Equity Linked Savings Scheme
With a plethora of savings schemes available in the market, Equity Linked Savings Scheme marks as one of the best schemes to help you secure a wealthy future. ELSS is basically a mutual fund scheme that comes with dual benefits of tax-free assured higher returns. Since the scheme has a lock-in period of 3 years, it promotes disciplined investment among the investors. The investment in ELSS can be made either using SIP (Systematic Investment Plan) or in lump sums.
Most financial experts agree that ELSS is a great tax-saving instrument as it comes with an excellent combination of certain features and benefits, making it one of the top investment choices.
- Shortest lock-in period – Compared to others, ELSS has the shortest lock-in period of 3 years, while savings instruments such as FDs and PPFs has minimum lock-in period of 5 years and 15 years, respectively. Thus, equity linked savings scheme offers better flexibility to access funds. However, an investor can continue with the ELSS account even after 3 years.
- Higher returns – While most investment instruments offer single digits returns on an average, ELSS promises significantly higher returns on maturity. This is because the scheme invests in a portfolio of equity instruments.
- Tax benefits – ELSS counts for tax benefits other than Section 80 C and the investor can avail long-term capital gains for up to Rs.1 lakh. ELSS mutual funds are exempted from the IT and any gains above Rs.1 lakh are taxable at 10% annually.
- Flexible investment option – An investor has got the choice to invest either using a SIP or in lump sum. This gives more flexibility to the investor to proceed with their investment strategy.
- Lowest investment – Investors can begin investing in the ELSS with as low as initial investment of Rs.500 and can earn 2x returns for the same.
- Easy withdrawals – Even though the investors cannot withdraw funds from the ELSS account during a lock-in period of 3 years, but after that, he or she has got the flexibility to withdraw funds from the account either partially or in full.
- Highly secured – Investors can rest assure that their funds are in safe hands with the bank graded safety and security.