alexa
 FREE Credit Score  Watch Our Videos

Download Financial Freedom App and Start your journey to become RICH

Search in Indianmoney's WealthPedia

Equity Linked Savings Scheme

ELSS gives you the twin benefits of tax saving and return on return.
Just Leave a Missed Call on 022 6181 6111,
Our Money Doctor will reach you shortly !

Get the best advice on
Equity Linked Savings Scheme

I have read and I agree to the Privacy Policy
 
Equity Linked Savings Scheme
FAQ's Articles News Videos Education Calculator

Learn to Save, Spend, Invest & Borrow Wisely with our Youtube Channel

Rate us
  • ★
  • ★
  • ★
  • ★
  • ★
4.1 / 5 based on 380 User Reviews

What is ELSS?

Equity Linked Saving Schemes popularly called ELSS, is a type of equity diversified mutual fund, which invests most of your money in stocks. ELSS has a compulsory 3 year lock-in. You cannot touch your money for 3 years.

ELSS not only helps your money grow, it also helps save tax. With ELSS, you enjoy the compounding benefits of return on return.

You can invest a lump sum in ELSS or you can invest in ELSS via SIPs (Systematic Investment Plans). SIPs allow you to invest small sums of money regularly, say once a month or quarter, in the ELSS. SIPs help you average purchase costs, bring financial discipline in your life and give you the compounding benefit.

Youth in India must invest in ELSS

ELSS is a very good investment for the youth in India. ELSS invests most of the money in equity and if you stay invested for many years, your investment will grow to a huge amount. This makes ELSS an excellent investment for retirement.

If you don't have much money, consider an investment via SIPs. You invest small amounts regularly and at retirement, you have a huge corpus.

If you are a first time investor in mutual funds, try ELSS. Many first time investors in mutual funds prefer to invest in ELSS, giving it the name, “first mutual fund scheme”.

After you are familiar with ELSS, you can easily try out equity diversified mutual funds and other equity funds. ELSS Schemes give higher returns than equity diversified mutual funds in most cases, as they enjoy tax deductions.

  • Ask Money Doctor

    Hello friend! I am your personal financial advisor. By the end of this interactive session, I will help you to plan yours and your family's finances to ensure a better future.

  • Ask IndianMoney.com Money Doctor
Why invest in ELSS?

Invest small amounts

You can invest a small amount of Rs 500 a month via SIPs in an ELSS.


       

Short Lock-in

ELSS has the shortest lock-in period among other tax-saving instruments like PPF, Tax Saver FD, NSC and so on.

       

Gives Good Returns

ELSS has a 3 year lock-in period which forces you to stay invested in equities. Staying invested in equities for the long term, generally means good returns.

 

Tax Benefits

The investments you make are tax-free up to Rs 1.5 Lakhs a year under Section 80C.

       
Key Factors To Consider for ELSS

Factors To Consider while investing in ELSS

  • Invest in ELSS at the start of the financial year to save tax. Invest in ELSS through SIP.

  • Look for consistency in the ELSS Scheme. The ELSS Scheme must be a consistent performer for at least 3-5 years.

  • Don't rush to redeem the ELSS after the lock-in period of three years. Stay invested for maybe two more years to pocket higher returns.

  • If you invest in too many ELSS Schemes, it would be difficult to monitor performance. Stick to an investment in just 2-3 ELSS Schemes.

 

Concepts & FAQ's Equity Linked Savings Scheme

What is an ELSS?

Equity Linked Savings Scheme (ELSS), is a type of equity diversified mutual fund which invests most of your money in stocks. ELSS gives good returns over the long term coupled with tax benefits.

ELSS is a very famous investment because it is the only mutual fund which enjoys Section 80C benefit. This investment qualifies for a tax deduction up to Rs 1.5 Lakhs a year. ELSS enjoys the shortest lock-in of just 3 years, among all tax saving investments under Section 80C.

Who should invest in ELSS?

ELSS is very good for people who have just started their career and have a long time to meet financial goals like buying a house, purchasing an apartment and education and marriage expenses for kids.

ELSS invests most of the money in equity and is not suitable for people, who don't have the ability to take risk. If you are risk-averse, stay away from ELSS.

Many new investors are afraid to invest in ELSS, because most of the money is invested in stocks. You can overcome the fear of ELSS, by staying invested for long periods. Many ELSS Schemes have rewarded investors who have chosen to stay invested for long periods of time.

Who should invest in ELSS?

If you have already invested in equity mutual funds, do consider investing in ELSS. ELSS has a compulsory lock-in of 3 years, which helps you get used to volatility in the stock market. This makes ELSS an ideal investment and a great first investment in equity. Once you get used to investing in ELSS, you can easily invest in other equity mutual funds.

What returns can you expect from ELSS?

ELSS invests most of your money in stocks and investors expect massive returns. It is important to be realistic with this investment. You get superior returns on staying invested for long periods, but do not expect the same performance every year.

Have a realistic expectation of 10-12% tax free returns from ELSS over long periods.

  • Ask Money Doctor

    Hello friend! I am your personal financial advisor. By the end of this interactive session, I will help you to plan yours and your family's finances to ensure a better future.

