIANCE
7%₹68 Cr464,000
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK
7%₹65 Cr1,400,000
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 10 | HDFCBANK
6%₹59 Cr480,000
Axis Bank Ltd (Financial Services)
Equity, Since 31 Mar 13 | 532215
6%₹57 Cr775,000
GlaxoSmithKline Consumer Healthcare Ltd (Consumer Defensive)
Equity, Since 30 Nov 17 | 500676
4%₹41 Cr45,000
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 18 | TCS
4%₹39 Cr170,000
Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 14 | LT
4%₹37 Cr250,000
SRF Ltd (Basic Materials)
Equity, Since 30 Apr 16 | SRF
3%₹30 Cr105,000
AU Small Finance Bank Ltd (Financial Services)
Equity, Since 30 Jun 17 | 540611
3%₹27 Cr400,000
Infosys Ltd (Technology)
Equity, Since 31 Dec 05 | INFY
3%₹27 Cr400,000
↓ -50,000

5. Invesco India Tax Plan

The investment objective of the Scheme is to generate long term capital growth from a diversified portfolio of predominantly equity and equity-related securities.

Invesco India Tax Plan is a Equity - ELSS fund was launched on 29 Dec 06. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 13.7% since its launch.  Ranked 17 in ELSS category.  Return for 2018 was -1.3% , 2017 was 35.7% and 2016 was 3.4% .

Below is the key information for Invesco India Tax Plan

Invesco India Tax Plan
Growth
Launch Date 29 Dec 06
NAV (06 Dec 19) ₹52.83 ↓ -0.28   (-0.53 %)
Net Assets (Cr) ₹962 on 31 Oct 19
Category Equity - ELSS
AMC Invesco Asset Management (India) Private Ltd
Rating
Risk Moderately High
Expense Ratio 2.39
Sharpe Ratio 0.71
Information Ratio -0.3
Alpha Ratio -1.49
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Nov 14₹10,000
30 Nov 15₹10,530
30 Nov 16₹11,171
30 Nov 17₹14,367
30 Nov 18₹14,720
30 Nov 19₹15,915

Invesco India Tax Plan SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹385,859.
Net Profit of ₹85,859
Invest Now

Returns for Invesco India Tax Plan

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Dec 19

DurationReturns
1 Month 0%
3 Month 10.1%
6 Month 2.8%
1 Year 10.6%
3 Year 13%
5 Year 9.4%
10 Year
15 Year
Since launch 13.7%
Historical performance (Yearly) on absolute basis
YearReturns
2018 -1.3%
2017 35.7%
2016 3.4%
2015 5.8%
2014 54.3%
2013 10.1%
2012 30.3%
2011 -18.9%
2010 22.1%
2009 83.5%
Fund Manager information for Invesco India Tax Plan
NameSinceTenure
Amit Ganatra29 Mar 181.59 Yr.
Dhimant Kothari29 Mar 181.59 Yr.

Data below for Invesco India Tax Plan as on 31 Oct 19

Equity Sector Allocation
SectorValue
Financial Services33.41%
Consumer Defensive11.08%
Industrials9.99%
Technology9.15%
Energy8.99%
Consumer Cyclical7.63%
Health Care5.8%
Basic Materials5.24%
Utility2.24%
Communication Services1.59%
Asset Allocation
Asset ClassValue
Cash4.89%
Equity95.11%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Ltd (Financial Services)
Equity, Since 28 Feb 09 | HDFCBANK
9%₹83 Cr678,130
Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 17 | RELIANCE
8%₹76 Cr522,200
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Dec 15 | ICICIBANK
7%₹66 Cr1,421,664
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Oct 18 | HDFC
6%₹62 Cr289,121
Triparty Repo
CBLO/Reverse Repo | -
6%₹55 Cr
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 19 | TCS
5%₹51 Cr224,486
Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 17 | LT
4%₹43 Cr292,256
ITC Ltd (Consumer Defensive)
Equity, Since 31 Jul 19 | ITC
4%₹42 Cr1,615,672
Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Jun 19 | 500696
3%₹33 Cr149,509
↑ 32,810
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jul 19 | KOTAKBANK
3%₹29 Cr183,772

How ELSS Better Than Other Tax Saving Investments?

There are various Tax Saving Investment options in India among which ELSS is one of the best options. How? Here are some of the reasons mentioned.

High Returns over Long-Term

The ELSS funds allocate the highest number of assets in stock market among other tax saving investments. So, these funds earn best Inflation-beating returns amongst all. If invested for a longer duration, the rate of returns of ELSS can easily beat the returns of other traditional debt-oriented investments. Therefore, ELSS Mutual funds provide investors with the best of both worlds- high returns and tax benefits.

Shortest Lock-in Period

The ELSS Mutual Funds have a short lock-in period as compared to the traditional tax saving investment options. The lock-in period of ELSS funds is 3 years while that of PPF is 15 years and of NPS is until retirement. So, by investing in ELSS your money does not get locked for a longer duration and you can stop investing soon after the lock-in is over.

Highly Flexible Investment

The flexibility of ELSS Mutual Funds is much more than all other tax saving investments. Unlike traditional investments, there is no need of investing in only one type of option. ELSS funds enable you to diversify your portfolio with different kinds of investments. Also, the investors can remain invested in these funds even after the lock-in period is over. So, once the lock-in is over, you can easily choose to remain invested or redeem as per your convenience.

Conclusion

In conclusion, here are a few tips for investors investing in ELSS Funds.

  • Start investing in ELSS early
  • Invest within your limits
  • Do not choose dividend reinvestment
  • Redeem slowly and gradually
  • Invest via a SIP
Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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