ELSS or Equity Linked Savings Scheme of Mutual Funds are one of the best tax saving cum long-term wealth creation investment tools. The investments made in ELSS schemes are eligible for income tax deduction under Section 80c.
For salaried employees, the deadline to submit the Investment Proofs to save income tax is fast approaching. Most of the employers collect the investment documents sometime between January and March. It is often observed that during this period many investors/employees who have not done their tax planning rush to buy unwanted life insurance policies or some other low-yielding tax saving investment products.
Do note that ELSS Tax saving mutual funds come with a lock-in period of three years; the lowest among all the tax saving options that are available under Section 80C. (PPF’s lock-in period is 15 years, Tax saving Bank Fixed Deposit’s is 5 years, National Saving Certificate’s is 5 years etc.,)
I had written an article on ‘Best Tax Saving Mutual Funds to invest in 2015’. The Top 5 best ELSS funds listed in that post (2015) were;
- Axis Long Term Equity Fund
- Franklin India Tax shield Fund
- ICICI Prudential Tax Plan
- Canara Robeco Equity Tax Saver Fund
- Religare Invesco Tax Plan
Let me present you the latest & updated list of the best ELSS tax saving mutual fund schemes that can be considered for long-term investments in 2016 and beyond.
If you have already invested in any of the above funds, you may continue with them and keep a track of your investments. If you are new to ELSS funds, you may consider the below Top performing ELSS tax saving MF Schemes.
Top 10 Best ELSS Tax saving Mutual Funds
There are around 95 ELSS funds under Tax Planning / ELSS Fund category. In the last five and ten years the average returns generated by ELSS fund category are around 10% & 12% respectively.
Let me first list down the top performing Equity Linked Saving Schemes purely based on the investment returns (past performances). I have considered both lump sum as well as SIP returns for the past 5 years to 10 year period. I have considered only those funds which are at least 6 years old.
- Axis Long Term Equity Fund
- Reliance Tax Saver Fund
- BNP Paribas Long Term Equity Fund
- Franklin India Taxshield
- Religare Invesco Tax Plan
- Birla Sunlife Tax Plan
- TATA India Tax Savings Fund
- ICICI Prudential Long Term Equity Fund – Tax Saving – Regular Plan
- IDFC Tax Advantage Fund
- Canara Robeco Tax Saver
HDFC Tax Saver Fund is missing from the list when compared to my top 10 2015 list. Kindly note that ICICI Pru Tax Plan has been renamed as ICICI Pru Long Term Equity Fund.
Top 6 Best ELSS Mutual Fund Schemes for SIPs or Lump Sum Investments in 2016
Below parameters have been considered to shortlist the 6 top performing ELSS mutual funds that can be considered in 2016 and beyond;
- I have considered the past returns generated by these funds for the last 5 year, 10 year period and since inception.
- Funds with a good track record for the last 5 to 10 years have been preferred. . I have considered only those funds which are at least 6 years old.
- ELSS Funds which have low risk grade have been given comparatively higher rank. Due importance have been given to Standard Deviation, Alpha, Beta, Sharpe Ratio and overall Risk grades of the funds.
- I have considered Expense ratio as one of the criteria.
- This year besides moneycontrol, valueresearchonline and Morningstar portals, I have also used few ‘mutual funds calculators’ available at freefincal portal.
- Morningstar portal’s ‘mutual fund screener’ has been used to filter funds based on fund performance & risk (risk adjusted), standard deviation, fund portfolio & expense ratio.
- The fund returns Vs fund category returns have been given due importance.
- Like last time, in this review too I have not considered the STAR ratings of funds provided by ranking agencies. Usually these star ratings reflect the short term (1 or 2 year’s) performance of the funds.
Top 6 Best ELSS Mutual Funds in India
Below are the top performing and highly rated ELSS Funds to invest in 2016.
- Franklin India Taxshield
- It is one of the oldest ELSS funds with a proven track record in all market conditions (bear & bull phases).
- Since inception the fund has given returns of around 25%.
- It has LOW risk grade.
- This ELSS fund’s strategy has been to buy quality large caps or emerging large caps at a reasonable price.
- The fund’s portfolio has around 70% exposure to Large Cap companies.
- Banking & Financial Services sector has an allocation of 26% and followed by Automotive sector with an allocation of around 12%.
- Franklin Taxshield ELSS fund is best suited for conservative equity investor who would like to get decent investment returns with a low-risk profile.
- If you have invested in a Systematic Investment plan (SIP) of Rs 1,000 per month for the last 10 years, the accumulated investment value would have been Rs 2.83 Lakh.
- Axis Long Term Equity Fund
- This fund has one of the highest AUMs in the Equity MF market.
- The fund performance in the last 5 year period has been stupendous, with a returns of around 19%
- This fund too has a LOW risk grade.
- I have made investments in this ELSS fund. (You may like reading : ‘My Mutual Fund Portfolio – My MF Picks‘)
- This fund can be considered as a true MULTI-CAP fund within ELSS fund category. This fund has maintained a 55-60% allocation towards large-cap stocks and 35-40% in mid-cap stocks.
- This fund also has invested primarily in Banking sector & Automotive stocks.
- Birla Sunlife Tax Plan
- It is also one of the oldest ELSS funds.
- Since inception of this fund it has given returns of around 21%.
- Portfolio allocations show the fund to be more small-cap oriented than its peers, with a 15-22 per cent allocation to Small-Cap Stocks.
- This fund has taken a hard knock in bear markets of 2001 and 2008.
- ICICI Prudential Long Term Equity Fund
- ICICI Pru Tax plan has been renamed as ICICI Pru LTE fund.
- This fund has been consistently beating the benchmark (Nifty 500) and the ELSS fund category in 13 of the last 15 years.
- The fund’s portfolio has around 65 to 70% exposure to Large Cap companies.
- If you have invested in a Systematic Investment plan (SIP) of Rs 1,000 per month for the last 10 years, the accumulated investment value would have been Rs 2.80 Lakh.
The other funds to watch out for are BNP Paribas Long Term Equity Fund, TATA India Tax Savings Fund, Reliance Tax saver, Religare Invesco Tax Plan, DSP Blackrock Tax Saver and IDFC Tax Advantage Fund.
- Reliance Tax Saver has been performing well for the last few years. Kindly note that this fund has one of the highest Standard Deviations in ELSS fund category. It has HIGH risk grade.
- TATA Tax Saving Fund‘s standard deviation is one of the lowest of all. It has ‘low fund risk grade.’ But getting abnormal returns from this fund may not be possible.
- Canara Robeco Equity Tax Saver Fund has given returns of 16.5% during last 10 years. This is one of the highest among all the above funds. The fund has an AVG risk grade.
Important points
- Your investment in ELSS funds is LOCKED for a period of 3 years. So, Long Term Capital Gains taxes are not applicable. But, do not invest in ELSS fund(s) with a mind-set of redeeming the fund units as soon as the lock-in period gets over. Kindly note that these are risk-oriented products. You may have to stay invested for longer period to get decent risk-adjusted investment returns.
- ELSS funds can create long-term wealth for you. Suggest you not to opt for Dividend option.
- You may select one ELSS fund for tax saving cum investment purposes. It is advisable not to invest in too many funds within the same fund category. (You may like reading : “MF portfolio overlap analysis tools‘)
- You may also consider investing in Direct Plans of ELSS Mutual Fund Schemes. (Read : ‘How to invest in Direct Plans of MF schemes?‘). If you are a newbie to Mutual funds then do consult a good investment advisor or mutual fund agent.
- Do not get confused between ULIPs (Unit Linked Insurance Plans) and ELSS funds. Kindly note that ULIPs are insurance products.
Have you invested in any of the above Best ELSS mutual funds? Do you also believe that ‘Mutual Fund ELSS’ is a good tax saving instrument? Kindly share your views and comments.
Continue reading : ‘Best Equity Funds to invest in 2017‘.
( Image courtesy of Stuart Miles at FreeDigitalPhotos.net) (References : moneycontrol, valueresearchonline, freefincal & morningstar. Charts Source : Valueresearchonline)
Hi Sreekanth,
You have suggested Franklin Taxshield/Birla Tax plan / DSP Tax saver on 13th mar. as of today stock markets are at 2 years all time high . for tax purpose i need to invest 1.5 lacs lumpson. Considering the market high ,
1. do u suggest investing in ELSS at this time ? if yes in which one
2. or i just put in PPF etc for this time and start monthly SIP from April.
I dont need this 1.5 lacs money for next 10 – 20 years so investing for long term.
Thanks
Vishal
Dear Vishal,
If your investment horizon is 10+ years, you may go ahead and invest in ELSS fund(s).
Do you contribute to EPF scheme?
i have left dollar rat race this year at young age 🙂 now doing social service and devotion in a village. so no EPF. and since this is my first year in india , just figuring out all this ELSS etc.
you are doing great service via this blog.
Thank you dear Vishal. Best wishes 🙂
Hi Sreekanth,
Please suggest me Best ELSS Mutual fund Investements for only 3 years of locking period which gives me good returns grade with low risk grade.
1. I am interested to invest 6 lakh rupees in ELSS Mutual Fund, but only for three years period of time. let me know if it is suggestable to invest in multiple ELSS Fund instead of whole amount in single ELSS Mutual Fund.
2. Please suggest me if this is right time to invest in ELSS Fund for 3 years period, as i m interested to invest in Current month May 2017.
Thanks and Regards,
Mandip Singh
Dear Mandip,
1 & 2 – If you need this money in 3 years, investing in an ELSS fund can be a risky affair.
Sir,
I want to invest total 3 lakhs in ELSS funds for two members of my family (1.5 each) as lumsump in current FY.
Please suggest me good Funds in this category suitable for me.
Dear Sunny,
Suitable for you (or) for your family members?
May I now their investment horizon?
Our horizon is wealth creation in long term for our HUF firms.we shall be investing in ELSS for HUF’S in upcoming years as well.we are not time bound.
Dear sunny,
You may consider Franklin Taxshield/Birla Tax plan / DSP Tax saver.
Dear Sree,
What’s your view on DSP Blackrock Tax Saver ?
I can see Franklin Tax shield or Birla Tax plan is suggested more than DSPBR tax saver in number of forums though DSPBR is consistent and produced more returns than these funds in 5 year and 10 year period. However I couldn’t see no negative comments on DSPBR tax but also no strong recommendations. Why is that so.. I understand that the DSP’s Standard deviation is more than Franklin. But the risk of standard deviation will be reduced when you invest longer time horizon.
Other than am I missing any critical point here ? Kindly advise.
Can you advise please.
Dear Hari,
It is very tough to understand an investors’ requirements online, so most of the times I do refer funds which are more consistent (low SD).
DSP tax saver is a decent fund.
Tats right Sree! If i need to choose between Franklin tax, dspbr tax and birla tax, which one you suggest based on long term like 10 years and to reap good returns… Kindly advise..
Dear Hari..You may consider Franklin or Birla fund.
Hello Sreekanth Reddy first of all we are very grateful to you for your prompt and valuable advises.I invested Rs 80000/- (50K + 30K) in Axis Long term Equity Fund-Growth during last two years.
*I want to invest Rs 30K in ELSS FOR FISCAL YEAR 2016-17, i just want to know in which fund i should invest?
* Whether is it right time to invest in ELSS, as all ELSS funds are soaring at high price and What would be the ideal way to invest?
Dear ASHISH,
You have just two months left for FY 16-17 to end, so no other choice but to invest in an ELSS fund now (if this is your preferred tax saving option).
You may consider to invest in Axis LTE fund itself or Franklin Tax shield fund (assuming you do not have any other MF schemes in your portfolio).
I want to invest in 1.5 lakhs in MF having 80 C benefit.
How is the reliance tax shild fund
Hi Sreekanth,
My FIL is about 60 years old. He wanted to invest 1 lakh per year for about 7 years. He is looking for tax saving (EEE), life insurance and investment with guaranteed returns. Which product will suit him better. Please advise.
Just an update.. Actually he is 61 years old.
Dear Ram,
Tax saving with EEE + guaranteed return + time-frame of 7 years – tough requirements..
Kindly read:
Tax treatment of various financial investments.
List of investment options!
Hi Srikanth garu,
I am working in PSU. I am in 20% tax bracket with annual salary close to 6.5 Lacs. By saving under 80C fully, my taxable income comes below 5 Lacs. My 80C is now close to 1 Lac (with Term Plan & EPF). I can save 20% Tax (10,000) and get 5000 rebate (total 15,000 in one go) by investing Rs.50,000. Even though I understand from your blogs that investments should not be done for Tax savings, my future is little confused with PRC (Pay revision) and personal reasons (house purchase, transfer etc.).
Now, I am confused whether to invest this Rs.50,000 in PPF or ELSS or Sukanya Samruddi. I won’t touch this money for next 7 yrs. or may be more.
If you recommend ELSS then kindly explain difference between Dividend & Growth and Direct & Regular plans. Which one is best. Also, what are the charges involved investing in ELSS / MFs.
Dear Sanjay,
PPF & SSA are very long term saving schemes.
If you are unsure about the investment horizon (long term) and expected investment horizon is around 7 years, you may go ahead with an ELSS fund with Growth option, like Franklin Taxshield.
You can invest in MF through the company website and opt for Direct plan, no fees is applicable.
You can also consider industry sponsored online platform like MF Utility (no fees is applicable).
Kindly read:
What are Direct plans?
Regular plans Vs Direct plans – Returns analysis
MF Utility online platform.
Hi Sreekanth,
Great blog… very impressed..
I am looking to invest in ELSS funds for long term to get the tax deduction under 80C. I am interested only in low risk grade direct funds. I am 40 years old. After reading your blog I decided to invest…
– monthly 10,000 rupees (5000 each) on these two funds SIP.
– planning to use MF utility
Franklin Indian taxshield DIRECT growth
Axis long term equity DIRECT growth
1. Is this a good approach or do you suggest anything better?
2. Do I need any forms from MF utility to show my investment for tax deduction? How does it work?
3. Is there any other fees in MF utility instead of buying directly from AMC?
Dear Ram,
You may go ahead with the listed choices.
You can request for MF statement, which can be used to claim tax deduction.
No fees is applicable.
Hi Sreekanth,
Thanks for your valuable time and prompt reply to every query.Hats off
I am very new to all these things. I want to invest 35000/- INR every month. Purpose is mainly to have good returns out of it. Tax saving under 80c is already achieved by other things.
So, in which and how long should i invest for good returns.
Regards,
Amit
Dear Amit,
May I have details about your Financial goals, investment objectives and time-frame??
Kindly read: Financial Planning pyramid.
Hi Sreekanth
I am 32 years old now.
Frankly speaking i have no goal in mind so far, i was paying home loan EMI upto last december. i sold out that home but have no plans to buy a home at this moment.
As i was regularly investing the money in EMI from past 6 years and i still want to continue that practice, many people suggested me about RD,ELSS /Mutual Funds etc… but i am unsure which can provide better returns on my savings.
I am OK with 5 to 6 years of tenure, with 35000 INR investment per month.
Regards,
Amit
Dear Amit,
You may invest in an Equity oriented balanced fund and one Large cap fund. Ex : HDFC Balanced fund & Birla Equity oriented fund.
Read:
Best Equity funds.
How to pick right mutual fund schemes?
Dear Sreekanth,
I am Kamesh here and I want to invest 50k yearly age @37 now. My mother age is 62 years she want to invest 50k. Please suggest us which option better suits for us i.e like ULP, NSC, FD, SIP or ELSS. Please suggest about the funds in detail.
Thanks In Advance.
Dear Kamesh,
May I know your (both) investment objectives & time-frames?
Kindly read:
Best Investment options.
Financial Planning Pyramid.
Hi Sreekanth,
We both are looking for 10 to 15 years long term. like ICICI Wealth builder etc..
Regards,
Kamesh
Dear Kamesh,
Its an ULIP.
You may be better off investing in Equity oriented mutual funds.
Kindly read:
Best Equity funds.
How to pick right mutual fund schemes?
Hi Sreekanth,
Could you please advice us which funds will be suitable for me and my mother or children. We will invest in those things.
Regards,
Kamesh
Dear Kamesh,
You may pick one each from Large cap, Mutli-cap, mid-cap and balanced fund from the Best equity funds list.
Ex : Birla frontline equity, Franklin Prima plus, Mirae Asset Emerging bluechip and HDFC Balanced fund.
Hi,
After searching a lot i have reached here. I am 24 now and want to avail tax benefit. The amount i want to invest in ELSS right now is 50k. I am not worried about those 50k for at least 10 years from now. Do you think ELSS is right for me?
– And if yes, which fund should i invest in?
– And as i have to invest money before march, is SIP right for me or one time Investment?
– Is there any loss to go for one time investment against SIP or vice-versa?
Thanks,
Gourav
Dear Gourav,
As your investment horizon and objective are 10+ years & tax saving, you can consider an ELSS fund.