  • Ask IndianMoney.com Money Doctor
Thinking of investing in ELSS?

To be absolutely sure of WHAT TO LOOK OUT, talk to IndianMoney.com on the phone for FREE financial consultation.

Expert Financial Advisors from IndianMoney.com would provide you unbiased, correct and up to date information so that you can make an informed financial decision.

Mistakes to avoid while investing in ELSS

Avoid investing in ELSS at the last minute.

Do not invest in ELSS at the end of the financial year, just to save tax. Investing in ELSS at the last minute will force you to invest a lump-sum. Invest in ELSS at the beginning of the financial year through SIP, which gives the benefits of rupee cost averaging and the compounding benefit.

Invest without understanding the category of funds.

AMCs offer ELSS mutual funds as large, medium and small cap funds. Risk varies depending on the type of funds. Take the help of a financial advisor to understand the fund and make a suitable investment.

Choosing the wrong option.

Just like other equity funds, ELSS offers both the Dividend and Growth Option. Select the growth option to enjoy compounding benefit, as your gains are reinvested and your money grows. If you choose the dividend option, you end up spending the dividends and compromising future financial goals.

Focus only on past performances.

In an ELSS, past performances are no guarantee of future returns. Identify ELSS Schemes which are consistent performers. Take a look at the performance of the ELSS Scheme over 5 years before making investing decisions.

Get the Best Financial Advice on Equity Linked Savings Scheme Leave a Missed Call @ 022-6181-6111
 

Equity Linked Savings Scheme Articles

There is no Shortcut to become RICH, But here is a SECRET.Download the IndianMoney App and Be Wise & Get Rich

Google Play
Read Article

What Is Medium Duration Fund? Advantages of Medium Duration Fund

23 March 2020, Monday    

What Is Medium Duration Fund? Advantages of Medium Duration Fund If you are a conservative investor and are looking to deploy your idle funds in some alternative investment other than bank fixed deposits, then debt funds are what you should invest in. Let’s try to analyse through this artic ....

Mutual Fund Investing In Medium Duration Fund Medium Duration Fund Returns Advantages Of Medium Duration Fund Top 5 Medium Duration Fund

What is Overnight Fund? Advantages of Overnight Fund

13 March 2020, Friday    

Mutual funds are a safe investment preferred by the common people. Overnight funds include the additional advantage of being highly liquid among others. As the name suggests, these are funds that invest in assets and securities that mature within a day. This is a kind of debt fund. Want to know m ....

Mutual Funds Overnight Funds Advantages Of Overnight Mutual Funds Risks Of Investing In Overnight Funds Overnight Fund 2020

What Is Ultra Short Duration Fund? Is It Good to Invest?

11 March 2020, Wednesday    

What Is Ultra Short Duration Fund? These are the mutual fund schemes that select bonds or debt instruments for investment over a short-term. The average maturity period for such investments is short and thus it helps negate the interest rate fluctuations. However, they may provide lower returns t ....

Mutual Fund Mutual Fund Scheme

LOAD MORE
 

Equity Linked Savings Scheme News

There is no Shortcut to become RICH, But here is a SECRET.Download the IndianMoney App and Be Wise & Get Rich

Google Play
 
Home News
 

Cabinet approves launch of Bharat Bond ETF

Wednesday, December 4, 2019, 6:06 PM

The Cabinet today approved the launch of the Bharat Bond Exchange Traded Fund or ETF, which would be the first corporate bond ETF in the country. ETFs invest in a basket of securities representing an index, security or commodity and are traded on the stock exchange like any security listed on the exchange.
Mutual Funds Mutual Fund Mutual Fund News GOI Mutual Funds News MF Finance Minister Of India Nirmal Sitharaman Bharat Bond ETF

Mutual funds add around 5 lakh folios in Aug

Thursday, September 12, 2019, 5:38 PM

The mutual fund industry has added around 5L investors' account in August, taking the total tally to 8.53-crore, amid volatile market conditions. In comparison, the industry had added 10.29L new folios in July. Folios are numbers designated to individual investor accounts. An investor can have multiple folios. The total folio count stood at 8.38L in June, 8.32L in May and 8.27L in April.
Companies General Mutual Fund

Mutual fund SIP collection falls marginally to Rs 8,231 cr in August

Monday, September 9, 2019, 5:38 PM

Mutual fund investors continue to pour in money through SIPs. Mutual funds received Rs 8,230.76 crore via SIP in August, marginally lower than the collections last month, shows Amfi data. In July, mutual funds collected Rs 8,324 crore via SIPs. SIP AUM on the other hand has risen from Rs 2.69 lakh crore in July to Rs 2.71 lakh crore in August.
sip Mutual Fund Investment

LOAD MORE
 

Equity Linked Savings Scheme Videos

There is no Shortcut to become RICH, But here is a SECRET.Download the IndianMoney App and Be Wise & Get Rich

Google Play
 

Learn to Save, Spend, Invest & Borrow Wisely with our Youtube Channel

Home Videos
Mutual Funds for Beginners -Things to Know Before Investing in Mutual Funds India

Mutual Funds for Beginners -Things to Know Before Investing in Mutual Funds India

1 Month Ago

Start your Journey to Become Rich with IndianMoney's Financial Freedom App, Download here: https://indianmoney.com/ffa/FmCSZ69pHo
Mutual Funds Mutual Fund Agents Mutual Funds Basics
ಹೂಡಿಕೆ ಮಾಡ್ಬೇಕಾ ಇಲ್ಲ ಸಾಲ ತೀರಿಸ್ಬೇಕಾ? - Should You Pay Off Your Loans First or Invest?

