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Top 5 Best ELSS Tax saving Mutual Funds to invest in 2015

Last updated: August 12, 2019 | by

For salaried employees, the deadline to submit the provisional tax saving investment proofs is fast approaching. Most of the employers collect the documents in January. During this period investors/employees who have not done their tax planning rush to buy life insurance policies or some other tax saving investments. There is one tax saving option which I believe is the best investment avenue both in terms of tax benefit and wealth creation. I am talking about ELSS  (Equity Linked Savings Schemes) Mutual Funds. Let us analyze and identify the Best ELSS Tax saving Mutual funds.

ELSS funds are best suited for self-employed individuals too. 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.,)

Features / Benefits of Investing in ELSS Mutual Funds:

  • ELSS Mutual Funds are one of the best tax saving options under Section 80c. Infact, ELSS MF scheme is the only pure investment option under Section 80C through which investors can take exposure to equity markets.
  • 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.,)
  • ELSS falls under EEE tax rule (Exempt-Exempt-Exempt). No taxes are applicable during Contribution-Accumulation-Withdrawal phases. Investments get tax deduction under Section 80C, so you don’t have to pay tax on the amount invested in the ELSS fund. The capital gains generated by the fund are also exempt from tax as the investments are not withdrawn. Finally, withdrawals are also tax-free because there is no tax payable on long-term capital gains from equity-oriented mutual funds. The Employee Provident Fund and the Public Provident Fund are the only other investment options that enjoy the EEE tax treatment.
  • Dividends declared on these schemes are also tax free in the hands of unit-holders (investors)
  • You can start a SIP in ELSS MF with a minimum investment (as low as Rs 500). Unlike an life insurance, you don’t have to commit multi year investments.
  • There is no upper limit for investment in ELSS but the maximum tax benefit is limited to Rs 1 lakh under Section 80C.

Top 10 Best ELSS Tax saving Mutual Funds

There are around 93 ELSS funds under Tax Saving/ELSS Fund category. In the last five years the average returns generated by ELSS fund category is around 11% to 13% .

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 3years to 10 years. I have considered only those funds which are atleast 5 years old.

  • Axis Long Term Equity Fund
  • Franklin India Tax Shield Fund
  • ICICI Prudential Tax Plan – Regular Plan
  • Reliance Tax Saver (ELSS)
  • Birla Sunlife Tax Plan
  • BNP Paribas Long Term Equity Fund
  • Canara Robeco Equity Tax Saver Fund – Regular Plan
  • Religare Invesco Tax Plan
  • Tata Tax Saving Fund
  • HDFC Tax Saver

Methodology to select Top 5 Equity Linked Saving Schemes for SIPs or Lump sum investments :

As with any fund investment, when narrowing down to identify the best funds, an error many investors are prone to make is opting for the most recent chart topper. We need to consider the funds’ long term performances and other important factors too while shortlisting the best funds.

I have followed below points/methodology to shortlist best 5 ELSS funds out of the above ten funds.

  • Returns : I have shortlisted these top performing ELSS MFs based on monthly SIP returns and Lump sum Investment Returns.
  • Another factor is ‘the age of the fund’. How long has the mutual fund been in existence? That gives us a chance to look at its performance over long periods of time. Funds with a good track record for the last 5 to 10 years have been preferred.
  • Risk Vs Return : Some funds may generate very good returns but at the cost of very HIGH RISK. We need to look at risk-return trade off also. I have analyzed some of the important ratios to measure risks of mutual funds. These are like Standard Deviation, Alpha, Beta, Sharpe Ratio and overall Risk grades of the funds.
  • I have considered Upside capture ratios and Downside capture ratios. (These ratios show us whether a given fund has outperformed–gained more or lost less than–a broad market benchmark during periods of market strength and weakness, and if so, by how much)
  • I have considered Expense ratio as one of the criteria
  • 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.
  • I have also given importance to “Fund’s Risk Grade.”
  • The primary sources of information are moneycontrol, valueresearchonline and morningstar.