Personally I prefer to invest in 2 to 4 installments in an ELSS fund during a FY.
You may consider, Franklin Taxshield fund.
And What should be the time difference in those 2 to 4 installments ? what if i have to do it before march 2015?
and if i am getting it right, doing 2 to 4 installments in a FY means SIP itself? isn’t it?
Dear Gourav,
I meant, investing manually in installments based on markets’ performance (you may consider it as SIP or lump sum investment).
Thanks for the information, I am new to this, I have following question
Q: Can I show lumsum investment made by me this year in elss as deduction for subsequent two years. Without making new investment.
No, dear Jeetu..
Dear Sreekanth Reddy
I am a regular reader of your blogs. Thanks for providing valuable information here.
I am looking for lump sum amount to invest. My objective is to get monthly income of 50,000 per month after 3 years and would like to withdraw the same , yearly (50,000 x 12= 6,00,000). and ready to take high risk.
Kindly let me know the lump sum amount to invest and the fund names.
Thanks
Dear Praveen,
For how long you would like to receive this periodic income? and how much can you be able to invest?
Dear Sreekanth Reddy
I would like to receive this income for 15 years. I can invest 25 Lakh. If this amount is not sufficient ,please let me know.
Thanks
Dear Praveen,
If we assume expected rate of return to be 10% over the next 3 years, your Rs 25 Lakh investment can become around Rs 33.27 Lakh.
If you reinvest this amount at 9% RoI & inflation @ 8%, you can withdraw around Rs 19800 pm for next 15 years.
Hi Sreekanth,
I took ICICI PRU LTE SIP of 8000 Rs from last october and thinking to take 4000 Rs SIP in another ELSS this year for taxsaving say BSL tax plan Direct Growth or BSL Tax Relief 96 Direct Growth .Kindly let me know if there is an overlap between ICICIPru LTE and BSL or not.Also suggest which of the two BSL plans is better.
Thank You.
Dear Shanthi,
Both are equally good. You may consider Birla Tax Relief.
The overlap between ICICI Vs Birla funds is around 20%.
My name is Munmun and I am new to SIP. I am 31 yr old ( married ). I have a PPF account in Post office and also a PF account in embassy I am working for.
I would like to start a SIP, however, a bit worried which one to start with. Please if you can guide. I would like to start initially with depositing Rs.1000 or Rs. 2000 pm for say 10 yrs. If the returns are good then will think about investing more. This I am doing purely for tax saving purpose and also for future investment (long term) so that I have a good amount in my hand once I retire at the age of 60.
Please advise a plan as per my need. Goal is to save tax and increase wealth too.
Dear Munmun,
You may consider an ELSS fund like Franklin Taxshield.
Hi Sree,
I’m planning to invest 70K in elss MF.
Last year I invested 50 k Axis Long Term.
This year I have shortlisted 3 mfs based on recommendation from various blogs.
DSP blackrock
birla sunlife tax relief 98
Franklin India Taxshield Fund.
I’m planning to divide 70k to two different funds.
Based on overlapping /growth /cap which one( or two ) do you suggest.
Dear Hari,
You may pick Franklin Taxshield fund.
Hi Srikant,
I liked your post, its helping people for better tax planning and investments. As I’m a newbie in Mutual funds/ELSS. I would like to have your opinion according to my need.
Need: I’m looking out to invest 2000 per month in ELSS, having goal in mind to save tax and as well as receive higher returns. Please also let me know what would be ideal period to have higher returns and whats max risk of investment(How much loss can it come to generally)
Thank you in advance
Dear Amith,
The maximum loss can be total capital can be wiped out (may be a rare case, provided markets turn out to be very bad and if we choose a very bad fund).
You may consider Franklin Taxshield fund.
Kindly read:
Best Equity mutual funds 2017.
How to select the right mutual fund scheme?
Hey Sreekanth, this article has truly been really helpful. I have about 60k to invest as tax saving for this financial year.
I have been advised to put 30k each in Axis LTE and DSP Black Rock. Do you think this would be a safe bet if I invest in those 2 and redeem these in 3 years time?
I’m fine with redeeming in 5 years time as well.
Dear Binoy,
Kindly note that equity funds are not safe and the returns are not guaranteed.
Both the mentioned funds are good ones and kindly remain invested for longer period.
Can I find any other blogs of this sort by people,who have been successful or whom you follow or followed before ?Please don’t mind as I just want to acquire more info before investing.
Thanks in Advance
Dear Abhinav,
I enjoy reading below blogs;
basunivesh
personalfinanceplan.in
freefincal.com
jagoinvestor.com
cleartax
bemoneyaware.com etc.,
Hi Sr
I want to invest in mutual fund for tax saving purpose for three year. Can you suggest three return for my need. I not looking forward a safety, Higher return. Can take risk if there is chance of higher return.
Dear Dinesh,
You may consider Franklin Tax shield or Axis or LTE
Dear Sreekanth,
I have been investing in Axis through an SIP of Rs 6000/-for the last one and half years. But its return now is far below its category average. Now whether it is advisable to continue this SIP or discontinue and start an SIP with Mirae/HDFC.
Thanks and Regards
Raveendran
Dear Raveendran ,
1 year is a short period to evaluate a good fund’s performance.
Personally, i have made investments this fund and continuing with it for some more time.
Hi Sree
How long should I invest in SIP.?Is there a minimum time duration for it?
Can I stop the SIP at any point of time?
Is there any penalty if I break the SIP?
Suppose if I’m taking a monthly SIP 5000 for 3 years.There is individual lockin period for each investment.So if I’m stopping my SIP after 3 years doesn’t it take overall 6 years to finally get the full returns of what I invested.So if I have a short term goal I need to wait 6 years instead of 3 years.Is it correct?
Dear Vishnu,
You can stop SIP anytime.
Generally there wont be any minimum duration, but some MF online platforms can have their own minimum duration say 6 months or so.
No penalty for discontinuing the SIPs.
The units allotted under each SIP are locked for 3 years. The first SIP units can be redeemed in after 3 years and so on…
Hi Sreekanth, Hope you are doing good!
I wanted to invest 10000/- per month in tax saving funds to avail tax benefits, please suggest suitable funds and if I required to distributing amount into multiple MF’s? If yes, how would I distribute my investment amount and invest in multiple MF’s?… Thanks Amar
Dear Amar,
May I know your investment objective and time frame?
Hi Sreekanth,
My short-term objective is tax-saving and time frame could be 5 years (Or you can suggest best time frame where i can get good returns).
Dear Amar,
Kindly read this article : How to create a Solid investment plan?
Hi Sreekanth,
Thanks a ton for the article. I am 36 year old professional with two kids. i would b needing a corpus of around 30 lakhs after six years and further 50 lakhs after 14 years.
I am a late beginner. I have a monthly disposable income of 15K at present.
While i am aptly covered for my tax benefits under 80C, I am more concerned about generating above corpus with medium to low risk.
I was contemplating 5k each in Franklin india tax shiled, Birla Sun life tax plan and Canara Robeco (All ELSS).
is it the righ approach or should i diversify in MF’s too.
Kindly advise.
regards.
Dear Shweta,
If your 80C is done with, you may consider regular Equity funds.
Kindly read:
Best Equity funds to invest in 2017.
Kids’ Education goal planning & calculator.
Retirement planing ..
Thanks Sreekanth,
Would come back in case of any further querry.
Thanks & regards,
Shweta
Hi Sreekanth,
I was trying to buy MF’s online through MF utility as suggested by you in your article Direct buying…
however, i feel a lill intimidated by CAN and KYC. I have bank accounts where KYC is submitted.
i have never bought but one MF of KOTAK Mahindra some 8 years ago.
i am a regular tax payer. Am i elligible for opening a CAN?
Am i already KYC compliant or not?
CAn i not buy without having a CAN?
will my private financial credentials be protected in using platforms like MF utility???
If i want to start tomorrow, what are the hurdles??
Sorry for the volley of questions but kindly help…
thanks & regards,
Shweta
Dear Shweta,
Getting CAN is mandatory to invest through MF U platform.
You can check if your PAN is kyc compliant for MF investments through online,
MFU is a mutual fund industry sponsored platform.
Kindly note that it is a suggestion and not a recommendation to use MFU.
Hello Sreekanth,
I went by your your advise to invest in one ELSS and rest in MF’s as per your ranking. Time to register in MFINDIA was a bit too high so opted for creating portfolio’s in individual MF sites.
kindly advise if in the current scenario investing in Debt mutual fund would be advisable. Also is there a facility of SIP in debt funds??
thanks & regards,
Shweta
Dear Shweta,
Yes, SIPs can be set up in Debt funds too.
Investing in Debt funds? – It depends on your investment objectives & goals.
Kindly read:
Types of debt funds.
Best Debt funds.
Hello Sreekanth,
Is it a fact that investing in new MF’s (NFO) yields better returns than investing in old MF’s.
Just an off track querry…
is there any merit in the above theory?
regards,
Shweta
Dear Shweta,
I will call it as a MISCONCEPTION and not a fact 🙂
Hi Sreekanth,
I am a person concerned about saving money, so I am worried about saving some on tax. Honestly, I have no idea on how to save on tax. I would like to invest 10K every month for next 5 years. All I need is a policy or plan covered under 80C and just need the money (with even minimal interest rate) after 5 years for my child’s education. I read that ELSS is covered under 80C but again I don’t know ANYTHING about these. I request you to help me with your suggestion on choosing any investment plan.
Thanks, in advance.
Dear Gopalakrishnan,
If safety of capital, besides tax deduction is your requirement then you may consider Bank Tax Saving FD for 5 years. But do note that the interest income is taxable income.
Read:
List of investment options.
Tax treatment of various financial investments.
Hi Sreekanth,
Very useful and knowledgeable article on ELSS. I invested lump sump amount of 5000/- in Axis LTE in Nov 2014 and never invested again after that and now in Dec 2016 the value of my investment(after 2 years ) is just 5386/- . So want to understand how it works, does that mean at the end of 3 years or 5 years my investment’s value will be as per the return %age that time? Doesn’t it more like investing in stock provided this is more safe and diversified and after 3 years i should keep checking the highest point of my ELSS to withdraw my money?
And what about lock period, if i start SIP of 1000/- per month in Jan 2017 so the lock period of Jan investment will be till Jan 2020 but lock period of consecutive months will increase with every month so investment of Feb 2017 will have lock period till Feb 2020, so when exactly my lock period completes and i can withdraw my complete money?
Also, all the above ELSS mentioned have low risk grades so are their any high risk ELSS with good returns over long period so that i can diversify my investment in high risk and low risk ELSS?
Please forgive my understanding if i am wrong as i am new to this, kindly explain the above points.
Dear Deepanker,
Withdrawal decision – It depends on your investment objective and financial goals.
Your understanding regarding SIP in an ELSS fund is correct.
Axis LTE is one of the best elss fund. The other funds being Franklin Tax shield, DSP tax saver or Birla Tax plan.
Hi Sreekamth
I’m a newbie to ELSS. Right now i’m considering this for saving tax and since it may offers more interest i’m interested in ELSS other than any other tax saving options.Its already December ans only a few months remaining for the financial year 2016-2017 to end,so i need to invest it any ELSS soon to save tax.I need to show ELSS investment around 60000.Which would be best ELSS to take up now.I’m interested in SIP investments but not sure now i can do it.Provide your comments please.
Dear Vishnu,
ELSS offers you tax saving but kindly do understand the risks associated with an equity fund and then take final investment decision.
You may consider Franklin Taxshield or Axis LTE or Birla Tax plan, remain invested for at least 5+ years.
Thanks Sree but now since i want to show around Rs.60000 as my ELSS investment for FY 16-17 dont you think i’m already late for SIP investment.I can invest around only 5000 pm if opting for SIP.
I’m considering two options now.
1.Invest a lump sum of around 1 lakh in a tax saving ELSS now,So that i can use it for FY 16-17 for saving tax.
Or
2. Open up a tax saving FD of 1 lakh with my bank now,So that i can use it for FY 16-17 for saving tax.
Then start an ELSS SIP of around 5000 pm from April 2017 .
Which do you think is better option? If you have any other options please suggest.
And thanks Sree i understand the risk is there and i’m planning to invest for a longer duration.
Dear Vishnu,
As you are investing for longer-duration, you may invest in ELSS fund may be in 2 to 3 installments manually (in the same fund) over next 3 months.
From next FY you can create a fresh SIP under the same fund folio number.
Kindly read:
Think beyond Taxes when investing!
How to create a solid investment plan?
Just to get things straight..You are suggesting me to invest 60000 as 3 installments of lump sum (20000 each)in Jan,Feb,March of 2017,so that I can show it for saving tax for the current financial year.Then from April I can start a fresh SIP . Is that you suggested?
Dear Vishnu ..The suggested three installments can be made in one month itself depending on the market conditions (if you track them).
How can i track it ?
Hi Sree
Thanks for the suggestions ,but while checking out last 1 year performance i came to know that
HDFC Long Term Advantage Fund and DSP BlackRock Tax Saver Fund performing better than Franklin Taxshield or Axis LTE or Birla Tax plan.
Whats your opinion on these two funds?
What would be your pick among these considering the following parameters.Sort it if possible.
Duration : 5+ years
Current performance
Moderate Risk
Least Volatility
Also in some tax funds,example Axis LTE, there is two options Direct and Regular.What is the difference and which one should i opt as i’m a beginner
Dear Vishnu,
The listed funds are good ones.
But, when reviewing their performances, advisable to analyze the track record for the last many years say 5 or 10+ years.
Based on the abv parameters, I would pick Franklin Taxshield.
Read:
What are direct plans of MF schemes?
Direct Plans Vs Regular plans – Comparison of returns.
Hi Sreekanth,
I am planning to put a lump sum of Rs. 35,000 in an ELSS fund for tax saving. I am NOT planning to withdraw this amount any time in near future (not atleast for another 3 years). What would be the best ELSS fund for this lump sum investment?
Thanks,
Alex
Dear Alex,
You may consider Franklin Taxshield fund.
Thanks Sreekanth for your input. However I had DSP BlackRock Tax Saver Fund in mind. What do you think about it? I will look into Franklin Taxshield fund as you suggested.
I m 32 years old and invest in SIP rs 2000 per month in sbi blue chip(G)fund.Now I want to invest in Elss please suggest me which elss fundis suitable for me?
Dear sunny..Kindly read : Best Mutual Fund Schemes for 2017.
Hi Sreekanth,
This is Adnan, I am 29 years old and have been doing investments in ELSS from last 2 years.
Last year I had invested Axis long term equity, BSL Tax saver and Franklin India Taxshield.
Prior to last year I had just invested in ICICI long term equity.
I m looking for investing in ELSS for this year as well so as to save taxes, kindly guide.
Dear Adnan,
Investing in multiple funds from same fund category many not be really beneficial.
You may invest in any of the three existing funds for this Financial year.
Kindly read:
MF portfolio overlap analysis tools.
Dear Srikanth sir,
I will be retiring in next 4 years, can you kindly suggest an investment plan that gives me tax benefit as well as some decent returns after 4 years. One time investment or monthly investment which is better
Thanks
Devakumar
Dear Devakumar Ji,
Are you going to withdraw this investment after 4 years? Are you going to be very dependent on this gains/income generated on this corpus after 4 years?
May I know your financial obligations (if any)?
Kindly go through this article : Retirement goal planning & Excel Calculator.
Hi Sreekanth, This is Shivam agrawal. I am 26 years old. I am planning to invest in ELSS. Initially, I was planning to invest in Axis Long Term Equity Fund but, after looking at the last 1 year performance of this fund. I am confused now. Whether to ahead with this fund or Shall i consider other ELSS fund like franklin tax shield or DSP Blackrock tax saving. Could you please suggest me which fund will be the best to invest in.
Dear Shivam,
1 year can be a very short-term to judge the performance of a fund. Personally, I have also invested in this fund and would wait for some more months (may be 1 more year) to make a SWITCH.
Hello Sir..i want to plan and invest for future goals. My age is 28 years currently earning Rs. 48000 pm. Till now I have been saving only in bank FDs. I can save Rs. 20000 pm with annual increase of 10%. I will need 50 lakh inflation adjusted after 5 years. For this I want to save by investing preferably in ELSS fund. Furthermore another 50 lakhs after 18 years. And my another goal is to build a retirement fund. Almost 32 years are left in my retirement. I will need 3 crores after retirement again inflation adjusted.
Kindly suggest me some investment options where I will get most tax benefits and achieve these financial goals at the same time. Thank you.
Dear Kumar,
Kindly use the calculators available in the below articles to arrive at avg expected investments that need to be made to achieve your goal amounts;
Retirement planning & calculator.
Kid’s Education goal planning & calculator.
You can consider investing ELSS fund (for accumulation + tax saving), one diverisified equity fund and in one mid-cap oriented fund for long-term goals.
