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4 Reasons Why ELSS is the Best Section 80C Tax-Saving Investment

Yes, Equity Linked Saving Schemes are Risky. They offer better returns over time than any other Section 80c mode of tax saving investment instrument has to offer, but when you don’t pay attention, ELSS investments can turn out to be a risky affair.

But, does it mean that you should stop? You should let go of all the great benefits and high returns that ELSS funds can get you? No.

And the reasons why you want to invest in ELSS goes more than the fact that help you save tax.

In this article, we are going to look at the different reasons that make ELSS one of the best modes of investment which will give you twin benefits – Save Tax and Earn High Returns.

So, without further delay, let us get right into it.

The 4 Reasons You Should Make ELSS Investment

1. Has a very small lock-in Period

When compared to a number of other tax saving investments like the tax saving Public Provident Fund or Bank Deposit, National Savings Certificate, etc. The lock-in period that ELSS fund comes with is a lot lower. While FD, PPF, and NSC come with a time frame of 5 years, 6 years, and 15 years respectively, ELSS only has a 3 years lock-in timeline.

So, if you look at it on the liquidity front, ELSS gives you the option to redeem your invested amount in the lowest possible time.

2. A very High Return on Investment

ELSS mutual fund type is an investment model that deals with equity-based markets and stocks. And, because equity is known to offer a much higher return than debt, you can be sure that the returns would be a lot higher than any other form of mutual fund investment let alone other tax saving instruments.

Now, talking of returns on tax saving instruments, the usual range that one can expect is 6% to 12%, 15% if you are lucky, but in case of ELSS fund investments, the range lies somewhere between 16% to 18%.

3. Gets You Financial Discipline Through SIPs

ELSS does not just help you save tax and get you really high returns, but also when invested in through the SIP or Systematic Investment Plan route, it helps inculcate discipline in the young investors or even the one who finds it too difficult to hold on to one portfolio or a fund scheme.

4. It’s a Long Term Investment Model

ELSS allows investors to stay in the fund even when the lock-in period is done. In fact, considering how it is an equity model, your returns will only grow when you leave them out for the long-run. If you have invested in a well-diversified ELSS scheme, you can be sure that it will only grow and work in your favor if you just let it grow on its own terms.

So, these are the four reasons you should invest in Equity Linked Saving Scheme out of all the other tax saving mode of investment opportunities. And now that you have seen them, it is time to let you know what the next steps are.

After you have decided that it is indeed ELSS fund investment you are going with to save some tax, the right thing to do is select a fund scheme or a portfolio that would help your invested money grow to a huge extent. And, after you have chosen the right ELSS fund scheme after much scrutiny, the next and only thing left for you to do is be patient and see your money grow. And, just when the time comes to go ahead of the lock-in period, instead of redeeming the amount, reinvest it in another ELSS mutual fund investment.

And, if in case, you are looking for other advice, get in touch with our team of mutual fund experts, today!

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