Top 5 Best ELSS Tax saving Mutual Funds

(Click on the image to enlarge or to open it in a new browser window)

Best ELSS Tax saving Mutual funds 2015

  • Axis Long Term Fund has very high Alpha and Low Fund Risk Grade. This fund has been performing really well for the last 5 years or so. This fund has given 5 year SIP returns of around 35%, one of the highest in ELSS fund category.
  • Franklin India Taxshield Fund is one of my favorite funds. This fund has consistently performed well for the last many years. The standard deviation of this fund is also low. Franklin Taxshield is suitable both for lump sum and SIP investments.
  • ICICI Prudential Tax Plan has ‘average’ fund risk grade. You may have to stomach little bit of volatility to get good returns from this fund. This fund has been performing well for the last 10 years.
  • Canara Robeco Equity Tax Saver Fund has given returns of 21.7% during last 10 years ( on lump sum investment). This is the highest among all the above ten funds. The standard deviation of this fund is also low.
  • Religare Tax Saver Fund has given good SIP returns for the last 8 years.
  • HDFC Tax saver was the darling of many mutual fund investors for a long time. Off-late the volatility has been on the higher side for this fund. It also has very low Alpha ratio. Investors who can afford to take high levels of risk can still prefer HDFC Tax Saver.
  • If you consider Returns as the only criteria to shortlist a fund then Reliance Tax Saver Fund can surely be rated as a top ELSS fund. But when you consider other factors like high Standard Deviation, High Fund Risk Grade, high Beta ratio etc., then your decision might change.
  • TATA Tax Saving Fund‘s standard deviation is the lowest of all. It has ‘low fund risk grade.’ But you can not expect abnormal returns from this fund.

 Important points to ponder on ELSS

  • Though the lock-in period of ELSS  is three years only, it is advisable to invest in them with a long-term view. ELSS mutual funds are just like normal diversified equity mutual funds. So, the risk profile associated with them is high. So, you will be better off if you invest in them for long term wealth creation.
  • SIP Vs lump sum in ELSS? Remember that ELSS funds have a lock-in period of 3 years. So, each and every SIP installment will be locked for 3 years. It may be cumbersome when you start redeeming the mutual fund units. If you are not comfortable investing a lump sum amount at one shot, consider investing once a quarter.
  • It is better to opt for the GROWTH option of a ELSS fund. Don’t make the mistake of opting for the dividend reinvestment plan, under which the dividend payout is reinvested to buy more units of the scheme. Every time this happens, the new units get locked in for another three years. (Recently SEBI & AMFI had discussed this matter and asked Mutual Fund houses not to re-invest dividend amount under ELSS category)
  • While diversification is good, over-diversification may not be very good. In the name of diversification do not invest in  multiple funds from the same fund category.

Since ELSS is an equity fund, kindly note that there is no guarantee of return on investment. But looking at the historical performance, ELSS has outperformed traditional options such as PPF (Public Provident Fund), EPF (Employees Provident Fund) and tax-saving FDs (Bank Fixed Deposits) over a long period of time.

Have you invested in a ELSS mutual fund? Do you also think Mutual Fund ELSS is a damn good tax saving instrument? Did you find your fund in the above ‘Best ELSS Tax saving Mutual funds?’ Please share your views and comments. Cheers!

( Image courtesy of Stuart Miles at FreeDigitalPhotos.net) (Above returns are annualized returns of Regular plans with Growth option)

You may like reading my latest article :“Top 6 Best ELSS Tax Saving MFs for 2016.”

Sreekanth Reddy:

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 12 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. These should not be construed as investment advice or legal opinion."

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  • Hi Sir,
    I am 35 years old s/w professional. Recently I have started investing in Axis Long Term Equity Fund – Direct Growth through a SIP of 10k per month. I am a newbie and after reading articles over internet, I have invested in this ELSS scheme for a Long Term (after 7 years from now) purpose. Please let me know if this is a good idea or not.

    Even, I am planning to invest around 8 lakhs (3 lakhs for medium term (i.e., 3-5 years) + 5 lakhs for long term (i.e., after 7 years)) in Mutual Funds in the next 2 years. Hence, kindly request you to suggest me the better choice of Mutual Funds for investing this amount. Also, since I was not able to decide between lumpsum and SIP, hence I thought of going on the safer side and took the SIP option with 10k per month in Axis Long Term Equity Fund – Direct Growth. In case, if Axis Long Term Equity Fund – Direct Growth is a good choice then, please let me know if investing lumpsum of 2 lakhs (i.e., 50k per quarter) in this year is a good idea or not.