For 5 year time-frame – you can consider investing in an equity oriented balanced fund + MIP Fund.
Kindly read:
How to select the right mutual fund scheme?
MF Portfolio overlap analysis tools.
Best Equity funds
Best balanced funds
Best MIP fund.
Axis Long Term Equity Fund – Regular Plan and Direct plan whats the difference?
got it from .. https://goo.gl/9vpDOf
Dear SreeKanth,
I have started my SIP in Axis some 6 months ago. Given the market condition, I am thinking to do the lumpsum investment for 80C. Axis long term equity has given my -9% return till date. Do you suggest to do the additional lumpsum in Birla tax plan or still in Axis as last 1 years has seen sudden drop in Axis ELSS.
Dear ramesh,
Yes, the last one year performance is not up to its standard. But, if you see its performance for the last 5 years or so, it is still decent. Personally, I am still with this fund and investing in this FY too for my tax saving purposes.
Birla Fund is also a decent option.
Read: MF Portfolio overlap analysis tools.
Respected Sir,
I am new investor to invest in ELSS and i all want to know which sip is best among franklin tax sheild and Birla sun life tax plan.
reviewed your article and found it best to avail tax exemption.
reply as soon as possible
Dear Madhu,
Both are good ones and are consistent performers.
You may compare the two funds based on the risk ratios and try to decide by yourself.
Kindly read: How to compare & select the right mutual fund scheme?
Hi Sreekanth
This article is helpful. I am planning to invest on ELSS to save tax, can you please suggest me on the following this as i am fairly a new-bee in mutual investments area
1. Right time to invest(can I start doing now or start of next financial year is better?)
2. After a bit of reading I realized Birla sun life Tax relief 96 is a good option to go with- can you please guide me right on my observation?
Thanks lot in advance
Dear Madhuri,
1 – Any time is good time to invest for long-term.
2 – It is a decent one. You may consider it.
Dear Sreekanth,
what is your openion on mutual funds with insurance component attached? for ex Reliance SIP insure, or Birla SL Century SIP or UTI – unit linked insurance plan. these are not ulips but mutual funds with insurance component attached to it. Are they worth buying? Kindly give your valuable openions please.
regards
RAJ PAI
Dear Raj,
Personally, I would like to keep insurance and investment separate.
THANK YOU SO MUCH FOR YOUR ANSWER.
REGARDS
RAJ PAI
Dear Srikant,Give your opinion on DSP Tax saver fund.It has given 20% return in last one year, outperforming peers and benchmark BSE 500 index
Dear Dr Bansal ..It is a decent fund. This year’s performance is good.
Hi Sreekanth,
Once again, I need your trusted advice.
I seek to invest total 2 lakhs in lump sum into ELSS funds for tax saving AND wealth creation.
( I already have MF SIPs of 20000 per month across suggestions I previously sought from you)
I am looking at a 3 year period.
Please advise which scheme would be the most apt.
Please also advise if all 2 lakhs should go into one scheme or should it be across 2?
Also, once the 3 year lock in period is over, one option is to withdraw all the wealth.
In case I choose to stay invested, how does withdrawal work after that and how should I best decide if to stay invested and how much longer to stay invested.
Thanks very much!
Gaurav
Dear Gaurav,
The time period, you got to say 🙂 , it depends on your financial goals, am I right??
If you NEED this money in 3 years, bit hesitant to suggest an ELSS fund.
Thanks for the revert Sreekanth. In that case, how best do you advise to invest this lumpsum- for 3 years? (with or without tax saving)
And in case of ELSS, if I am very interested in investing there, what is the time period you suggest and what are the funds which I should invest in?
Please guide.
Dear Gaurav,
My point is if you compulsorily need this money in 3 years, its a high risk game as ELSS are equity oriented funds.,
If you can afford to take risk then you may consider Franklin Tax shield fund.
Hello Sir,
I am planning to invest for 5 years of amount 6000 in three funds (2000 each) so can you please suggest the good performing funds ?
Can i go for Birla Sunlife Tax Relief 96 , Mirae Asset Tax Saver and Franklin India Tax Shield funds, also i am planning for good return funds after 5 years. Please do suggest… Thank you in advance!
Also please let me know how to go for Direct plan.
Dear Deepthi,
You may opt for one tax saver fund, can be Franklin tax shield fund. Kindly note that units allotted under each SIP have a lock in period of 3 years.
Read: MF portfolio analysis tools!
Hi Sreekanth,
NICE ARTICAL.
MY AGE IS 33
AND I AM INVESTING 3,000 PER MONTH IN DSP BR TAX SAVER FUND AND 3,00 IN RELIANCE TAX SAVER ELSS FUND AND 3000 IN ICICI PRU LTE FUND FOR LONG TERM (15 YRS)
SO I JUST WANT TO ASK IS ALL ABOVE FUNDS ARE GOOD FOR LONG TERM INVESTMENT.
THANKS.
Dear Sanman,
Kindly check the portfolio overlap among all these funds. If the overlap is on higher side, you may continue with ICICI Fund or DSP fund.
Hi…I want to invest in a SIP in ELSS. Can you please tell me how the returns will be tax free in case of a SIP. I know there is a lockin period of 3 years for lump slump investment. But how will it work for a SIP of say 5k per month for a 5 year period.
Many Thanks!!
Dear Nikhil,
Units allottted under each SIP are locked for 3 years. ELSS are equity oriented funds, so any gains made over a this period are tax-exempt at the time of redemption.
Kindly read: Taxation rules on MF redemptions.
hi..i want to start SIP for future goals. I will need 2.5 crores after 20 years. for this i have planned to start SIP of 9000 per month. And i will increase this sip amount by 10% every year. I also want to save tax by investing in ELSS fund. And my another goal is to build a retirement fund. Almost 30 years are left in my retirement. I will need 3 crores after retirement. For this i can deposit 2000rs in SIP in some MICRO CAP fund. And i will increase this amount by 6% every year.
Kindly suggest me some best elss and micro cap funds. Thank you.
Hi Sreekanth,
I want to invest a lump sum amount of 1 lakh under ELSS scheme for tax saving. My time horizon is 5 years. Could you suggest few schemes for me to invest?
Also, how is mirae tax saver fund and jeevan labh?
Dear Devansh,
If your objective is to save taxes + accumulation in 5 years, you may consider Franklin Tax shield fund and ignore LIC jeevan labh plan.
Kindly read : My review on LIC Jeevan Labh Plan @ http://www.relakhs.com/lic-jeevan-labh-plan-table-no-836-features-review-returns-calculation/
Dear sreekanth sir,
I am an average earning person and hence want to have decent money after 20-30 years period as my age is 25. I have shortlisted AXIS LTE FUND, SBI BLUECHIP FUND and i am not able to select between Mirae AE Bluechip fund/Franklin India Taxshield Fund and i wish to invest Rs 1000 in all of the three.Please guide of the pros and cons and suggest me any other proper way of tax and money gain over longer terms.
in SIP mode
Dear MANISH,
You may consider Mirae Emerging bluechip along with Sbi Bluechip fund and you can choose either of the ELSS fund for your tax-saving cum accumulation purposes.
Kindly read below articles:
1 – How to select the right mutual fund scheme? @ http://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/
2 – List of income tax deductions for AY 2017-18 @ http://www.relakhs.com/income-tax-deductions-fy-2016-17-ay-2017-18-tax-exemptions-benefits-rebates/
Dear Sreekanth, i would like to invest one lakh each to two ELSS funds. Is this a good idea to go for lump sum investments in ELSS?
Dear Sunbil..May I know your investment horizon (time-frame)??
Hi Srikanth
I have no experience in Equities, MF..etc., so requesting your suggestion.
I would like to invest in ELSS – Mutual Funds, which can give me better returns in long term and usable for tax exception(80c) now. Please suggest any better performing MF schemes.
BTW I contacted Icici bank staff, they suggested “wealthBuilder – II”, “ICICI Pru MAXIMIZER”, “ICICI pru Value discovery fund”. Any suggestions or pros and cons of these funds.
Also please suggest any other bank’s funds which can perform better than above.
Thanks in advance.
shastry
Dear Shastry,
The first two ones are ULIP (Unit Linked Insurance Plans) products. If your requirement is long-term wealth accumulation you may consider investing in ICICI Value discovery fund. But this fund is not eligible for tax deduction u/s 80c.
For tax saving + accumulation, you may consider any good ELSS fund. Ex- Franklin taxshield / Axis LTE fund / Birla tax relief etc,
I am 36yrs IT employee. 2 daughters. I can invest 5000 per month for long time. My goal is child education after 15years. Can you please suggest the BEST equities.
Dear Shastry,
Kindly read this article : Kids’ Education goal planning & calculator.
Equities – do you mean by Shares? If yes, I do not provide suggestions on Shares.
Thanks a lot for your kind reply Srikanth,
I was requesting your suggestion on MF only.
I am 36 years old, have 2 daughters. My long time, short time goals are
1) 3-5 yers – own house
1) 12-15years – child education.
2) 18-20 years – Child marriage.
2) 25 years – retirement.
Please suggest best performing MF apart form ELSS and not ULIPS..
Dear Shastry,
For short term goals you may consider – Debt funds / MIP Funds.
For medium term goals – Balanced funds + Large cap funds
For long term goals – Diversified equity funds + Mid/Small cap funds.
Kindly go through below articles;
How to create a solid investment plan?
My MF portfolio for my goals!
Best Equity funds
Best Debt Funds
Best Balanced funds
Best MIP Funds.
List of best investment options.
Hi Srikanth,
How are you doing. After a long time I am writing to you.
I have a question. I am investing in SIP(3000/month) in ICICI prudential – Focused Bluechip Equity – Growth fund since Feb2015. As of today status is like this. NAV* = 32.27; CostValue=60000; currentValue=66774;
Gain/Loss (Rs.)=6774; Return (XIRR)=13.26%; *Cost value includes Dividend Reinvestment.
When I compare to RD interest it seems it is good. but I am not sure how this is performing. Should I keep investing in this SIP or switch to any other portfolio. This is the only one equity I have among all other investments like FDs,PPF,NSC. Shall I consider purchasing a new one or should I change this existing to other. or both.
Please suggest.
Thanks
PRadeep
Dear Pradeep,
13% for a period of less than a year is very good 🙂
Kindly stay invested for long-term and keep a track of your Portfolio’s performance.
Read: Why one should avoid investing in FDs/RDs for longer period?
Thanks for you reply Sreekanth. Not less than one year, Its 20 months. Today return XIRR is 10.75%. It fallen down from 13.24 to 10.75. Can I stay invested. How many years of investment in this scheme can give be better results? could you please also share the best tax saving schemes for a period of 5-6 years.
Dear Pradeep,
Invest & forget may not work with Equity oriented products. You need to keep a track of the portfolio performance. The longer the time-frame, there is higher probability of getting decent returns.
You may consider Franklin Tax shield or DSP tax saver or Axis LTE.
1.I am a retired person.My age is 64 years.I have some tax liability due to FD`s in banks.Around 60000 is my tax liability.Under these circumstances,which tax saving mutual fund will be better for me??
2.Can i withdraw as soon as the lockin period is over?
3.If i invest this year under lumpsum investment,i believe this can be shown in my return only for the next assessment year only??
Dear Mohan Ji,
1 – Besides ‘tax saving’ may I know what is your investment objective for selecting Equity Tax saving funds (ELSS).
2 – Yes, you can withdraw after 3 years. If SIPs, units allotted under each SIP are locked for 3 years. Do you need this money after 3 years?
3 – Yes.
Can I take term plan from multiple insurance company.
Yes, one can take multiple term plans (but life cover eligibility depends on the income & profile).
Hi Sreekanth,
Planning to invest 5000/- a month in Birla Sun life Tax ELSS fund for 15 years. Is it a good move?
Apart from this i plan to take a term insurance. Do not have any other investments as of now.
Kindly suggest
Dear Ramya ..You may kindly go ahead.
Read: List of articles on Personal Financial Planning!
Thanks Sreekanth.
I have a confusion. Which one to go for for a 15 year investment?
Birla Sun Life Tax Plan (G) or Birla Sun Life Tax Relief 96 (D)??? Which is better of the 2?
Please advise.
Dear Ramya,
You may pick Birla Sun Life Tax Plan.
But both the funds have been performing consistently well in the last 10 years or so.
Dear sreekanth,
I stareted elss sip with dsp since u found it to be old and still giving consistent returns.
Can u tell me uf my choice is good.
It is a decent fund dear sagar ..You may stay invested.
Sreekanth,
Would you suggest me go for lump sum when markets are down or fixed date sip.
As i think manually done investment can be more beneficial to take advantage of market corrections.
In that case will i get tax benefits under 80 c or i need sip for that.
Regards,
Sagar Desai.
Dear Sagar,
Personally I too follow similar strategy ie., SIPs + additional investments manually when markets are down, in the same existing Funds.
Lump sum or SIPs in ELSS funds can be claimed as tax deductions u/s 80c.
Kindly note that units allotted under each SIP are locked for 3 years.
Hi,
I am new to MFs. I want to invest purely for tax saving purpose. I read your article about 6 top MFs for 2016.
I’ll be choosing any one from them. Thanks for the informative article.
I have few questions.
1) I am also looking at “Escorts Tax Plan – Direct Plan (G)”. Can you please let me know your opinion whether it’ll be good option or not?.
2) my 2nd question is about Liquid MFs. Is there any entry and exit loads in these MFs and what about lock in period.?
3) what are top Liquid MFs to invest in 2016.
Thanks in advance.
Regards,
Syam.
Dear Syam,
1 – one ELSS fund can be more than enough.
2 – No Exit or entry loads and no lock-in period.
3 – Almost all top ones do give similar returns. You may consider Birla Cash plus, HDFC liquid, or Franklin Treasury mangnt fund etc.,
Hi Srikanth,
Thanks for the info.
In first question i was actually asking your opinion about “Escorts Tax Plan – Direct Plan (G)”. Is this fund is good choice or not?
Thanks in advance.
Regards,
Syam.
Dear Syam …I do not track this fund.
Excellent article. Thanks. I was thinking about starting Jeevan Labh policy of LIC. But, now I will invest in mutual funds. One thing is problematic that the money if required suddenly, cannot be withdrawn.-Dr. Aloke Gupta,Asst. Professor.
Dear Aloke,
The units under ELSS funds are locked for 3 years.
Whereas other equity oriented funds do not have this clause. You may withdraw the units anytime.
However, you are advised to consider equity oriented products for your long-term goals.
Read:
My MF portfolio.
Best Equity funds.
How to pick right mutual fund scheme?
Dear Sir,
I want to invest @ Rs. 5-8 Thousand per month through SIP for 8-10 yrs. I already have PPF for full tax limit of Rs. 1.5 lakhs and my proposed investment is NOT for Tax rebate purposes. I would also stay invested for 10 yrs without withdrawal.
I am told that HDFC Click2Invest is very good but its a ULIP. I have already taken a Term Insurance and do not require further Insurance cover.
Will then ELSS be better ? Can you suggest the best ELSS for it ? My investment purpose is to get maximum return after 8-10 yrs, of course with some security of money. Should I go for HDFC Click2Invest or which ELSS ?
Dear Amoghm,
If tax saving is not one of your investment objectives then you may consider investing in regular equity oriented funds, like Diversified equity fund, balanced equity oriented fund or mid/small cap funds.
Kindly read:
Best Equity Mutual Funds.
How to select right mutual fund scheme?
MF portfolio overlap analysis tools.
My MF portfolio!
Hi Sreekanth,
First of all a big thanks for your wonderful write up. I have a doubt in investing ELSS Tax savings in the current market.
Already I am doing 3000 INR pm SIP in AXIS Bank LTE- Growth ELSS.
Currently I am planning to invest 40K INR (lumpsum) into ELSS Tax saving(80C) funds. Kindly suggest some ELSS funds with good returns in current market situation.Investment period 3 to 5 years.
Also should I invest 40K in a single ELSS fund or should I invest into more than 1 funds ?
Please suggest.
Thanks in advance,
Rakesh Sekar
Dear Rakesh,
You may invest in the same fund (Axis LTE).
You may invest in 2 to 3 installments on the days when markets are down, in the next couple of months.
Thanks for the swift response Sreekanth. Much helpful.
Thanks Again
Rakesh S
Will I get 100% TAX-FREE income after lock-in period?
Dear ksundar ..Yes. The units in Equity funds if held for more than 12 months, the gains (if any) are tax-exempt.
Read: MF taxation rules.
Is it necessary to invest in separate folio for each year for tax saving mutual fund or in the same folio .C
Dear CRK Rao,
No, it is not necessary. You can invest with the same Folio number.
Dear,
Each SIP should be locked in for 3 years or the total duration in ELSS should be 3 years?
Dear Arun ..The units allotted under each SIP are locked for 3 years.