ಹೂಡಿಕೆ ಮಾಡ್ಬೇಕಾ ಇಲ್ಲ ಸಾಲ ತೀರಿಸ್ಬೇಕಾ? - Should You Pay Off Your Loans First or Invest?

1 Month Ago

Start your Journey to Become Rich with IndianMoney's Financial Freedom App, Download here: https://indianmoney.com/ffa/FmCSZ69pHo
Debt Investment
Loan Against Shares - Can you Borrow Money Against Shares? | How to Get Loan Against Shares?

Loan Against Shares - Can you Borrow Money Against Shares? | How to Get Loan Against Shares?

1 Month Ago

Start your Journey to Become Rich with IndianMoney's Financial Freedom App, Download here: https://indianmoney.com/ffa/FmCSZ69pHo
shares Loan Against Fixed Deposit Share Market Loan Against Credit Card

LOAD MORE
 

Equity Linked Savings Scheme Education

There is no Shortcut to become RICH, But here is a SECRET.Download the IndianMoney App and Be Wise & Get Rich

Google Play
 
Home Education
 

What Is Financial Market?

Saturday, January 19, 2019, 6:00 PM

As the name suggests, financial market is a marketplace where the trading of financial instruments like bonds, mutual funds and shares takes place. It is an arrangement or institution that facilitates trading and where buyers and the sellers aggregate to trade in financial products. The financial market can be classified into the primary and secondary market.
Union Budget 2017 Mutual Fund Folio Advantages Of Including Parents In Employer’s Group Health Insurance Plans Greaves Cotton IL&FS LIC

What is a Systematic Investment Plan?

Wednesday, September 5, 2018, 5:28 PM

A Systematic Investment Plan or SIP is a smart and hassle free mode for investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc.). A SIP is a planned approach towards investments and helps you inculcate the habit of saving and building wealth for the future.
Mutual Funds Buffett`s Money Rules Taj Mahal Tirumala Tirupati Devasthanams

What is Net Asset Value (NAV)?

Wednesday, September 5, 2018, 11:19 AM

NAV is the total value of all the mutual funds assets minus the value of all its liabilities per unit. It is the price at which you buy or sell units of a mutual fund. The assets of a mutual fund are securities like equity shares, bonds, commercial papers and debentures. Accrued interest and dividends are also the assets of the Mutual Fund.
Mutual Funds Buffett`s Money Rules Bank Of Maharastra Tirumala Tirupati Devasthanams

LOAD MORE
 

Calculator

There is no Shortcut to become RICH, But here is a SECRET.Download the IndianMoney App and Be Wise & Get Rich

Google Play

Related Articles

23 March 2020, Monday

What Is Medium Duration Fund? Advantages of Medium Duration Fund

  • What Is Medium Duration Fund? Advantages of Medium Duration Fund If you are a conservative investor and are looking to deploy your idle funds in some alternative investment other than bank fixed deposits, then debt funds are what you should invest in. Let’s try to analyse through this artic
13 March 2020, Friday

What is Overnight Fund? Advantages of Overnight Fund

  • Mutual funds are a safe investment preferred by the common people. Overnight funds include the additional advantage of being highly liquid among others. As the name suggests, these are funds that invest in assets and securities that mature within a day. This is a kind of debt fund. Want to know m
11 March 2020, Wednesday

What Is Ultra Short Duration Fund? Is It Good to Invest?

  • What Is Ultra Short Duration Fund? These are the mutual fund schemes that select bonds or debt instruments for investment over a short-term. The average maturity period for such investments is short and thus it helps negate the interest rate fluctuations. However, they may provide lower returns t

Most Read Articles

18 July 2012, Wednesday

How to Make Claim on a health Insurance Policy?

Formalities for a health insurance claim You can make a claim under a Health insurance policy in two ways: On a Cashless basis and A Reimbursement Claim On a Cashless basis: For a claim on cashless basis, your treatment must be only at a network hospital of the Third Party...

14 March 2014, Friday

ELSS - Utilizing the power of compounding

As the name suggests ELSS invests the whole corpus in equities. Proportions as high as 80-90% of equities are found in an ELSS Fund. It is a special kind of mutual fund that qualifies for tax benefits. Basically Equity Linked Savings Scheme is a mutual fund with a lock in period of three years and...

07 January 2014, Tuesday

Why One Must Never Neglect Estate Planning?

One of the most common reason for family feuds in India as in the rest of the World is faulty estate planning. Estate planning is a neglected topic in India mainly because of the emotions attached to it. A common reason people neglect to make a will or indulge in estate planning in their younger yea...

CIBIL Meter

Get FREE Credit Score now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.