    Thanks in Advance,

      • Hi Sir,

        Thank you for the suggestion. Since I am short of 50k under 80c, hence I just started investing 10k/month via SIP in AXIS LTE thinking that it will create good wealth in long term. But primarily I am looking for wealth creation only.

        Thanks in Advance,

  • Hi

    Im planning to invest in MF for tax planning purpose (60000 yearly).
    Kindly let me know which scheme to choose and whether it is advisable to go for lump sum or SIP route

    • Dear Abdul,,
      You may consider Franklin Taxshield and do remain invested for longer term.
      Personally, I make 2 to 5 installments manually in ELSS fund, prefer lump sum to monthly SIPs in an ELSS fund.

  • Dear sir,
    I am requesting you please suggest on below –

    I am 29 years old and next year will get married . I am earning 50 k per month in private IT sector.

    My long time, short time goals are –
    1) 5-6 years – own house through loan may be during down payment need 10-12 lakh
    1) 12-15 years – child education.
    2) 28-32 years – Child marriage.
    2) 20 years – retirement.

    Currently I am investing in
    1. PFF account amount 75 K per year from 2014 .
    2. insurgence policy only for life cover & paying the amount 7 k per year.
    3. recurring account investing 1500/- per month from Jan – 2014. (It has taken for 5 years – total amount it will come approx 1.12 lakh with interest).

    Please suggest me with plan name like ELSS for Axis ….

    Thank you so much 🙂

    -Regards,
    Karthik

  • Dear Sir,
    I am planning to invest RS.3500/- per month in ELSS scheme for next 6 year.Can you please suggest me which mutual fund is better?
    -Thx

  • Hi Sreekanth,

    I am new to these terms, advice me.
    My age is 28, after 10 years i should saved around 2cr – 3cr (I have plans for this savings). I am earning 2l /month.
    Which are the best scheme to invest my earnings. Should I do SIP or lump sum (both are convenient to me).

    • Dear Karthik,
      To accumulate Rs 2 cr in 10 years, at an expected return of 12%, you have to invest around Rs 87k per month (on an average).
      So, you may start with smaller amount as your investment and gradually can increase it.
      You may consider one Diversified equity fund, one mid-cap fund and one small cap fund.
      Ex – Franklin Prima plus, HDFC Mid-cap opportunities fund & Franklin smaller cos fund.

  • Dear Sir,
    I am planning to invest RS.3500/- per month in ELSS scheme for next 6 year. I have one PPF account & investing 75000/- per year from 2014. my target is buy the flat after 5-6 years under 50 lakh through loan. Can you please suggest where i invest the money so i can get the amount around 7-10 lakh for booking the flat. also suggest how much minimum need to invest.

    Thanks.

    • Dear Manish,
      If you want to invest in ELSS fund via SIPs and would like to redeem these investments within 6 years, you need to plan your investments very wisely. Because, the units allocated under each SIP would have lockin period of 3 years.
      To accumulate Rs 10 Lakh in next 5 years at an expected return of 10%, you may have to invest around Rs 13,000 per month.

  • Hi Sreekanth, you briefly touched the topic of “SIP vs Lump sum in ELSS, could you please shed some more light on it. I read an article on Economic Times (https://goo.gl/3jrPYR) which suggests that investing Lump sum in ELSS is certain to give better returns than the SIP. But the table which you have shown in the blog, contradicts the ET article. It would be very helpful if you can comment on this aspect.

    And, one more question; (I am just a beginner) I wanted to know can we invest in lump sum in ELSS or start SIP online through net banking, without any need of going personally to bank or agents? And is Demat account required for this purpose?

    Regards,
    Bharat

    • Dear Bharat,
      Kindly read between the lines..
      Actually the article indirectly highlights the importance of COMPOUNDING – investing early (lump sum amount) and staying invested for long-term.
      In case of a lump sum investment, if one invests say in Jan 2017 to Jan 2027 years then the lump sum amount is invested for entire duration.
      In case of a SIP for 10 years, only the firs SIP is invested for 10 years. Hence there is difference in Corpus accumulation amount.
      The article mainly refers to accumulation amount rather than the RETURNS part.