I want to invest in tax saver . so please suggest a fund .
hi sreekanth
1) i have invested a lump sum amount of 56000 thousand in reliance tax saver dividend fund and getting rs 1440 as dividend every quarter, it have been 7months from my investment. i will see till lock in period of 3yrs and further to withdrawal. UN till i get good value.
2) in your artical you mention dont opt for divedent what is the problem
3) can u tell me how the dividend is calculated
4)what will be the difference between sip and investment at a time once in a year
5) you have not suggested any reliance elss fund to any investor , what is the problem with this fund(please give me merits and de merits of this fund)
6) i should invest some amount this year also for tax exempition, shell i continue with same fund or opt for other fund
Dear subbarao,
If your invested fund is not listed in the above list, it does not mean it is bad.
There are plenty of good funds, it’s not possible to list all of them here.
If your investment objective is to accumulate long-term wealth, then its better to opt for GROWTH option than to receive dividends.
In the above article, I have mentioned about this fund – “Reliance Tax Saver has been performing well for the last few years. Kindly note that this fund has one of the highest Standard Deviations in ELSS fund category. It has HIGH risk grade.”
Kindly read: How to compare and select the right mutual fund schemes?
I want to invest 50000/- lump sum in two funds(50:50) ELSS for tax saving and good returns. my time horizon is 5-10 years.kindly suggest two diversified funds.
thank you
Davinder
Dear davinder ..You may consider Franklin Tax shield & ICICI LTE.
hi sreekanth, i am laxman i have one sweet daughter am interested in mutual fund investment, i think sip’s is good platform to investment in mutual fund industry. can u suggest me which one scheme are good to invest & good returns for my daughter higher education.. i am salaried parson,, sip amount is 2000pm
Dear laxman ..May I know your investment time-frame??
Read:
Kid’s higher education goal planning & calculator!
Best Equity funds.
How to select right mutual fund schemes based on Risk ratios?
Important articles on key aspects of Personal Financial Planning!
Hi Sreekanth,
I am planning to invest around 5000 per month in 5 different SIP’s of 1000 each. I want to invest in ELSS for tax planning/exemption purpose plus to generate some nice returns over the period of long term let’s say 7-10 years.
And I want to invest in diversified funds so that i can avoid portfolio overlapping of these funds for ex Axis Long Term Equity and Birla Sun Life Tax Relief 96 both funds have portfolio overlapping of around 35 %, and both funds invest in almost same stocks.
I want my investment to be diversified in nature so that it can be invest in different segments like large, mid and small caps etc. so that i can get some nice returns for same.
Can you please suggest me some nice funds in different segments which can fulfill my criteria. Or Is there any other way of investing in something else to achieve my goals as mentioned above.
Thanks a lot in advance.
Regards
Vijay
Dear Vijay,
You may add one Large cap fund + Mid-cap fund + a balanced fund to your portfolio.
Ex – ICICI Focuse bluechip/Birla frontline + HDFC Mid-cap / Mirae Emerging bluechip + TATA balanced fund.
Read: How to select the right mutual fund scheme based on risk ratios?
Dear Sreekanth,
I have saved around 16 lakhs and I am just 28 years old. Please suggest me regarding the investment of the same. What is the best way to invest 16 lakhs so as to get maximum tax benefit along with handsome returns?
Regards
Dear Arun ..May I know your investment horizon (time-frame)??
Read : List of best investment options.
Dear Sreekanth..I have good fixed monthly income as I am central govt employee. This 16 lakhs amount is my saving from previous employer and I have kept it for emergency circumstances only. Till now I was investing this amount in FDs every year but seeing the lowering trend of FD’s interest rates, I am planning to switch to other instruments. So, I am unsure of my investment horizon, I may or may not be requiring this amount for coming many years.
Also Sree, I am NPS Tier-II contributor, I have one query related to it too that whether the tax on withdrawal will be levied on ENTIRE withdrawal amount or only on PROFIT/GAINS of Tier-II account.
Thanks and regards
Dear Arun,
As you are unsure about your invstment horizon, suggest you to set up Systematic Transfer plans and consider investing in a combination of MIP fund + Balanced fund + Large cap fund. (MIP- you may invest some lump sum amount)
STP : From a liquid fund to Equity fund (within same fund house).
Yes, the withdrawal amount is subject to taxes.
Read : Why NPS is not a great investment option?
Thanx a lot for your valuable recommendation, Sreekanth! I need to study STP and related facts.
Regarding NPS Tier-II, it means that I will be eroding my principal too gradually. If I invest say 1 lakh in Tier-II and withdraws it after an year, after tax liability (considering an avg return of 12% & my tax slab of 20%), the in-hand amount will be even lesser than principal. Is this a case? and if yes, then why the scheme has not been improved upon by regulators of NPS. Taxation should only be on Gains. What is meaning of investing in a scheme where the money is depreciating with time instead of appreciating.
Dear Arun..That has been the argument against NPS. Kindly note that the taxation is as per the current laws, which may change in the future. Let’s see.
Also Sree, How can I make this STP, suggested by you, totally tax free as there is taxation on both short and long term gains from MIP, balanced funds is purely tax free if held for more than 1 year and what about large cap? are large cap funds too non taxabale if held up for more than an year?
How can MIP be profitably substituted if my investment horizon for STP is 1 year..?
Dear Arun,
Kindly read: MF taxation rules!
Dear Sree,
the gains from MIP is taxable even if held for more than an year? is it a equity or nonequity fund?
Dear Arun,
Yes, MIPs are considered as Hybrid oriented Debt Funds and applicable taxes need to be paid on Gains.
Read: Mutual Fund taxation rules.
Dear Sree,
How is the transferred money from liquid fund to equity fund under STP will be taxed or charged ?
Dear Arun ..The STPs are treated as normal redemptions. So, if the units of liquid fund are held for less than 36 months and transferred then STCG taxes will be applicable.
Hi Sreekanth,
Am having Axis Long Term Equity Fund for past 1 year in a SIP of Rs 1500 pm. Now i want to add 10k to the ELSS. Shall i go with the same fund or have another ELSS in Franklin India Tax Shield ?
My primary aim is tax saving for 80C.
Thanks
Vijay
Dear Vijay ..You may invest in the same fund.
Kindly read:
Think beyond TAXES when investing!
Tax treatment of various Financial instruments.
Hello Sreekanth,
I am planning to invest in ELSS Mutual funds SIP.
I am planning to invest 7500 to 8000.
Also planning to invest in the beginning of the month one sip on all mutual funds, middle of the month one sip on all mutual funds and end of the month of the month one sip on all mutual funds..
for ex: if i want to invest in axis LT tax saving fund 1500 per month. I will split 1500 into three sip’s as follows,
between 1 to 10 date of the month 500 sip
between 11 to 20 date of the month 500 sip
between 21 to 30 date of the month 500 sip
is this good method to follow or only one sip any day of the month is good.if so suggest better dates to invest sip every month.
Pls suggest which are all mutual funds from the below list can I invest and how much i can invest on each as per ur selection:
Axis Long Term Equity
Birla Sun Life Tax Relief 96 D
Franklin India Taxshield Fund
ICICI Prudential Long Term Equity (Tax Saving)
Reliance Tax Saver (ELSS) Fund-G
BNP Paribas Long term 23
DSP BlackRock Tax saver
Sundaram Taxsaver D
HDFC Taxsaver Fund
Dear Hariharan,
If you are investing for long-term, it does not matter much on which day of the month the SIP is..Do we really know if markets will perform well or do not perform well on say 10th of the every month? So, suggest you to kindly do not worry about the dates..
You may select one or two ELSS funds.
Read : How to compare and select the right mutual fund scheme?
Hi sreekanth,
Can you pls suggest two or three best ELSS sip funds to invest for long term goals… I’m planning to invest 7500 to 8000 per month..
Hi Srikanth,
I have started investing in uti midcap fund through sip since 11 months.. Now I want stop the sip and will create new sip in mirae asset emerging blue chip fund.. Please let me know your views..
Dear Gangadhata ..May I know the reason? Also, what is your investment horizon?
Above 10 years us time horizon, Mirae asset emerging blue chip is doing well than uti mid cap.. So… Do you want me to continue the uti mid cap.
Dear Gangadhara ..Personally I have been investing in UTI mid-cap and happy with its performance. As long it meets my expectations, I do not compare with other peers (funds) and churn the portfolio.
But kindly note that the Fund manager has been changed, so let’s track its performance for some more months.
Dear srikant sir,
For tax benefits, I hv invested in following Tax saving fund are
1. Axis LTEF – Rs 2000
2. ICICI LTEF- Rs 2000
3. HDFC TAX saver- 1500
4. Canara robeco tax – 1500.
Whether above funds are good for future. May I sustain with above fund?
Can you suggest good return tax savings fund, else these mentioned above for investing Sip of Rs 3000 pm
Dear Dheeraj .. one or two funds are more than enough (tax saving category).
Kindly read :
MF portfolio overlap analysis tools.
How to compare two mutual fund schemes?
Hi Shree,
I have already invested in Reliance ELSS MF for rs 1500. I am planning to invest more on any other bank. the main reason for me to invest in this to reduce my Tax deduction. I have two queries over here.
1) Please suggest me a good bank where i can invest in MF.
2) Please suggest me some other policies where i can invest my money which does not have the concept of “Interest” as it is against my Shariya.
Thanks a lot in advance!!!
Dear shaher,
Kindly think beyond taxes when investing! Tax saving should not be the sole criteria when selecting an investment avenue.
Kindly read ;
Think beyond Taxes!
Tax treatment of various Financial Instruments.
The returns are as good as ‘interest’, am I right?
You may consider funds like TATA Ethical fund etc., (this is not a tax saving MF)
SIR
THIS IS MOHIT WHEN I WENT FOR ONLINE RELIANCE ELSS MF I COMLETE ALL THE THINGS AND AT LAST HE ASKED TO ADD ME FOR AUTO DEDUCTION FROM THE BANK ,I DID THAT AS WELL AS I CREATED MY ID BUT NOW NO FUND IS DEDUCTED FROM BANK ACC. AND NOT DEPOSITED TO MY MF ACC. AND MF ACC. SHOWING INVEST NOW. WHAT SHOULD I DO. PROCESS AND SCHEME WHIC I ALREADY FILLED AND DID IS OK OR IT WILL TAKE MORE TIME TO DEDUCT MONEY OR WE DI NOT COMPLETE THE PROCESS I HV TO DO MORE TO COMPLE PLS…. HELP ME
Dear MOHIT ..Kindly check this with the fund house. It takes time to process your online debit mandate.
HELLO SRIKANTH,
after reading ur article now my son and daughter are going to invest in ELSS Axis Long Term Equity Fund.
their investment would be 10000/month.
but after filling the form online and submitting it to the Axis mf my doubt is how will i deposit the amt in IT?
1. do i have to make payment per month by cheque or will the bank automatically transfer amt to my mf.’
sorry i am not very conversant wid online procedure.
could you plz elaborate the process on how beginers like us could make investment in
MUTAL FUND SIP
ELSS
AND other mid cap or MIP-MF
READING UR ARTICLES WE HAVE UNDERSTOOD WHERE TO INVEST BUT…
could u also through a writeup explain the steps to be followed so that we do not mess up or make a mistake while investing…
IT WOULD BE VERY HELPFUL.
THANKING U.
SHASHI KUMARI
Dear SHASHI Ji,
May I know what do you mean by ‘ow will i deposit the amt in IT? ‘? Are you referring to claiming of tax benefits for the investments made in an ELSS fund?
hi sreekanth,
i meant how will i pay my monthgly installments every month.
will it be by cheque which i have to goto axis mf office and drop every month or tell bank to do it
Bank will do formalities for ecs ( electronic clearing system) that is on a date of your choice mutual fund company will automatically deduct from your bank account. All the clearances will be emailed tonyou.
Dear Gaurav / Shashi,
Kindly note that ‘ECS (Electronic Clearing Service) will be replaced NACH (National Automated Clearing House) from 1st April, 2016. NACH is a centralized system which will consolidate multiple ECS systems that are currently available in the country. All banks have to switch to this new platform by 1st May, 2016. So, from May 2016 onwards you have to use this facility instead of ECS. This is applicable to all your Utility Bills, Insurance Premium payments, Credit Card Bills, SIP of Mutual Funds, or in fact any payment, which is recurring in nature. Kindly note that your existing ECS mandates will not be affected. But fresh registration of ECS will not be accepted.’
Dear Shashi,
It depends on how you are investing. If it online platform then auto debit happens, if you are investing through am MF agent then he/she can collect Cheques or ECS mandate form.
Hi Sreekanth,
I am a 30 year old married and plan to have kids soon. For now, I have the following investments made for me and my wife –
1. ICICI Lombard Health Insurance Family Floater Plan of 7L with yearly premium of around 10K.
2. Religare Personal Accident Policy for Self with yearly premium of around 2300.
3. Plan to buy no.2 for my wife as well as she is a regular commuter.
4. Plan to buy Max Term Plan as well soon.
I want to start investing in ELSS and came across Axis LT Equity Fund having good returns and investment portfolio with moderate risks. Signed up with them and looking for investments for more than 4-5 years. Thinking to start with a lumpsum amount of 1000 and then take the SIP route of 1000 per month.
Is that the right way to go ahead and get the maximum return on my investment? Any changes please suggest.
Looking forward to your response.
Regards,
Zeeshan
Dear Zeeshan,
Perfect and simple planning. Kindly go ahead.
Read: List of articles on key aspects of Personal Financial Planning!
Dear Shree,
I have been investing Rs. 3000/- PM in Franklin Tempelton Family Solutions and SBI emerging business fund from last 2 and 1/2 years now I want to increase my investment to get Tax benefit through ELSS and I am considering “Franklin India Tax Shield” for that can you please tell me what is meant by same type of fund since it is mentioned that we should not invest in same type of fund, should I Invest in Franklin India Tax Shield or should I go for some other ?
I want to Invest Rs 4000 – 5000/- PM in a tax saving scheme
I am currently investing Rs 3000/- PM in SIP ” Franklin Tempelton Family Solutions & SBI emerging business
Given my situation please suggest me some Tax saving scheme.
Dear Naveen,
Same type generally referred to as funds from same fund category, say multiple funds from mid-cap space can be avoided as there are high chances of portfolio overlap.
Franklin Tax shield is a good ELSS fund.
Dear Sree
1. How do rate Birla SL Tax relief 96 (direct Plan) wrt birla SL Tax plan, as shown in the Best 6 ELSS ?
2. I have been investing in ELSS of …… Franklin, ICICI, Reliance, Axis, UTI & HDFC. but I find that HDFC and UTI are Not performing as good as Birla. so I want to drop out hdfc and uti, and go for Birla SL Tax Plan 96 ( Direct Growth). Looking for your expert advice please.
3. In addition I have shortlisted SIPs …..such as ….DSP micro, BSL MNC,BSL pure value,Franklin PRIMA, Franklin Build India, ICICI Export and Other services, Reliance Small cap, Reliance Pharma,SBI mid cap, SBI pharma, UTI mid cap, UTI MNC, & UTI transportation. Of course all SIPs to be of Direct Growth type. May I seek your valuable advice on SIPs also.
Thanking you in advance
GS Dhillon
Dear Dhillon,
Since how long have your been investing in the said funds?
Any particular reason /strategy for investing in multiple ELSS funds?
Kindly do not invest in too many funds.
Read:
MF portfolio overlap analysis tools.
How to select right mutual fund scheme?
Dear Sree
I have been investing through Agent wef 2007 .
Now wef 2015 I have started investing at my own, after going through Money control and Value research. Presently commencing to invest in EQUITY direct (Growth) through MF utility.
I am senior citizen and can take Max Risk with an aim to have better return and better tax advantage .
I found your Blog quite good , which expresses / guides with unbiased opinion.
I will be highly obliged if you provide your expert guidance on both the issues mentioned above i.e on ELSS and on SIPs
Thanks
GS Dhillon
Dear Dhillon Ji,
As suggested kindly use the ‘portfolio overlap’ tools and trim down your portfolio.
Dear Sree
I have gone through the portfolio overlap. However Freefincal does not scroll all the Mfs of any AMC and thus finding difficult to reach to any conclusion. Regarding The fundoo com , Its showing error and thus Not available.
Therefore may I seek your personal opinion , as you have already analysed Mf for 2016 .
Thanks
GS Dhillon
Hi Sreekanth
I’m a first time SIP investor. Request your expertise on the best investment option to build a retirement corpus and children education fund. Can stay invested for 10years with min 5k per month.
I already have a PPF account through office and am investing approx. 16k per month in LIC policies .. I know you don’t recommend but I found it to be the safest with tax benefits.
After reading your posts am feeling motivated to invest in a good term plan and regular SIP investment.
