Everyone wants to be wealthy and in today’s materialistic world, success is measured in terms of money and wealth amassed. Saving in proper schemes and proper planning for saving is also a basis for safeguarding the wealth earned.
Saving for the future is directly co-related to earning and financial planning. As one star earning, he starts looking for ways to save and is in the constant lookout for perfect saving schemes and plans. Income Tax Act sec 80C paves way for deductions from the income tax on the amount invested in savings.
ELSS full form is Equity Linked Savings Scheme is one of the most popular saving schemes under Sec 80C. In this saving scheme, the investors enjoy the double benefit, one is a tax deduction and the other is the benefits of capital appreciation.
Choose the AXIS long-term equity funds less mutual funds saving scheme for your savings and reap the benefits today.
ELSS is a diversified equity mutual fund scheme that has a sharks’ share invested in the equity market and the returns on the ELSS investment is reflected via the returns based on the equity market.
Lock-in period
Equity fund ELSS has a three-year lock-in period, meaning, that the amount invested in the mutual fund will be locked up for three years and the benefit will heavily depend on the equity market. After the three years period, ELSS investors can exit the market.
Dividend or growth – your choice
ELSS scheme comes with two options which allow the investors to choose if they want a lump sum amount at the end of the maturity period or if they want to get monthly dividends on the amount invested. They can either choose the growth option or the dividend option.
Why choose ELSS?
Compared to other saving schemes, the lock-in period for ELSS is quite less, i.e. only 3 years. In PPF the lock-in period is 15 years, NSC 6 years, and bank fixed deposits have a minimum of 5 years lock-in period.
Apart from the lesser lock-in period, investors earn higher returns compared to the rate of investment.
Also, there is no minimum limit of investment in ELSS.
Before choosing ELSS, look for these things
For the safety of the investor and his money, it is vital that one looks and researches the fund properly and checks its performance in the recent time. Also, one must check the Fund managers’ profile, fund’s profile, its performance, risks and risk coverage.
Cons of ELSS
A good investor does not only go by the pros of a saving scheme. He should always see the negative side and compare the funds and invest properly. In ELSS, finding the right fund can prove to be quite difficult.
Since the returns are based on the equity market, the risk can be quite high as it will completely depend on the stocks and their ratings and there is no guarantee on returns.
Also, one cannot prematurely withdraw the amount in case of emergency too.
ELSS is perfect for people who are at the starting stage of their career and are starting out humbly and wish to invest their savings in a low-risk saving scheme.
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