      It also says that how many of us such kind of one-time big corpus amount to invest. So, if you do not have then SIPs are the alternate choice 🙂 .

  • HI Sreekanth ,
    Thanks for the info i am a beginner for mutual funds and i want to invest 4000/month for perio of 5 years as SIP , could you please suggest me in which mutual fund i need to invest

  • Hi Sreekanth,

    I am 26 years old and have 3SIPs running of around 5500 monthly, one LIC of around 33k yearly, one RD of 5000(started 4-5 months back) and a PPF account(which I use rarely) of 25k. I want to invest around 3000-4000 more on a monthly basis for tax benefits. Time Period- 5Yrs at least. Monthly SIPs are for following funds:

    ICICI Value Discovery (started 1 yr back)
    AXIS LONG TERM EQUITY FUND – GROWTH PLAN (started 1 yr back)
    Franklin India Smaller Companies Fund GROWTH (started 1yr back)

    Also, planning to buy flat in next 3-4 years by paying 25 to 30% as a down payment.

      • Hey Sreekanth,

        Thanks for your revert.

        I don’t remember the name exactly but its a money back policy. Commencement date is Nov, 2013 for a period of 20yrs and every 5th year, i’ll get a 20% of sum assured. As if now, there is no one who is financially dependent on me.

        Thanks,
        Simranjeet

  • Hello Sreekanth Garu,

    Your articles are extremely informative. Kudos to you. Could you please tell me if the below portfolio looks ok to you? I intend to invest 30k/month together in the below funds. My investment horizon is 5-10 years and I do not have any specific goal.

    1.Axis Long Term Equity
    2.Mirae Emerging Bluechip
    3.Franklin Smaller Companies
    4.UTI Transportation and logistics
    5.ICICI Prudential Value Discovery.

    Also, I see that most of the funds are at a 52 week high. Is it fine if I invest lump sum now?

    Thank you!

    • Dear Dilip,
      Good ones. UTI fund though it is sector specific fund, I believe that implementation of GST can have positive impact on the industry.
      As you are investing for long-term, kindly dont wait, invest now 🙂

  • Dear Srikant,

    My Mutual Funds Nav as on 23 August is 8.30 Lakhs(Started monthly SIP’s with Rs.3500 in 2009 and gradually increased to Rs.12500 as on today).

    Investment is 643,253 and return is 186,230 (28.95%).

    I Invested 50000 in Reliance Tax Saver (ELSS) Fund (G) in November 2014 all other are SIP’s(Equity Only)

    I have 100000 to invest now,pls let me know where should i invest? Stocks,SIP”s or ELSS.

      • Birla Sun Life Frontline Equity Fund(G) SIP
        Birla Sun Life Infrastructure Fund(G) SIP
        Franklin India Flexi Cap Fund (G)SIP
        Franklin India High Growth Companies Fund (G)SIP
        Franklin India Smaller Companies Fund (G) SIP
        HDFC Top 200 Fund (G) SIP
        ICICI Prudential Focused Bluechip Equity Fund (G) SIP
        Motilal Oswal MOSt Focused Midcap 30 Fund – Regular Plan (G) SIP
        Reliance Equity Opportunities Fund – Retail Plan (G) LUMPSUM
        Reliance Regular Savings Fund – Equity Option (G) LUMPSUM
        Reliance Small Cap Fund (G) LUMPSUM & SIP
        Reliance Tax Saver (ELSS) Fund (G) LUMPSUM
        SBI Pharma Fund (G) SIP
        UTI Transportation and Logistics Fund (G) SIP

        • Dear Sreekant,Invested Rs.100000 lumpsum in Reliance Equity Opportunities Fund – Retail Plan (G) in Nov 2014,just 6% returns till date,today redeemed half the Units.