Please suggest the safest options
Regards
Shweta
Dear Shweta,
They may be safest but will lead to erosion of your wealth. You may re-think about your viewpoint.
If you are an earning member of your family, do buy a Term plan at the earliest.
Read:
Best Term insurance plans.
If life is unpredictable, insurance can’t be optional.
Kindly go through below article and you may revert to me with more queries;
Kid’s Education goal planning & calculator.
Retirement planning goal.
List of important articles on key aspects of Personal Financial planning.
Hi Sreekanth,
I was looking at investing around Rs10000/month SIP in ELSS mutual funds for a period of 3 years.
Have shortlisted the following three funds:
1) Franklin India Taxshield(G)
2) Axis LT Equity Fund(G) – Max
3) ICICI Pru LT Equity Fund (Tax Saving)(G)
Where would you recommend me to invest the money in? If you have any other fund in mind also, let me know. Will distributing the amount in all the three mutual funds be a good idea?
Thank you.
Dear Soubhik,
Kindly remain invested for longer period (>5 years).
1 or 2 funds can be enough.
My picks – Franklin and/or Axis LTE.
Read:
MF portfolio overlap analysis tools.
How to compare select the right mutual fund scheme?
Hello Sreekanth,
How are you? Hope you are doing good.
I have read most of your articles and found it to be interesting, however, I am reaching out to you for your help and advice.
The current deductions in my salary is as follows:
1. Provident Fund : 3000
2. Professional Tax: 200
3. TDS : 4315
Which totals upto 7515 (gross deduction) and my gross earning is 74500
Please let me know how can I reduce deductions from my monthly take home?
Also, I have the following investments done so far:
1. LIC :25000
2. Principal Repayment on housing loan: 18736
3. Income from House Property: 148806
I really appreciate your feedback and suggestions on the above.
Regards,
Kunal
Dear Kunal,
1 – Kindly share details of your LIC policy (Plan name, commencement date & tenure).
2 – Do you have health insurance cover?
May I know your financial goals??
Read :
List of income tax deductions.
List of best investment options.
Tax treatment of various Financial investments.
If an individual buys EQTY MF (ELSS or Non ELSS) more than 150000, say for 250000, what will be tax implication for the additional amount of 100000/-.
IS It mandatory to mention the additional amount in the return ?
Dear Dhillon..There is no need to mention it in the ITR.
The taxes (if any) are applicable only at the time of redemption.
Also, you can claim up to Rs 1.5 Lakh in an ELSS fund u/s 80c. Beyond that you can invest but can not be able to claim tax deduction.
Read: MF taxation rules..
Dear Sree
Thanx for quick reply.
Is there any maximum limit on MF purchase in a FIN year.
Thanks
GS Dhillon
Dear Dhillon ..No ceiling limit 🙂
Hi Sreekanth,
Nice Article !
You advice is required.I have read the article and posts but still confused bit.
I want to Invest 50K in best ELSS Scheme ,either short term or longterm ( 3 or 5 years) .Kindly suggest which is best one in current condition.
Dear kishore,
Kindly invest in ELSS funds for long-term (> 5 years).
My pick – Axis LTE or Franklin tax shield.
Read:
How to compare and select the best mutual fund scheme based on the RISK RATIOs?
MF portfolio overlap analysis tools.
I m invested AXIS long term tax saver (g),birla tax saver 96 (g),icici prudential long term equity fund (g),dsp br tax saver fund (g),franklin india taxshield (g)/5000/- in each fund. Advise me it’s a right fund or not?
Dear Ashish..May I know why so many tax saving funds?
Read:
MF portfolio overlap analysis tools.
How to compare and select the right mutual fund scheme based on risk ratios?
after reading your article from this year i have advised my son and daughter (both central govt. servants)
1. to reduce their PPF contribution to 20000 and invest in franklin india and axis long term equity fund.
2my son has fixed deposit of 7lacs in bank and now wants to use the interest money per month rs4000 as payment of ELSS premium
3. should they go for ELSS MONTHLY SIP OR LUMP SUM INVESTMENT FOR the above chosen MF
if i want to save Rs80000 towards tax exemption then
i need your advice on 1 2 &3
Dear shashi Ji,
1 – Ok.
2 – Instead if possible they can invest this Rs 7 Lakh in ELSS/equity oriented funds directly??
3 – Any mode is ok as long as it is for long-term. SIP mode can be a bit cumbersome in an ELSS fund when one is withdrawing the funds, as the units allocated under each SIP are locked for 3 years. So, one needs to plan the withdrawals carefully.
I have purchased hdfc long term advantage fund-div option of Rs. 25000/- before 4-5 yeras. I observed that recently this fund is not performing well. Is it advisable to switch to hdfc tax saver fund from this existing fund? Or I should continue with this fund for some more time period.
Dear ketan ..May I know your investment objective & time-frame?
There are better ELSS funds than HDFC LTA fund.
My investment objective is tax planning with good earning. I can hold money in fund for 5 years.
Dear ketan ..You may consider Franklin Tax shield fund.
Dear Mr Reddy
My Portfolio In SIP mode
1. Hdfc midcap oppurtunities fund Rs. 1000
2. Reliance Equity Oppurtunity Fund Rs 1000
3. DSP Blackrock MicroCap Rs 1000
4. Birla Sunlife MNC Rs 1000
5. Sundraam SMILE Rs. 2000
I am 26 year old and I have invested in these fund within last more than 1 year. My time horizon is more than 10 years.
Sir please suggest me my portfolio is good or should I change the portfolio.
Dear abhinav,
You have multiple mid-cap oriented funds (1, 2 & 5) which may or may not be really beneficial.
Read:
MF portfolio overlap analysis tools.
Best Equity funds.
How to select the right mutual fund scheme based on the Risk ratios?
Hi Sreekanth, I am a first time investor and want to start with 5k pm. Kindly suggest me two best MF. I want to invest for long term and there is no specific motive else than accumulation.
Dear Saurabh..
If your investment horizon is 10+ years , you may consider ICICI Pru value discovery & Franklin Smaller companies funds/HDFC Mid-cap opportunities fund.
Kindly read:
How to select the right and best mutual fund scheme based on risk ratios?
I want to online invest in mutual fund, but i have not any demat account.
Dear Manish ..Demat account is not mandatory to invest in MFs.
You can invest by visiting the respective fund house websites or through online platforms like MF Utility.
Kindly read:
What are Direct plans?
MF Utility online platform.
Dear Sreekanth,
Hope you are doing well. I’m a software engineer, paying lot of tax, never thought about saving it.So I want to get rid of tax, if possible wants to pay no tax. Following are my requirements.
1.Not worrying about return But the principal(invested amount) should be guaranteed at any cost, should not loose a single penny.
2.Not worrying about the investment type whether it is an MF or LIC or anything but no tax should be paid.
Note:I’m a lehman to investment as well as Tax saving schemes.
Dear Sreekanth,
To update my query. Following deductions are made currently.
2814 for PF, Housing rent 12000 pm,1600 per month for Telephone Bill.
Dear J Khan,
Kindly read below articles;
What is real rate of return?
Why one should not invest in FDs for longer period?
List of best investment options.
List of income tax deductions.
Thanks Sreekanth for the response.
I’m not worried about return, all I want is Tax savings. As a practicing Muslim I don’t want to gain anything from these investments. Though I appreciate your effort but I’m not having much time to learn all about these articles, honestly. So requesting you kindly recommend me the best of tax savings scheme so that I can be able to pay zero tax. Moreover the return I get, if any, after the maturity or at any other circumstance, will give it to needy people.
PS:This is my personal choice.
Dear J Khan,
You may invest in ELSS mutual fund. This falls under E-E-E tax category.
EX – Franklin Taxshield or Axis LTE fund can be considered.
Hello Khan
Since you are a practising muslim, you might want to consider Tata Ethical Fund which is designed exactly for this. This is not an ELSS fund and not directly relevant to your question.
Thanks Suhas for the respone. However tata Ethical doesn’t provide tax exemption either on 80c & 10d. I’ve come aross another Bajaj Allianz Pure Stock Fund (ULIP plan) which claimed to be Shariah Compliant & provides tax benefit as well. Should I consider this?
Hi Shreekanth & Suhas.
I’m waiting for your reply. Should I consider Bajaj Allianz Pure Stock Fund (ULIP plan) which claimed to be Shariah Compliant & provides tax benefit as well?
Also pls let me know any ELSS with very low Capital risk & best suited for Tax saving.
Dear J Khan,
ULIPs (if equity fund is chosen) or ELSS both are equity oriented options, so the capital can be at risk.
But if you remain invested for longer period, the chance of getting negative returns can be low.
Hi Srikant
Investment objective – Wealth building
Liabilities – Nil
Rent – 17K PM
LIC – 50K PM
Time frame – 20 years
Amount interested to invest – 60k Per annum
Goals – Build house, Buy car, Funds for retirement
Need help in
1. Choosing best ELSS fund for tax saving
2. Best ELSS / SIP to build wealth with a 20 year time frame
3. Retirement coprus should be more than 1 crore
4. Suggest minimum SIP amount to invest
Dear Sushant,
Rs 50k pm? for life insurance?
If possible, do share the Life insurance policies details (plan name, commencement date, tenure etc)
Kindly read:
Retirement planning goal & calculator.
Best Equity funds
List of best investment options.
Hi Srikanth,
I want to invest 36000 in SIP per year. I want to invest this 36000 in 3 ELSS funds. What is the best possible way to invest in SIPS and to avoid the transaction charges. And also please suggest me 4 best ELSS funds to invest.
Dear Nataraj,
1 or 2 funds more than enough, i believe.
Ex- Franklin Taxshield or Axis LTE fund.
Read:
MF portfolio overlap analysis tools.
How to select the right mutual fund scheme based on risk ratios?
Hi Sree,
Good Morning. Hope you and your family are doing well.
Need advise on the Tax saving for FY 2016 – 17 . Earlier I have declared the following are IT declarations for FY 2016 – 2017
1. ICICI Pru. Life Insurance Wealth Builder (1,00,000) (Now I am going to surrender this one)
2. Rs. 10,655 for LIC Premium
3. ELSS Birla MF (Rs. 25,000)
4. ELSS Axis MF (Rs. 24,000 (As as a SIP for 12 months))
Anyway with this they will add PF amount also. (my PF is Rs. 3664)
Instead of point no 1. (ICICI Pru. Life Insurance Wealth Builder), where I can invest and get the tax exemption?
Please advise me.
Thanks,
Raja Rajagopal
98415 72877
Dear Raja,
You may invest in the existing ELSS funds itself for long-term.
In case if you do not have term plan, you may consider buying one.
Kindly read: List of best investment options.
Hi Srikanth,
is there any Elss fund, which only invests in mid and small cap stocks?
Because anyway if we opt for small cap funds, for long term it will (may )give good returns.
Elss which invests predominantly mid and small cap fund, then it will work for tax purpose at the same time give better returns .
if so please mention.
Thanks,
Rakesh
Dear Rakesh,
Most of the ELSS funds have multi-cap kind of strategy.
You can go through the portfolios of some of the top ELSS funds and can decide.
For ex: Axis LTE fund have allocation of around 30% towards Mid/Small cap stocks.
Reliance Tax saver has around 53%.
sir.
i wants to invest in Birla sunlife equity fund
for about twenty years by sip mode.
is this fund good for long term or i should go with some other fund.
Dear paul..It is a decent one. But why birla equity fund? Your viewpoint ??
sir bcoz its birla equity fund is a multi cap fund…and have good return since long time.
If its not good according to you than recomend good one plz.
thanks.
Dear paul,
There are better choices, for ex- ICICI Pru value discovery or Franklin prima plus etc.,
Read: Best Equity funds.
Hello Mr. Sreekanth,
I am currently looking for a Tax saver Mutual Fund. I already have invested in Axis LTE and Franklin Taxshield.
1) Is it advisable to still invest in the same AMC or go with a different AMC?
2) Please advice other than the above mentioned MF which other is a recommended MF to invest in?
Please assist.
Dear Shah,
1 – Can consider same funds.
2 – Kindly share your investment objectives & time-frame details.
I already have SIP going on in the above mentioned funds. However I am still looking for some tax planning option. So is it advisable to go for the same funds in ELSS or keep it in different funds thus making the investment a bit diversified.
My investment objective is mainly tax saving and of course good returns. Time frame – min 5 yrs and beyond.
Dear Shah,
Kindly check out for overlap % if opting for funds within same fund category.
Read : MF portfolio overlap analysis tools.
Hello Srikanth,
I just started investment through SIPs last year, Currently I am investing as under :
3000- ICICI VALUE DISCOVERY FUND
1000- LIC NOMURA GROWTH FUND
2000- AXIS LONG TERM EQUITY FUND(Started this month after reading your article).
After a span of five years, let’s assume the first fund starts not performing well.
What would be the best course of action to take if this goes on for over a year?
What will happen to the money I invested and How to invest it in some other fund.
Thanks,
Ram
Dear Ram,
In case if you are not happy with a fund’s performance (after giving it sufficient time, say 2 to 3 years) then you can either switch (treated as redemption only) to another better fund within the same AMC or redeem units and re-invest in some other fund.
Thank you for clarifying.
Hi Sree,
I have taken the following Life and Pension policy : ICICI Prudential Wealth Builder II RP (My friend suggessted me this) last year. I just paid one premium. (2015)
Premium Installment: Rs. 100,000 p.a
Sum Assured: Rs. 10,000,00
Fund Name: Maximiser V (5GTH) ( I do not know what is this 5 GTH)
I need to pay premium for 5 years. I think after 5 years, no need to pay premium. Then after 10th year, they said that, will get pension.
Kindly advise on this investment. (I do not know whether I can call this as investment or not?)
Regards,
Raja Rajagopal
Dear Raja,
ICICI Prudential Wealth Builder II is an ULIP.
Are you sure this is a Pension policy? Kindly check with the company or agent and get back to me plz.
Hi Sree,
Thanks for the reply.
Yes. I checked with that agent, and he is saying that I will get pension. Please advise me now, what shall I do? Shall I continue to pay the premium or surrender this policy?
Is is possible for you to check if I attach the policy document?
Thanks & Regards,
Raja Rajagopal
Dear Raja,
I am not sure if it is a pension plan. I have tried searching for it on Google but it is given as ULIP only in all search results.
Kindly check with the company directly.
When did you buy this plan? (Commencement date).
What is the fund that you have selected?
Hi Sree,
Hope you and your family are doing good.
Thanks for your reply and advising me. Here is the fund name.
Commencement Date: July 2015 (paid one premium)
Fund Name: Maximiser V (5GTH)
Is it advisable to surrender this policy? Please advise.
Regards,
Raja Rajagopal
Dear Raja,
I am doing good thank you. Trust the same with you.
Better to surrender. But kindly note that the surrender amount (ULIP) will be moved to discontinued fund and you will get the amount only after 5 policy years. Nominal interest of say 4% will be paid on the amount.
Thanks for asking.
Yes.. Sree. As per your advise, will do the same.
Sree, one more thing, where can I check the EPS (Employee Pension Scheme) amount?
Thanks & Regards,
Raja Rajagopal
Dear Raja,
You can view your contributions (EPS) in PF statement.
Read: Pf components & interest calculation..
Hi Sree,
Thanks for the reply. For me, I am working in Wipro. For us they are maintaining private PF trust. If I login into EPFO site using my UAN, I did not see anything over there.
If possible, please let me know, How to check this? or else no problem.
Regards,
Raja Rajagopal
DEAR SREEKANTH,
EVERY YEAR I INVEST RS1,00,000 IN PPF.
BUT NOW I WANT TO INVEST IN ELSS.
SPLITING THE AMOUNT TO 50%:50%
IS IT ADVISABLE.
I NEED TO SAVE MONEY TO BUY A HOUSE AFTER 10YRS. I AM 40YRS.
IF ELSS IS OK THEN WHAT SCHEMES TO INVEST.
THANKS, SHASHI
Dear SHASHI,
10 years is a good time-frame to invest in ELSS fund. But kindly note that the units of ELSS fund has 3 year lock-in period.
If you have 10 year time-frame, you may invest in ELSS or Equity oriented funds for next 6 to 7 years and then switch to safer investment avenues.
ELSS My picks : Franklin & Axis LTE funds.
Read: List of best investment avenues.
Hi,
I would be needing around 40 lacs for my child edu. after 10 years. Pls suggest the best investment plan. Also given the period what amount of SIP should be invested in ELSS for the required return. Pls suggest plans for the requirement? Thanks.
Dear RS,
Do you have adequate Life & Health cover?
Kindly read: Kid’s education goal planning & calculator.
You may contribute to ELSS for say next 6 to 7 years. Kindly note that units have lock-in period of 3 years on ELSS funds.
Hi Sreekanth
I started investing Rs, 6200/month (12 lakhs Sum assured & 12 lakhs accident rider SA) in LIC Money Back Policy (term 25yrs) – 821 from Jan 2014 as a tax saving step.
