ELSS is the very basic term for the regular mutual fund investors. ELSS stands for equity linked Saving Scheme. Investment in ELSS will avail you tax benefits under section 80 C. The major portion of the elss investment is invested in an equity fund. Investors can start an equity link savings scheme with just a token of Rs. 500. With these schemes, you can save more than compared to a savings account, fixed deposit, or PF account. There is an option that it depends upon investors that how they want to invest whether by investing in one go or by investing every month in equity-oriented assets by SIP (Systematic Investment Plan). ELSS is one of the best mutual fund schemes for those investors who are new in this field.
Advantages of ELSS mutual fund scheme
- Better Return
ELSS mutual fund schemes provide better Returns if we compare to other mutual fund schemes. It gives high returns with minimum investment.
- Greater Returns possibilities
In the period of ELSS mutual funds schemes is of 3 years, so the chances of greater return can be higher. An investor can also reinvest capitals in ELSS mutual funds without any fresh fund inflows.
- No limitations
There is no limit on how much you can invest in it. But more often, people invest in equal to 1.5 lakh or less than that, so that they can get the tax benefit under the Income-tax Act 80C.
- Expert management
Experienced professionals invest and manage the ELSS funds based on the research on the changes in the market to ensure returns.
The top ELSS mutual fund schemes
| Top Performing ELSS (Mutual Funds) | ||
| ELSS (Equity linked saving scheme) | 3 Yr. returns | 5 Yr. Returns |
| Axis long Term equity fund | 14.5% | 24.6% |
| Aditya Birla Sun life tax relief 96 | 15.90% | 23.5% |
| DSP BlackRock tax saver fund | 14.3% | 20.7% |
| Reliance Tax saver fund | 9.2% | 21.12% |
| ICICI prudential long-term equity fund | 12% | 20.1% |
| Invesco India Tax Plan | 11.02 % | 19.05% |
In the past 5 years of period, these funds have generated near to 20℅ of returns. These can fall into the criteria of best ELSS mutual funds. But before selecting any type of fund, an investor should investigate the past performance of those funds as well as must evaluate their risk appetite. Investors should always keep in mind that past performance is not a guarantee of future performance, but it can be a way through which they can predict the future to some extent it can be used as a benchmark for future references.
Things to take into consideration before investing in ELSS mutual funds
- It requires a lot of research before investing in any kind of fund and to choose which one is better.
- Always prepare a note to track down the past performance of the fund and check on their ratings.
- The returns of these funds are not guaranteed based on past performance.
*Mutual fund and investments are very risky. Please read the document very carefully before doing the investment.