          All other funds have given reasonable returns,the below 3 are my STAR performers

          Reliance Small Cap Fund (G) LUMPSUM & SIP RETURNS 24% (STARTED NOV 2014)

          Reliance Regular Savings Fund – Equity Option (G) RETURNS 79% (SIP 2009 TO NOV2014)

          Birla Sun Life Frontline Equity Fund(G) SIP RETURNS 63% (SIP JAN 2011 TO TILL DATE)

            • Dear MALLIKARJUNA ..I believe that you have invested in many funds which may not be that beneficial. May I know your investment objective(s) / financial goals and time-frame?
              You may just pick one fund from each fund category based on your time-frame.
              Read: What are large/mid/small cap funds?
              Kindly check Portfolio overlap among the funds which are from the same fund category, for ex : Birla Frontline & ICICI Focused, as both are Large-cap oriented funds. IF the overlap is on a higher side say >50% then you may drop one fund from your portfolio.
              Read:
              How to check Mutual Fund portfolio overlap?
              How to select the best mutual fund scheme based on risk ratios?
              My MF portfolio.

              • Thanks Sreekanth,Valid point i never thought about it,pls let me know which fund to keep and which fund to redeem and re-invest in other fund which is not over-lapping,my portfolio is purely investment to get maximum returns.

                Sorry,i am asking you too much to rejig my portfolio,i am a layman in this field,just started investing based on ratings in few websites.

                • Dear MALLIKARJUNA,
                  I will surely assist you in re-aligning your portfolio.
                  But suggest you to go through the above articles and do little bit of research/evaluation from your side, once you understand the concepts there is no need for you to depend on anyone else (that’s my point).
                  Kindly do overlapping analysis and revert to me.

  • i have been investing in NSC from past 3years around a lakh rs.
    But as return is taxable i am thinking of moving to ELSS which is better as per you.
    Also how to study these different ELSS options.

    Regards
    Arpit

  • Dear Sir
    I have got sizable money 1.5 lakhs to invest in ELSS fund for long term basis of atleast 5 years & Secondly i have 5 lakhs of my mom to invest in EQUITY BALANCE FUND (GROWTH OPTION) for period of 5 years .
    So calculating market risk what max returns i will get by 5 yrs .
    pls reply

  • I have started 4 SIPs for Rs.10,000/- each:
    1) SBI Bluchip fund
    2) ICICI Pru Value discovery
    3) HDFC Mid-cap Opportunities
    4) UTI MNC fund
    I need to invest another 10K per month for saving tax under 80C. Time horizon is more than 5 years. Kindly suggest which option is the best for me. I am considering the option of PPF even though the lock-in period is 15 years. Pls suggest….if it is ELSS fund then which fund? I was inclined towards Axis Long Term Equity Fund (G).

    Thanks
    Rohit

  • Hi,

    I have a sum amount of 20,000, that i would like to invest in ELSS mutual funds every month. I do invest in FDs but I do not want my savings to jus sit in the bank. Please suggest the best ELSS funds to invest for me. I fail to understand the difference between various types of funds.
    even though after thorough research.
    I am looking for short term investments, probably within 1-3 yr time frame, with a moderate risk, tax benefit. But I plan to start with something to invest for 3-6 months duration until i am sure of how it works and that i can invest in something with a higher risk.

    Thanks,
    Pooja Mistry

  • Hi,

    I have a sum amount of 30,000, that i would like to invest in savings. Please suggest me what are the best options for me. Also consider FDs, Mutual Funds, ELSS, PPFs. I do not have much savings, and my affordable savings from this month is nearly about 25k per month. So please advice where i could invest 25k per month and also the 30 k Lump sum amount.

    Thanks,
    Gaurav.

      • Hi Sreekanth,

        I am looking mostly for 3-5 years investment, and also tax savings preferably to be one of the funds.I plan on investing 10k as RD monthly and remaining on Mutual Funds or elsewhere. So could you guide me with the best options. Investment options are just to get a sum amount of return after 5 years for probably marriage.

        Thanks,
        Gaurav

          • Basic reason for selecting RD is to have a sum amount after 1 year, in case i need for any unknown emergencies.I have decided to go with the following plan.Please advice if this is fine.
            In SIP mode:
            2500-Franklin India Smaller Companies Fund- 5 years
            2500-SBI Magnum Mid cap Fund-3 years
            2500-Axis long term Equity Fund-5 years
            2500-HDFC Balance Fund-5 Years

            So what would be the best option for the 10K remaining?RD or something else. And also the 30k lump sum amount?

            Thanks,
            Gaurav

  • I have read you post, here you describe benefits of investing in ELSS mutual funds and it’s a very useful for tax saving. Thank for sharing this knowledgeable post.