Is the above policy good to continue ?
My take home salary is 75k/month, where i am depositing 15k/month to my dad for his monthly expenses, lic – Rs, 6200/month, house rent & other expenses/month – 40k
For tax and grow money, I am planning to invest Rs 6000/month, tenure of 10 yrs, looking for your guidance.
Thanks
Karthik
Dear Karthik,
Kindly read this articles :
Why Traditional life insurance plans like Money-back are a terrible Investment option?
How to get rid off unwanted life insurance policy?
Best Term insurance plans.
Hi sir,
I am 24yr old I.T professional.
Please guide me on which elss fund I should invest.
I am willing to invest 5000rs. P.m sip
Dear Rahul..You may consider Franklin Taxshield or Axis LTE fund. Kindly remain invested for atleast 5 years or more.
Hello Srikanth,
Thanks for the wonderful write up! I am looking forward to invest in ELSS now, but the query I have is I might have to travel to US in a year or two. I understand most fund houses restrict NRI to invest and also ask them to redeem the units before they move. Can you suggest me in the below,
– Whether I will be forced to redeem my units irrespective of my lock in period?
-Whether I will be forced to redeem irrespective of the fund performance during that period?
-Is there a good ELSS fund which allows me to have my funds here till I return back or for many years.
Please guide me
Dear Sai,
I believe that you (NRI) won’t be asked to redeem the existing units, but you may not be able to make fresh investments..
Kindly read: FATCA Compliance requirements & MF investments by NRIs.
I think most of the top AMCs are not allowing investments by NRI.
L&T, UTI, PPFAS, Sundaram and Canara Robeco are allowing the investments. As of now, you may consider Canara Robeco Equity Tax Saver Fund.
Thanks alot for your response !!! Will check the same.
Hi Sreekanth,
Need suggestion- where to invest Rs 25 lakhs rupees which I got after retirement from Defence . My age is 40 yrs.Pl give option for tax saving as well as decent return.How to devide the money in different instruments. Please advise.
Thanks,
Pradip
Dear Pradip,
May I know your Financial goal(s), investment objectives and Investment time-frame?
Kindly read:
List of best investment options.
Financial goal & investment objective – How to get decent return and save tax also.Investment horizon 10 years.
Dear Pradip..You may consider investing in an ELSS fund + Balanced fund if your objectives are returns + tax saving.
You may create STPs (Systematic transfer plans) instead of investing lump sum amount.
STP : From debt fund to Equity fund.
Hello Sreekanth…
I am a self employee of 31 years age. My monthly income is about 60k, I have a dependant wife and mother. IMPORTANT thing is 50%0f my income is not predictable/consistent as I am working on a temporary basis in an organization.
My existing financial profile is
PF+VPF – 21600+24000
LIC Jeevan anand – 36000
LIC money back – 6000
Post office 5 years Time deposit – 50000(2015-16 financial year)
I want to invest Rs 3000 per month in mutual funds which can also be useful to be covered under 80C(ELSS???), so I request you to suggest me a good mutual fund plan for 3 to 5 years investment.
Dear Sham,
1 – Your high priority action item is to buy an adequate life insurance cover. Kindly consider buying a Term insurance plan at the earliest and then a personal accident cover.
2 – Do you have health cover for self & family?
3 – Kindly build an Emergency fund (may be atleast 6 times of your monthly expenses).
4 – Once you buy a term plan, you may discontinue the LIC policy. Read: How to get rid off unwanted life insurance policy?
5 – You may consider investing in Franklin Taxshield tax saving mutual fund.
Do not miss reading this article: List of articles on key aspects of Personal Financial planning.
Hi Srikanth,
This is Prasad, have been following Relakhs for over a year & indirectly you are my adviser for tax saving investments. Right now I am considering a change in my investment plans & looking for your advise.
Family & Professional Background: I am 33 year old and working in a software industry & currently we are a family of four (myself, spouse & parents).
Current Investment Break-Up:
63600 – EPF + VPF (PF= 21600 + VPF= 42000)
11000 – LIC (Jeevan Ananad Policy started in 2007)
25000 – ULIP (ICICI Prulife – 5 lacs life cover started in 2007)
25000 – HDFC Protect Plus Term Insurance for 1 crore + income plus option (40 year policy term)
50000 – NPS contribution
My Questions:
1. Now I have to invest around 25K & looking for some better ELSS policies. Apart from that would you see if I need to stop investing in any of the above policies like LIC, ULIP or even reduce VPF & go for ELSS investment? Will that not be too risky?
2. Many of my friends & family members are of the opinion that 25K premium for term insurance which I have bought last year is too much. So gone through Max Life Term Insurance & found I can get cover for 1 Crore (35 year term) for 10K premium. But only worry is on the brand value of Max Life. Can we trust it to run fine for next 30 to 40 years. Or you suggested to go for marker leaders like HDFC or ICICI or even more safe LIC/SBI. Please advise on it.
Looking for your valuable time & advise. Thanks in advance.
Regards,
Prasad
Dear Prasad,
1 – You may make your LIC policy a PAID-UP one. Have you read my article: How to get rid off unwanted Life insurance policy?
2 – Are you happy with your ULIP’s performance? May I know the policy tenure?
3 – You may consider buying a Personal Accident cover. Read: Best personal accident insurance plans.
4 – Do you & your family have sufficient health cover?
5 – All insurance companies are well regulated in India. Kindly do not worry about continuity of their businesses.
Kindly read: Best Term insurance plans.
Thanks Sreekanth for your reply. Have given below further details as requested.
1. Thanks, will act on it.
2. ULIP policy term is 20 years & 9th year is in-progress. Till date have invested Rs. 2,12,500 & fund value as of yesterday is 2,40,000. Absolute return is 13% as per ICICI but I am not happy with returns but stayed with it because of 5 lakhs life insurance + 5 lakh accident death & disability rider.
3. Will buy Personal Accident cover soon.
4. Myself & spouse have 3 lakhs cover + 1.5 lakhs corporate buffer with 10% co-pay. Parents are covered for 3.5 lakhs with 20% co-pay. I will only pay for parents insurance which is around 21K.
5. Noted your point. Thanks for clearing my doubts.
Regards,
Prasad
Dear Prasad,
2 – You may surrender and switch to Equity mutual funds for long-term goals.
4 – Kindly have a stand-alone health cover, do not depend entirely on Employer’s group cover. Also read: What are Super Top up health plans? How do they work?
Thanks Sreekant, Nice Article…
I am very new to MF and would like to invest for 3 years for higher returns with less risk..I can invest 6k per month. Could you please suggest which will be the best. As I am already fulfilling Tax saving(80c) so not looking for tax saver.
Thanks,
Ashutosh.
Dear Ashutosh,
You may kindly consider a balanced fund and/or an aggressive MIP fund.
Read:
Best Balanced mutual funds.
Best MF MIP Schemes.
Dear Shrikanth,
I am very very new to all these. I have no idea and gettting confused what to invest after reading so many webistes. But liked this article.
Can you please suggest me a plan for tax saving and good return .
Age 25 years, montly investment 5k to 6k.
Dear Shrikanth,
You may invest in Franklin Tax shield or Axis LTE fund.
Read:
List of best investment options.
List of articles on the key aspects of Personal Financial Planning.
Dear Sreekanth,
I am 42 years old and wish to make an investment of around 10-12k per month. I am already investing in PPF with an annual target of 1L. Thus, tax saving is not really my goal as far as ELSS goes. I want to invest in a low-to-medium risk plan with a targeted maturity in the next 12-15 years. Can you suggest a good plan? It would be great if you can identify why you have selected the plan….
Thanks in advance.
Dear Kumar,
If you have an investment horizon of >12 years, you may afford to take more risk (depending on your financial profile).
Do you have any investments in Equity oriented products?
You may consider to invest in Diversified equity fund, Mid-cap oriented fund & in one balanced fund.
Kindly read:
Best Equity funds.
What are large/mid/small-cap funds?
MF Portfolio overlap analysis tools
Hi Sreekanth:
I have 10K per month to invest. Which ELSS or other funds i should choose. Object Long Term Investment currently 25 years old. Objective Childern Education,Home
Dear Anurag,
Is tax saving one of your investment objectives?
If yes, you can consider investing in Franklin Taxshield fund.
Kindly share the time-frame details for the respective financial goals.
Read:
Kid’s Education goal planning calculator.
The 6 most common Personal Finance Mistakes..
Hi Sreekanth,
My income is 77 K per month. I am looking for a pure tax savings and good returns schemes. Please suggest me any short term shcemes. Can I opt ELSS for investment and tax saving purpose for short period.
Dear Devendra..Can you kindly define ‘what is short-term’ according to you??
Hi,
Informative article really. I am a newbie with absolutely zero knowledge about ELSS. How and where should I get started?
Dear Zeeshan,
Suggest you to kindly go through below article and you may revert to me;
What are Direct Plans of Mutual Funds? How to invest in them?
How to get eKYC done for MF investments?
MF Utility for online MF investments.
Hi Srikanth
Last year I have invested in ELSS fund Lumpsump in Axis long term and religer invesco. For this I want to do through SIP from start of financial yr. please guide me which one should I choose. My age is 33 yrs.what should be my overall portfolio.I want to invest in some MidCap also apart from ELSS. My Goal is my dauther education and her marriage.Please guide me on Investment profile. rightnow My Income is 1 lakh/month
Dear sam,
You can make additional investments or create SIP in Axis LTE fund itself.
Kid’s Education goal, kindly go through below articles and revert to me if you have more queries;
Kid’s education goal calculator.
Blocks of Financial planning pyramid.
Best Equity funds 2016.
List of best investment options.
Hi Sreekanth,
Need suggestion- for Retirement Planning, can we consider SIP in ELSS? From your analysis, have shortlisted AXIS and Franklin ELSS (planning 50:50 SIPs in these 2 funds). Please advise.
Thanks,
Puneet
Dear Puneet,
Yes, sure. But may I know your investment horizon (how many years left to attain the expected retirement age)?
Thanks Sreekanth. Investment horizon is about 15 Yrs. Please advise.
Dear Puneet,
Kindly go ahead with ELSS fund(s).
In case if you are looking beyond ELSS funds, you can consider one diversified equity & one Small cap fund.
Kindly read:
Retirement planning goal calculator.
Best Equity funds 2016.
List of best investment options.
Hi Sreekanth,
Considering my financial Goal…what is your final suggestion- ELSS or Diversified/Small cap fund? Please advise.
Thanks,
Puneet
Dear Puneet,
If your investment objectives are tax saving + long-term accumulation then consider ELSS funds Axis LTE / Franklin Tax shield.
If your investment objective is long term accumulation only then you may consider funds like Franklin Prima Plus / ICICI Pru value discovery + HDFC Mid-cap opportunity fund + Franklin Smaller companies fund.
Hi Srikanth,
Could you please assist me on my investment? Little clueless about the right financial consultant
Thanks.
Dear Somali..Yes, how can I assist you?
Dear Sreekanth,
You are doing a excellent work.
I have investment of around 2 Lac in Axis ELSS and ICICI ELSS Plans in Ratio of 60:40 respectively in last few years. Further I have few FDs lying in Bank which was fetching around 8.25% rate of Interest by now, but as all banks have reduced rates, I want to switch these FDs in to ICICI Pru Dynamic Bond and other Liquid Funds. I have few queries :
1. Should I continue to invest in Axis and ICICI ELSS plans each year or should I diversify ? If Yes, pls tell which one.
2. What is best MF (Liquid and Debt) to switch the Bank FDs. My time scenario is 8 to 12 months max, so that I can switch them afterwards and I do not want Lock in period.
3. I want to shift some money in other Equity Funds . Pls advice how to divide a 100 ruppe note (Ratio) into Small – mid cap fund, Balance fund, large cap fund, diversified equity fund. Pls give 1-2 funds from each category.
4. As Bank interest rates are continuously going down, should I switch all FDs into Debt or Liquid MF or should I keep some portion in as Bank FD. Aim here is security. I wont mind in shifting all in some good Liquid or debt fund.
I had shortlisted a few
For Small – Mid Cap – DSP Black Rock Micro Cap Fund -G and Mirae Emerging Bluechip Fund -G – (6% Portfolio Over Lapping)
For ELSS – Asix Long Term Equity and ICICI Long Term Equity – (21% Portfolio Over Lapping)
For Liquid Funds – Axis Liquid Fund and Escorts Liquid Plan and ICICI Pru Dynamic Bond
For Diversified Equity – Principal Emerging Bluechip Fund and ICICI Pru Value Discovery Fund (16% Portfolio over lapping)
Pls suggest, are these mentioned funds good enough or should I change my plans.
Looking for your valuable advice
Thank you
Siddharth
Dear Siddharth,
1 – May I know the reason for investing in ELSS? If not for tax saving then you can consider regular equity funds too.
2 – Kindly go through below articles;
Types of Debt funds & when to invest?
Best Debt mutual funds schemes.
3 – May I know your financial goals & investment horizon??
Read:
What are large/mid/small cap oriented funds?
4 – May I know the reason for investing in FDs?
Dear Shreekanth,
First of all thanks for your kind reply. Now with regard to your questions,
1. Reason of investing in ELSS is TAX Saving only.
2. I will go through the articles you have mentioned.
3. Investment Horizon shall be 2 to 5 years.
4. Reason of investing in FD was to get some secured income but now as its too low so wanted to switch to some other liquid funds.
One of my queries are still not been answered like what should be ratio of investment in case you have 100 Rs in hand – Equity Fund, Small Mid Cap Funds, Debts Funds.
Once again thanks for reply.
Dear Siddharth,
If your investment horizon is less than 5 years, then suggest you not to invest in Small cap funds.
You may stick to Large-cap/Balanced funds.
Dear Shreekanth
Ok, I understood why you asked to avoid small cap – due to risk involved and time frame, so if I avoid small cap, should I invest in Mid Cap and large cap only then.
Can you suggest me any 2 large cap and 2 mid cap fund for 5 years.
Thank you
Dear siddharth,
You may consider – ICICI Pru focused bluechip / Birla Frontline Equity & HDFC Mid-cap opportunities / Mirae Asset Emerging Blue-chip funds
Dear Sreekanth,
I need to invest Rs.1,35,000 in 2016 as Tax saving. I am investing in ICICI Tax saving ELSS and Axis Long term ELSS to save tax. Should I continue allocating in the above or is there a better option?
Thanks.
Dear Miren,
You may continue with the same funds.
Also read: MF Portfolio overlap analysis tools.
Thanks for the advise. I have analysed the overlapping (21% overlap and 6 common stocks).
If I start SIP for both the funds, how much amount should I spend in both the funds?
Also, I have not invested anywhere else other than ELSS funds. Should I start investing in others also?
Dear Miren,
21% overlap should be ok.
May I know your financial goals/investment objectives??
I am planning to move abroad for which I have saved 3 lakhs which are kept in monthly fixed deposit as I may need this money withing 2-3 months. Can you suggest any better option than FD?
Dear Miren..For a <3 month horizon, suggest you to stay invested in FD only.
ok. So for ELSS can I invest 50-50 % in both the MFs?
Dear shree,
If i invest 100000/- in ELSS continue three years for tax saving and after complete of three year redeem one year amount and reinvest it approx same NAV. use this scheme every year is it advisable if not where is loss in this way………..
Dear Prem,
May I know why do you want to implement this strategy?
Hi Srikanth,
I am investing in 3 Tax saving MF–Reliance taxsaver Fund, Religare Tax Plan, Birla SunLife Tax Relief 96 – Growth.
through SIP from Last one year. Please suggest whether these are good funds. also can I include Axis LTE fund. All are long term
Dear Chandu,
These are good funds but one or two ELSS funds can be sufficient and you may consider investing in schemes from other fund categories.
Read:
MF portfolio overlap analysis tools.
What are Large/Mid/Small cap fund categories?
Thank You Srikanth!! for your quick response. Your help is highly appreciable.
After retirement I have taken-up certain earning assignment wherein I shall be paying tax as per standard norms. To reduce the tax burden I wish to invest in ELSS funds. I have demat account and wish to invest in ELSS thru it. Could you pl advise me on following:
i) Which fund I should invest in ii) If monthly or quarterly SIP shall be beneficial iii) can I make provision for SWP when I start my SIP. iv) How can I show this investment in tax returns to avail benefits v) could you guide me how to invest thru demat account in such SIP.
Regards
Dear Sanjay Ji,
SWP is systematic Withdrawal plan. So ideally you can create a SWP once you accumulate certain amount so that you can get certain amount or redeem few fund units periodically. Kindly note that the units allotted under ELSS fund are locked for 3 years and your investment horizon should be atleast 5 years or so.
You can just invest in any good ELSS fund and can get the mutual fund statement after the investment from your Dmat a/c provider / you will also get MF statement from the fundhouse/registrar to your email id (if provided).
You can show the invested amount under section 80C as a tax deduction.
sir i am bhanudas gaonkar i am having SIP portfolio of following mutual funds kindly advice are they good option
1] Frankline bluechip fund growth
2] Frankline prima fund growth
3] Frankline tax shield growth
4] Reliance oppurtunity fund growth
5] Reliance banking fund growth
6] Reliance small cap fund growth
7] reliance mid & small cap fund growth
8] Axis long term equity tax saving fund growth
9] Tata mid cap growth
10] Tata dividend yield growth
11] Hdfc Prudance fund growth
12] Hdfc childrens gift fund growth
13] ICICI tax saver fund growth
All these are SIP kindly advice shall i continue with this funds
thanking you
Bhanudas Gaonkar
Dear Bhanudas..May I know the reason for investing in so many funds? Do you take any advisor’s help?
sir i have not taken any advisor advice and i have invested for my child education and to build a house in these SIP i am investing total 15,000/ per month kindly advice shall i continue with this or stop some my child is 5 years .
Dear bhanudas,
Suggest you to trim down your portfolio.
Kindly read:
MF portfolio overlap analysis tools.
Best Equity funds.
Sir i cutoff my portfolio and will go with following
1] Franklin blue chip G SIP 2000
2] Franklin prima fund G SIP 2000
3] Franklin smaller co fund G SIP 2000
4] Reliance opportunity fund G SIP 2000
5] HDFC prudance fund G SIP 2000
6] HDFC childrens gift fund 2000
7] ICICI TAX saver sip 2000
8] Axis long term equity fud SIP 2000
kindly suggest.
sir waiting for your reply
Dear BHANUDAS,
You may drop HDFC Childrens gift fund.
By the by may I know your investment horizon and I assume you have gone through the links given in my previous comment.
my horizon is 10 to 15 years and what about franklin bluechip and prima fund and shall i invest in franklin tax sheild for tax purpouse.
Hi Shreekanth,
I am a new investor (28 years old) and recently start monthly SIP of 2500 INR in ‘Axis Long Term Equity -Direct Plan(Growth)” fund and now want to start one more monthly SIP of 1500 INR in some other fund (Direct growth plan). And I am confused among 3 funds :
1) Birla Sun Life Tax Plan
2) Birla Sun Life Tax Relief96
3) Franklin India Taxshield
As per past performance, ‘Birla Sun Life Tax Relief 96’ gave highest return but to my understanding (by referring ValueReserach) it’s risk factor is “below average”. But Franklin also gave pretty decent return and has “low” risk factor as compare to other 2 funds. So considering all factors, which fund shall I opt, among the three?. My time horizon is 10 years. (Would really appreciate, if your suggestion comes with reason).
Moreover, NAV of ‘Franklin T. India’ is far high than other two. And considering the fact that I am going to invest 1500 pm, is this ok or not? I mean, does high NAV matters? Should I consider NAV while investing?
Thanks in advance for your expertise.
Regards,
Shivam
Dear Shivam,
My pick would be , Franklin fund, because of its consistency in giving decent returns and risk Vs return trade off is in its favour.
High or low NAV really does not matter. It’s the % of returns and how consistency they were, is what matters the most.
Dear Shreekanth,
Thanks for your reply, I rely on your advice and will go with Franklin. Once again, many thanks for your good work.
Keep it up.
Best Regards,
Shivam
Hi sreekant,
I am planning to invest in ELSS for next five years.
Please suggest me a good fund where i can invest. I can invest 3k per month.
Dear Amit..You may consider Franklin Taxshield fund.
Dear Srikanth,
would need your help in investing through SIP.
My time horizons is more than 10 years.
i can invest 10k each month(5k + 5k) in 2 different funds.
i have 2 daughters, 9 plus years and 2 plus years respectively..
my financial goals are funding for their higher studies and wedding.
at the same time saving tax too.
Kindly advise
Dear veer,
Besides kid’s education , you may also have to prioritize your other long-term goal ie Retirement planning.
Also, kindly note that your goal target years can be different and hence you may have to pick suitable investment products accordingly.
May I know if you have adequate life & health insurance coverage?
Kindly read;
The 6 most common Personal Finance mistakes..
Financial Planning Pyramid..
Hi Srikanth,
Thanks for your mail.
so far i have a term policy of 30 lacs coverage for 30 years, for which am paying 13500 for year and i have completed 5 years by now. and all these premiums are payable back to me after the period, if nothing happens to me in between, the policy name is aviva lifeshield i believe.
Now am planning to buy a term policy coverage of 1 crore.
kindly guide me accordingly.
Dear veer,
Kindly go through below articles;
Best Term insurance plans.
HDFC Click2Protect Plus review.
ICICI Pru iProtect Smart review.
sir..
i m investing in relience mf and some other house mf.
Relience group is duffering from more than one lac crore debt.
suppose if it proved as bankrupt or left india like vijay maliya.
than what we losses our money invested in e.g. relience mf or it will be safe without any harm in that case.
plz clerify.
thanks.
Dear paul,
Kindly note that Indian Mutual Fund industry is a very well regulated one.
But do note that any investment carries its own set of risks, so ideally diversify your investments across asset classes and across Fund houses (for MFs).
Dear Sreekanth
Recently made two lumpsum MF investments in March 2016
– a ) 30K in Axis Long term Equity Fund
– b) 25K in ICICI ELSS
I am thinking of starting an SIP for 3000 PM . Want to invest in an ELSS for tax savings. What do you suggest? Should i add on the existing corpus ? If no, suggest an alternative. Looking for the least possible horizon which in this case will be 3 years
Sathya
Dear Sathya..You may make additional investments in your existing funds itself.
Read: MF portfolio overlap analysis tools.
Hi Srikanth,
Thanks for sharing your findings with us. I am new to these kind of investments. I would like to invest 9000 per month , 3000 each on short, medium and long term growth starting from this month. Can you suggest best available three schemes without portfolio overlap as you mentioned in your articles. Thanks in advance.
Dear Ram,
Short term : Read : Best Debt funds.
Medium Term:
Read;
Best Balanced funds.
Best MIP Funds.
Long term; Kindly read:
Best Equity funds.
List of best investment options.
Hi Sree,
Thanks for the reply. I read those articles and zeroed in on below ,
1. Long term- axis long term equity
2.medium- hdfc children gift fund investment plan.
Is these two are right selection?
But, for short term there are different options and I got confused to select one. Can you suggest one or two plans directly.
I have one more query may be this is silly but still i need to know, already I’m part of employee PF through my company. I heared of public provident fund(PPF).what is the difference between these two and investing in PPF is good enough or not. Thanks in advance.
Dear Ram,
It is better to avoid ‘Child gift fund’ though it has been performing well. Instead you may consider HDFC Balanced fund.
Read:
Children Gift Mutual Funds – Review.
Types of Provident Funds.
Dear Sree,
I would like to invest in Birla sun life tax relief-96. This is for a period of 5+years. Is it good fund?
In your post you have mentioned birla sun life tax plan. What is the difference between these two? Why they have two funds? Kindly suggest.
Dear Udayakumar..I believe that you have already invested in Axis LTE right, if so you may add your investments to this one itself.
Thanks Sree. Glad that you remember my investments.
Actually I thought putting some lumpsum into a new ELSS.
Dear Srikanth,
I have read through the posts and Q&A here, thanks for all the information. I am new to ELSS MF investments, I am planning to invest very early for the FY2016-17, in April 2016 itself (tax saving also in mind). I have a lump sum amount of Rs 80,000. Request you to suggest if investing the full amount in Axis LTE fund is a good idea? or please suggest any 2 funds if investing in two is better than relying on one fund.
Thanks in advance.
Dear Kishore,
That’s the best way to plan your taxes. May I know your investment horizon (time-frame)?
Read:
Tax treatment of various financial investments.
List of best investment options.
Think beyond taxes while investing!
Dear Sreekanth, thank you for responding.
I am fine with 3 to 5 years(ideally 5 years). Frankly speaking I am keen on the returns, than on the time frame. For this particular investment 5 years is what I have in mind, I don’t mind changing my time frame if advised. Your thoughts and investment suggestion please.
Dear Kishore,
Your time-frame has to be long-term if you would like to invest in equity oriented products (market linked).
You may invest in Axis LTE & Franklin Tax shield funds.
Hi I want to invest around 3ooo in ELSS and want to invest for a longer time say for 10 years, which are the best funds to buy and I have no clue what’s happening in the market and its trend
Dear sanjay..You may invest in Axis LTE / Franklin Tax shield funds.
Hi Sir,
Nice to see u r sharing your knowledge with people who are looking for help !!
My Question –
I am planning to invest in ELSS 3000 rs . monthly for next financial year in SIP mode.
One scheme i have finalised is Axis Long Term Equity Fund Direct Plan (G).- 1500 rs.
Now looking for other scheme which shouldn’t be overlapping with the above one.
To make it more clear below are the schemes which are running in my mind :-
1> Birla Sun life Tax Relief’96 Direct plan (G)
2>Franklin India Tax Shield Direct (G)
3> ICICI Pru Long Term Equity Direct (G)
Out of 1,2 and 3 schemes please suggest me the better one with minimum overlapping, good returns in 3 and 5+ yrs by considering my eagerness in diversification of holding , not overlapping much . My aim is to continue in this ELSS for at least 5+ years.
Thanks !! waiting for response.
Dear ADARSH,
You may read this article to check overlap : MF Portfolio overlap analysis tools.
Hi sreekanth,
I visited the portfolio overlap tool but it wasn’t clear and that tool wasn’t working properly.
So ur suggestions and inputs will be helpful to finalise me one elss among above mentioned 1>,2> and 3> schemes.
Thanks!!
Dear ADARSH..You may consider Franklin Taxshield fund besides Axis LTE fund.
thanks sreekanth !! could you please suggest about Birla Sun Life Tax Relief’96 Direct Plan(G)? Its NAV is low whereas NAV of Franklin India Tax Shield Fund is around 400+ in Rs.
Also, Franklin Tax Shield Funds holdings are more in Finance sector whereas of BSL 96 Tax relief emphasis more in Automobile > Engineering( Honeywell)> Finance> services> energy and so on.
AxisLTE emphasis more on Finance sectors and BSL 96 is bit different. So this will diversify my holdings. This way i think.
Could you please elaborate and share your inputs so that i can clear my doubts as well as understandings ?
Many thanks!!
Dear ADARSH,
As suggested earlier, you may kindly go through the Portfolio overlap tools and take final decision.
High Vs Low NAV is a misconception, what matters is % of returns and not the no of units.
Hi Sree,
I am new to MF investment. I need to invest 60k/annum to save my TAX for 3-5 years horizon. Should I invest 30k each in AXIS LTE and FRANKLIN fund or Shall I invest in either one of them? What do you recommend?
Thanks !!
Dear Nishant,
From next Financial Year, suggest you to plan your taxes from the beginning of the year itself.
Both are good funds. Suggest you to read this and take the decision: MF Portfolio overlap analysis tools..
Thanks Sree !!
Got one more question.
I am investing Rs 1000. per month in “Reliance growth fund” (SIP) since 2010. I redeemed Rs. 40000 in July 2015 . Is this STCG or LTCG for me ? I checked my Statement and it shows 17461/- under Captial gain statement so I guess its LTCG for me?
What amount do I need to show in ITR under “Income from other sources? Rs 40k or Rs 17461/- ? Please advise.
Dear Nishant,
If you have continued SIPs till 2015 then some of the units would fall under STCG category. So, kindly check if it is STCG or LTCG or both??
If it is LTCG, no taxes are applicable.
Read : Mutual fund taxation rules..
Hi Sreekanth,
Thanks for the article. That was clear and concise. I have a query. I’m planning to invest 80-90K with PPF(2nd year of investment) and ELSS(Newbie) for next financial year. One of my RD of 50k is getting matured on 28 Mar 16. Please let me know which option is advisable from below:
1.Put 50k in PPF before April 5th and Start a Sip of 5K per month in Axis LTE for 6-8 months (or)
2.Put 50k into Axis LTE in April and Monthly transfer to PPF for total of 40 or 50k
Im a 26 yrs unmarried woman planning PPF for my retirement. Is it ok to plan 60:40 share into ELSS and PPF or Is vise versa good?
Dear Keerthi,
Suggest you invest in PPF in the first week of April (lump sum) and then start SIP in Axis LTE fund.
Kindly understand how ELSS funds work and the risks associated with them.
PPF is one of the best debt oriented saving scheme.
Kindly read:
Tax treatment of various Financial instruments.
Best Investment option in India.
Hi srikanth, i am planning to invest in
Canara Robeco Equity Tax Saver and Reliance Tax Saver ELSS funds. Can you plz advise if these funds are good.
Also plz advise if its good to split i.e. investing 5000 rs per month in each separately or I should invest 10000 rs per month in one of the above
Dear Priyanka,
My picks would be : Franklin Tax shield / Axis LTE / Birla tax plan.
Also, kindly read: MF portfolio overlap analysis tools.
Hi, Pls advise good SIP (Rs. 5000pm) and expecting a good return down the line 5yrs.
Dear Seshu..Kindly read: Best balanced funds.
Hi Sreekanth,
I need to invest 60k this month to save my tax. From your previous posts, I understand, its best to invest in Axis long term & Franklin India taxshield.
Q1 – which is best among these two (in terms of returns)?
Q2- should in invest half and half in both of these or should I pick one of them and some other or just go with one only?
Thanks in advance for your kind help.
Dear Tarun,
1 – Franklin fund is very consistent and have long track record. Axis fund is relatively a new fund but has been performing very well over the last few years. Also, Axis fund is able to generate HIGH returns with LOW risk grade. Personally, I invest in Axis LTE. May I know your investment horizon?
2 – Check portfolio overlap between them. Read: MF portfolio overlap analysis tools.
Also suggest you to not to wait till financial year end to save taxes. Kindly plan your taxes for next FY from April 2016 itself.
Hi Sreekanth,
I am also planning to invest in similar lines to tarun. My Investment horizon is 3 – 5 years. I am first time investor in Mutual funds.
So is it the right decision to invest in Axis LTE for the mentioned period.
Dear Bhavani,
If one of your investment objectives is not tax saving, you may consider investing in a balanced fund Ex: HDFC balanced / TATA balanced fund.
Else, you can invest in Axis LTE/Franklin Taxshiled fund with a horizon of atleast 5 years. Do note that the ELSS fund units will have lock-in period of 3 years.
Dear Sreekanth,
Thank you for your reply, really appreciate it.
I have invested 70K in Axis LTE. As you advised to start investing from April 2016 to save tax for next financial year, I am planning to invest 10k through SIP for 5 years minimum. Can you please make some recommendation. In one of your recent post you have advised Franklyn and Birla, should I consider to invest in one for those or should I continue to invest in Axis LTE? Also what are the other options to invest with target of saving tax and good returns?
Once again thanks a lot for your help.
Dear Tarun,
You may continue with Axis LTE.
Kindly go through below articles:
Income Tax Deductions list for FY 2016-17.
Best investment options in India.
Dear Sreekanth,
Thanks again for your kind reply and informative articles. I have one more question for you. I noticed today that there are 2 Axis LTE funds {Axis LTE (G) & Axis LTE – Direct plant (G)}. These both have different NAV & asset size. Are they a different plans? I have invested in Axis LTE – Direct plant (G), is that the one you have recommended?
Thanks for clearing up this confusion.
Dear Tarun..Kindly go through this article and you may revert to me if you still need more info : What are Direct Plans of mutual funds & their benefits?
Dear Sreekanth,
Thanks a lot for link to this informative article and clearing up all my doubts. Keep up the good work 🙂
Hi Sreekanth,
It was an informative Article. Keep Writing !!!
I have been investing in AXIS LTE and BNP Paribas LTE from last 3 months. SIP of 1500 and 1000 respectively.
Should I re-consider my decision of investing in BNP Paribas and start investing in other MF’s like Franklin India and ICICI Pru ? Please Advise.
Dear Arun,
Why do you want to re-consider? Let me know your investment objective & time-frame?
Hi Sreekanth,
I have been reading the comments by you on the HDFC Tax saver scheme. Personally I have invested into HDFC Tax Saver (G) ELSS scheme from the last 1 year.
Currently I am bearing a loss and I am in a hope that it the scheme might start performing well. Wanted to know if you think the scheme might perform well going forward?
It also has a lock-in period of 3 years. Knowing the fact that the scheme is not doing well is there any option to switch before the lock-in period is completed?
Please suggest?
Dear Saurabh,
Do you have active SIP?
If yes, you may pause future SIPs and can consider investing in Axis LTE/Franklin Taxshield.
Switch, during the lockin-period one can not switch the existing units to other fund, that too switch to a different fund house scheme is not possible.