  • Hi Sree,

    I’m nearing 40 yrs and would like to invest money in ELSS for my retirement and child education who is in 2nd standard now. Kindly suggest the best plan.

    Thanks,
    Ayoob

  • Hi Sreekanth,

    I’ve been investing in
    1.Axis ELSS -1.5k per month
    2. Reliance ELSS – 3k
    3. Franklin Templeton Tax Shield – 2k. All are Direct / Growth for an year now.

    I’m thinking of starting of another SIP of Escorts ELSS. If I do so, do you think my portfolio becomes over diversified. If so why. ?

    What are my different options to stay invested in MFs other than increasing the existing folios SIP amount.

    I already have LIC bonds worth 45k/year. Under 80C.

  • Hi Srikanth,

    I am 40 year old & want to invest in tax saving sip please suggest best performer fund.
    my yearly income is rs-4.5 lacks

  • Hi Sree,

    Hope you and your family are doing good.

    After a long time I am writing this blog. Hope you aware of ICICI MF introduced a NFO (ICICI Prudential India Recovery Fund – Series 7 – Close Ended ) fund. Can we buy this one?

    what is your opinion on this fund?

    Goal: There is no specific goal. For my future life.

    • Dear Rajagopal,
      ICICI Prudential India Recovery Fund – Series 7 is a close ended fund. The tenure of the plan is 1100 days (3 years) from the date of allotment of units.
      Suggest you not to invest in NFOs as we have plenty of Equity Schemes which are well-performing with proven track record.
      If your aim is to accumulate wealth in long-term, you may consider investing in a well diversified equity fund.

      • Thanks for the advise Sree.

        Let me check some good diversified equity fund. However, kindly provide me a few fund name where I can invest some amount ? Also please let me know, Is that investment can be a lump sum or it should be a SIP (for 10 years period for Rs 50,000)?

        Thank you so much for your time and help.

        Thanks & Regards,
        Raja Rajagopal

          • Hi Sree,

            Good Morning. Hope you and your family are doing good.

            I had invested Rs. 25,000 as lump sum in
            Franklin India Prima Plus (Diversified)
            ICICI Focused Blue Chip (Large Cap)

            I may need some bulk amount to my sister’s daughter study after 3 year. and I have some amount in my hand now (Rs. 70,000).

            Exactly I do not know, How much I may need at that time. But need some amount.

            Can you please guide me, where I can invest this money? or As you mentioned, Can I go head and select some more diversified fund and invest?

            You advise can help me a lot.

            Regards,
            Raja Rajagopal

              • Thanks Sree for the advise. Let me check the Balanced Fund and MIP MFs.

                Regards,
                Raja Rajagopal

                • Hi Sree,

                  I have invested Rs. 15,000 each on the below two Balanced Funds .
                  HDFC Balanced Fund
                  TATA Balanced Fund.

                  Planning to invest the remaining 60% into MIP’s funds. Checking your blog for good MIP’s.

                  I need one more advise. I have plan to get new bike by next year June or July. For that I may need 80,000 that time. Instead of taking from the savings account that time, Can I invest in some fund for short term to get this. If so, what kind for fund I can choose and how much I need invest?

                  Need your advise on this.

                  Thanks & Regards,
                  Raja Rajagopal

  • Hi Sreekanth,

    I’ve been following your posts and they are very informative. Thanks for all the good work done!

    I’ve been invested in following 3 Tax saver funds for a fairly long time. I don’t need these from tax saving perspective.

    HDFC Taxsaver – Dividend (current value: Rs. 93k)
    HDFC Taxsaver – Growth (current value: Rs. 32k)
    L&T Tax Advantage Fund – Dividend (current value: 113k)

    For the Taxsaver Dividend funds, I started SIP of Rs 1.5k in Mar/2006 and stopped them after 2-2.5 years. The Growth fund was a lump-sum investment of Rs. 10k in Feb/2006

    My Investment Goal (in view of above fund): To secure fund for my children’s education in next 3-5 years (currently elder son in 8th and younger in 6th standard).

    Kindly suggest where and how (one time/periodic) to invest the amount if I redeem all of the above funds.