Hi Sreekanth,
Thank you so much for the suggestions. Yes, I still have active SIP with HDFC Tax saver. Are there any possibilities that the scheme start performing well again?
Dear Saurabh..We can only hope that it performs better and cannot predict the future.
Your article is very informative and as I am newbie it help me a lot to understand investment options and mutual fund.
I want to invest RS. 80,000 in ELSS fund for tax benefit under 80 C. Should I invest the complete amount in one fund or more than one fund. Please suggest funds with the amount to be invested as per my requirement.
Dear Hansmukh,
As you are a newbie, kindly understand that ELSS funds are risk/equity oriented products. Remain invested for atleast 5 years or so.
You may pick two funds EX: franklin Taxshiled & Axis LTE fund.
Read : MF portfolio overlap analysis tools.
Hi Sreekanth, I seen couple of guys said above that, they just parked the money in MF and got no returns after decent amount of 5 years. Kindly advise how would we interpret this to invest in MFs,
Regards,
Chandra
Dear chandraswamy,
That’s why investments in mutual funds or any equity oriented products are subject to market risks.
Also, it depends on the what funds have they invested in??
Hi Sreekanth,
I was wondering if UTI LTEF mutual mund is a good place to invest. Kindly put your insight into it.
Dear Pulin..There are better performing ELSS funds than UTI Long Term Equity fund. Kindly go through the list given in the article.
HI,
I am doing SIP investment for abount 3 years in HDFC tax saver, however the returns are not satisfactory. Could you please suggest if I shall stop this scheme (since locking period is over) and invest in new scheme or shall continue for benefits in longer run. Also if needed to start a new scheme right now, which can be better option out of Axis Long Term Equity Fund, Franklin India Tax shield Fund or Birla Sunlife Tax Plan
Dear Debajit..You may switch to Axis LTE / Franklin Taxshield.
Hello Debajit, how much return did you get during 3 years in your HDFC fund.
Hi sreekanth,
I found here the information’s are very useful.
I have one question that , is SIP or lumnpsum which one is good to do while doing ELSS
Dear Saheb..Personally I prefer investing a lump sum amount manually to SIP (automatic) mode.
Hello Sir,
I am planning to invest in Axis LTE through SIP mode and I am a newbie that’s why have to ask
What is SIP (automatic) mode and how to opt for it ?
Dear Tanmay,
SIP stands for Systematic Investment plan. You can invest a certain sum of money (min amount can be Rs 500 / 1000 depending on the scheme) periodically like monthly,daily etc.,
You can create SIPs by visiting fund house website or through online platforms or can take help of a mutual fund agent/advisor.
Read:
http://www.relakhs.com/direct-mutual-fund-plans-buy-online/
http://www.relakhs.com/mfutility-invest-direct-plans-mutual-fund-schemes-online/
http://www.relakhs.com/mutual-fund-direct-plans-vs-regular-plans/
Hi Sreekanth,
Thank you for this wonderful article. More importantly I notice that you have patiently replied to every viewer query. Am a first time investor. Quick question: your table indicates that the Franklin India Tax Shield is a low risk fund. However the official website classifies this fund as “Moderately High Risk”. Also, what is the difference b/w growth and direct growth?
Dear srini,
All equity oriented funds will have ‘high/moderate’ risk profile.
The point mentioned here is based on ‘risk Vs return’ trade off, meaning the fund is able to generate decent returns consistently and standard deviation is low.
Hi Shreekanth,
What percentage of returns I may accept from Franklin India BLUECHIP FUND in a span of 10-12 years ?
I know its a hypothetical question, but please share your views…
Dear Dhruv,
If I invest in this fund, I would expect returns of around 1o%, anything over & above that is a BONUS 🙂
Thank you Sreekanth.
Dear Sreekanth,
1. I want to invest basically for my daughter’s future who is 10 years now. I already have a Insurance/Medical cover of 50 lakhs. I plan to invest 7000 monthly SIP/84000 annual. My age is 44 years now and I have 10 more years for retirement from a govt job. I already am saving 1.5lacs from balance income under 80C.
2. Should I insure myself more for 50 lacs on a term insurance plan for next 20 years by paying annual premiun of around 14000 and put the balance 70000 on an ELSS ( Like HDFC Life Click2 Protect Plus and ICICI Pru LTE) ? OR Should I take a Mixed Insurance cum Investment Plan ( Like HDFC Life ProGrowth Plus ) ?
3. Also please compare them and advice with respect to charges involved throughout the term period and the amount being actually invested ?
4. Is FMC and other charges levied on the total/balance Fund value ? That is every year suppose I invest 84000, then is FMC of 2.5%/1-35% levied on the cumulative total of the fund value every year e.g after 5 years will it be levied on 4,20000 considering that to be the fund value say ? And is it applicable for ULIP and ELSS both ?
Dear Sanket,
2 & 3 – Based on your income earning potential & financial obligations, you may enhance your life cover. Suggest you to buy a personal accident plan too.
The policy tenure can be up to your expected retirement age or till the time you expect financial obligations will remain. You may kindly avoid ULIPs.
Read:
Top Online term insurance plans.
Best Personal accident insurance plans.
Super Top-up health insurance plans.
4 – FMC are applicable for ELSS & ULIPs. But the rates can vary.
Dear Sreekanth
1. Thanks for your advice. I value it.
2. FMC – I know it is applicable at varied rates for ELSS and ULIP also. I was asking :-
Is it charged in both on the cumulative total of the Premiun/Investment you make every year i:e on the total Fund Value( Refer Para 4 above for eg ) ? ULIP I am sure but ELSS I am not ?
Dear Sanket,
FMC are treated as an expense in case of ELSS funds and it is adjusted in NAV.
The FMC charges are classified as ‘recurring charges’.
Ally types of expenses, which involve the fund management fee, agent commissions, registrar fees, and selling and promoting expenses, fall under a single basket called expense ratio or annual recurring expenses that is disclosed every March and September and is expressed as a percentage of the fund’s average weekly net assets.
Hi
Nice article.
I have a question. I have invested in SBI Magnum taxgain MF last year for 50K(lumpsum). I would like to invest 1L this year in ELSS (lump sum).
Should I go for Axis this time? Or should I check for SBI itself ? How is SBI ?
Please let me know your suggestion.
Thanks for you help in advance.
Dear Jayaram..You can consider investing in Axis LTE fund.
I also saw a new fund – SBI Tax advantage Fund-III-G
Kindly ignore NFOs (new fund offers).
sir is it good to invest via lumsum mode in small or mid cap as the market is low.
Dear Pal..Anytime is good time to invest. Let me know your investment horizon??
hello
i want to purchase a MF on SIP basis which ELSS fund would be best if i take the horizon of 10 years from now. the amount i want to invest initially is 1000 as a SIP as my age is 25 years
kindly reply to me so that i can start investing.
Dear CHIRAG..You may consider AXIS LTE fund.
Hi Sreekanth, Kindly let me know how much a fund manager generally charge for managing the funds.
Dear Ankush..You can find this information in MF Scheme’s Key Information memorandum / Scheme information document. Refer to expense ratio, which varies from scheme to scheme.
Hi Sreekanth,
Firstly thanks for your guidelines. I think its really nice so see the details with factual numbers. Your site has been a great source of information for all beginners like me.
I would like to get your views on Reliance Blue chip savings plan or any other market guaranteed plans with life cover/insurance/Tax rebate/Maturity bonus and Returns. Is it a good replacement for ELSS???
Dear ARAVIN..It is prudent not to mix insurance & investment. If your requirement is risk cover, get term insurance plan. In case if your investment objective is returns / long-term wealth accumulation, there are better options than traditional life insurance plans.
Read:
Term insurance Vs traditional insurance plans.
I should thank you for your guidance from time to time.
Please let me guide as under;
1.While making investment in ELSS in any of top six mutual funds as demarked by you which fund may give high return
(a) whose NAV is high (b) whose NAV is low
2.In postal deposit which term deposit other than NSC may give benefit under 80c
3.In which Bank higher interest rate in term deposit exclusively for taking benefit under 80c is available.
4.Is Bank may allow to open Tax Saving term deposit if there is no account is not existing in the said Bank but KYC formalities has
completed
Expecting your valuable guidance,
Dear DEBASISH,
1 – We can not predict the future performances. We can only expect decent returns from them in longer period. High & low NAV does not matter, it is the % of returns which matters. “Buying units of a low NAV fund can give better returns” – This is a myth and misconception.
2 – Post office term deposit 5 years one, Senior citizens Savings Scheme & PPF.
3 & 4 – It is advisable not to invest in Bank FDs for long-term and that too to just save some taxes.
Read : Why one should avoid long term FDs/RDs?
Hi Srikanth,
Thanks for the list again.
Based on your last year article “top 5 elss in 2015”, i have been investing in Axis LT since april 15.
I want to strt investing on one more fund this year. Just for making the risk minimize i want to invest in one large , one small&mid cap.
How do I know AXIS LT comes to which category?
Dear Meher,
Axis fund can be treated as a MULTI-cap/diversified tax saving fund, based on the fund’s current portfolio (investments).
If you would like to bring a balance to your portfolio, you may consider a balanced fund.
Read :
Best balanced funds.
Thanks Srikanth for prompt reply. I will go thru that link 🙂
Thanks for sharing the 6 best ELSS options.
I am new to investing in ELSS and have shortlisted the following funds:
– Axis Long Term Equity Fund.
– Franklin India Taxshield.
I wanted to know, if it is OK to start investing in both of them or is it better to invest in only one of them.
Also does it require a demat account to do this, or can I do these transactions through my Savings account.
If I can do this with a savings account then, how do I start the process?
Dear Aindril,
Demat account is not mandatory. You can invest in them directly by visiting respective fund house websites or through online platform like mfutility (free of cost) or through online distribution platforms.
Check the portfolio overlap of two funds.
Read :
MF portfolio overlap checking tools.
MFutility online mf platform.
How to invest in direct plans for MF Schemes?
Dear Sreekanth,
Thanks for your quick response and the important details in the links shared.
I have checked the portfolio overlap between the two funds through:
http://fundpicker.thefundoo.com/Tools/PortfolioOverlap
A – Axis Long Term Equity Fund.
B – Franklin India Taxshield.
It shows:
21% percentage portfolio overlap
10 common stocks
36 total stocks in A and 26 uncommon stocks in A
62 total stocks in B and 52 uncommon stocks in B
Now with my near zero knowledge in this, I would need your expertise in understanding the above mentioned stats.
Meanwhile I am initiating the account opening process in MFutility.
Regards,
Aindril
Dear Aindril,
There is no hard n fast rule for the % of overlap..Say if the overlap is 60% then it is better to drop one fund from the portfolio and pick another one (may be from a different fund category).
For example : If Fund A has 40 stocks in its portfolio & Fund B has 54 stocks, with 14 stocks as ‘common stocks’ then
you can read it as ; 14 common stocks, 26 (40-14) stocks as uncommon stocks in Fund A , 40 (54-14) stocks as uncommon stocks in fund B. You can also view % weightage of these common stocks in respective fund portfolios.
Kindly read: MF Utility & its benefits.
sir,
also sugest how is relience banking fund to invest .
thanks.
Dear Yash,
ULIPs are long-term product, you may have to invest in it till policy maturity to get decent returns.
Suggest you to discontinue it and switch to mutual funds.
Kindly note that if you discontinue now, you will get the fund value after adjusting for some expenses at the end of the 5th policy year only.
You can buy a term plan to get adequate life cover & invest in mutual funds for long-term goals.
Read:
Best Term insurance plans.
Sector oriented funds like ‘Banking funds’ are highly risky, you can invest in them if you understand the banking industry well, else invest in diversified equity or mid-cap funds.
Kindly note that ‘banking sector’ may not do well in next few quarters.
sir plz sugest me as earlier as possible.
i take ulip plan of HDFC click to invest monthly of 6000 last january 2015.
at present the fund value is 71000 in one year while the principal amount is 12 ×6000= 72000.
which is less than principal amount.
Is it right to continue it…?
I also wants to take a term plan in the coming month.
I wants to save tax and grow wealth. plz sugest.
thanks.
Hi Sreekanth,
My current age is 31 and my plan is to invest in ELSS for Tax saving as well as good returns for long term to secure our retirement, I am ready to invest 2000 on monthly basis. Could you please suggest a best fund for me?
Dear Abhay..You may consider Axis LTE fund.
I just withdrew my money from 2 ULIPs this year. It was a bitter thing to do, but after 5 years of “investing”, I realised that I had my money simply parked 🙁
Thanks for this article, esp. together with your last year’s article, gives some confidence to the lay investor.I esp thank you for pointing out “portfolio overlap”, as I too was going to do that!
Dear Shreela..Thank you, keep visiting 🙂
Hey Sreekanth,
Me and my husband has total earning of 1 lacs per month and have a 2 years old daughter.
We are investing 50 k in Sukanya Samridhi, 50k in my PPF per annum.
Now I want to invest in ELSS. Please advise on how to invest and how much and for how much duration for good returns.
Dear Preeti,
Kindly use ‘Kid’s education goal calculator‘ to find out approx savings that are required.
You can invest directly through fund house websites or through mf utility platform or through online distribution platforms / mf agents.
Kindly read:
MF utility platform for direct plans of MFs.
How to invest in direct plans?
Dear sir i have already invested in RELIANCE TAX SAVER fund. Now for this year investment in ELSS scheme should i consider the same fund or go for other fund. i want to invest lump sum kindly suggest fund .
Prashant
Dear prashant,
It has been performing well, you may continue with it. But do note that the fund has ‘high’ risk grade.
I want to invest Rs. 1 lac in Mutual Fund tax savings schemes to save tax under section 80c for the Accounting year 2015-2016. Kindly advise me the good options in this regard.
Regards
S. J. Sarkar
Dear Suprim..Kindly go through the article and list of best ELSS funds.
Thanks for the wonderful article Shrikant!
I am planning to invest 1 lac (lump sum) in ELSS mainly for tax saving purpose under 80c. I have adequate life and health cover.
Should I invest entire 1 lac in in one fund or its beneficial to split?i was think of taking 4 funds 25k each.
Also I have high plans of buying a home next qtr and would be taking a home loan.
Do u think I should put this 1 lac in down payment and decrease my loan amt., or buy ELSS ?
Thanks,
Gaurav
Dear Gaurav,
Let me know your investment horizon of ELSS? Suggest you not to invest in 4 funds. This may lead to portfolio overlap.
Over longer-period returns from ELSS fund can be more than the home loan interest rate.
But at the same time, do not stretch yourself regarding the quantum of loan amount (do not over leverage).
Sreekanth ji best festive wishes..
I am a central govt employee,32 yrs aged, of 33 k pm in hand salary with 3k(individual contribution)+3k(govt contribution) k invested in NPS. I have 1 PPF of 3k/pm investment. My future targets are,
1. 40 lacks after 25 year for marriage
2. 25 lacks for child higher education
Please suggest MFs for tax saving as well as targets fulfill.. And please suggest which is better between SIP & lumsum investment?
Dear Aasu,
Do you have sufficient life insurance & health insurance cover?
I have already replied to your query, kindly visit: MF Portfolio overlap…
Thanks for reply…as I am in health sector, I don’t need any health insurance. I am planning to get life insurance plan but confused in different plans & companies, also these insurance do not give much returns! Please guide in selecting insurances…
Dear Aasu,
Could you justify your statement? (If you are working in health-care sector, why health insurance is not required?)
Do not expect returns from a life insurance plan. Life insurance plan(s) except term insurance are not required.
Kindly consider buying a pure term plan.
Read :
Best Term insurance plans.
Term insurance plans Vs Traditional plans.
Why having adequate insurance cover is important?
Sreekanth ji
Health issues of mine & dependents addressed by my hospital, so I m thinking not to take health insurance… Am I going wrong?
Dear Aasu,
Just in case if you gets employed with other some other organisation? Also, it can be very difficult to get health cover after your retirement.
It is advisable to have a health cover which is not dependent on your employment.
I am doing SIP investment from past 8 months in HDFC tax saver. Can i continue it or else stop it.
Dear Paresh,
It is very difficult to predict which mutual fund will give the best returns in the future. Having said that, HDFC Tax Saver has not been preforming well for the last 5 years when compared to other good funds in tax saving category. Five years is a decent time horizon to make a decision for the switch.
But your investments are less than 3 year old,so you can not redeem them now. Suggest you to make fresh investments in other ELSS fund as suggested in the above list.
I have split my investment in HDFC and Axis mf (5K each)
Is HDFC not a good choice anymore?
Or can I expect good returns in the long run (10 years and above)?
Dear Rohit,
Are you just holding the hdfc tax saver fund units or is it that your SIP is active?
Suggest you to make fresh investments (if any) in Axis fund itself.
ELSS is best option to invest and save tax.As compared to PPF return is much better in 15 yrs.Among all funds Axis ELSS fund looks best.
Thanks for 6 best ELSS MF