    From long term perspective, for last 9 months I’ve been doing SIP Rs. 25k distributed in following 4 funds. Are these good funds from long term pov?
    HDFC Mid-Cap Opportunities Fund(G)
    ICICI Pru Focused BlueChip Eq Fund(G)
    Mirae Asset India Opportunities Fund-Reg(G)
    UTI Dynamic Bond Fund-Reg(G)

    Thanks,
    Manoj

  • Dear Mr. Reddy

    Please advise me the best ELSS category Mutual fund for investment during 2016; I have already invested in BNP, Axis and Reliance in the past. Also advise me two mutual funds in the non-ELSS category; I have already invested in SBI Blue Chip and SBI Emerging business fund in the past.

  • Dear Shreekanth ji,
    My yearly income is about 9.5Lakhs. i am short of 50k in my 80C still for this year. i can invest this 50K in one shot. pls suggest best tax saving fund . i can hold it for long term .

  • Hi Sir,

    My Income is 6 – 7 lacs and I am able to invest upto 5000 PM for ELSS. Please suggest some good plans to invest in ELSS.

  • Hi Sreekanth,
    I am 28 years old.still i didn’t started any saving.After seeing your block i thought to save.Could you please suggest me the best plan to save.I had package of 6.9 Lakhs.
    My main purpose is for health.
    Wealth creation for future and planing for home after 4 years.
    I am unmarried.
    Thanks
    kumar

  • hello sir,

    my income bracket is 5.5 lac to 6 lac. I am govt employee. And i am having only lic worth 19000. i need to save another 130000. and for that My plan is

    PPF 20000
    FD 45000
    SIP 6000 per month.

    please suggest me fund name and and please allocate this 6000 pm to those

  • Sir
    today i have taken reliance retirement fund and axis long term equity fund as bank manager told me that reliance is good.
    But after seeing your reviews i have chosen wrong product it is possible to cancel sir please suggest me
    i will buy franklin.

  • Hello,

    I am a student conducting a study on Reasons affecting the performance of Best and Worst Performing Mutual Funds in India concerning Private Open-Ended Equity Mutual Funds.
    Can you please tell me from where I can get data so that I can pick 5 best and 5 worst performers of Mutual Funds and how?

  • Hi ,

    Good to see your support in planning financial investments.

    I am willing to start investment in ELSS for 5 years. Please suggest me a good MF with low risk and reasonable returns.

    As per Life insurance which is good (Term or Whole life)..?Suggest me one.

    Suggest me one pension scheme. Is PPF suggestable..?

  • Hi,
    I am 27 and my dad is 62. I am new to investments. I need to invest 1.5 Lakh for dad and myself(total 3 Lakh per annum).
    I approached policybazaar and they have been emphasizing on ULIP HDFC click2invest as that has minimal charges like no allocation, no agent, no charges if I discontinue etc.

    Then I searched online and found that ELSS is recommended by many. With 5-10 yrs in mind, what would you recommend for me and my dad. I have to do lumpsum this March. Should I make it SIP i.e. monthly payments starting April? Should I spread the amount in ULIP & ELSS or ELSS only?

    • Dear Vineet,
      Before shortlisting a financial product, kindly be clear with your investment objectives.
      Saving taxes alone should not be your motto. Let me know your financial goals.
      Also, what is the investment objective(s) in case of your father?
      Kindly plan your taxes from the beginning of a FY itself.

      Personally, I prefer to invest in equity mutual funds (can be ELSS) to ULIPs.

      • Your reply and input is appreciated. Just like majority of people, tax saving and maximum growth are the only objectives. Both of us are in 30% tax bracket so we must invest starting present month. We both have our separate business.

        Yes I realize the importance of starting from April.

        1. If possible, kindly look into HDFC’s click2invest and then advise how much should be invested where for both of us.
        2. You have mentioned on this page “There is no upper limit for investment in ELSS but the maximum tax benefit is limited to Rs 1 lakh under Section 80C.”………..Isn’t that 1.5 lakh?

        3. Nobody has clearly mentioned 10(10D) for ELSS. Why?

        • Dear Vineet,
          1 – As mentioned in my previous comment, investing in MFs can be a better option than investing in an ULIP (though HDFC click2invest is one of the cheapest ULIPs that we have).
          2 – In the article or in any comment? If so, that can be a typo error, kindly read it as Rs 1.5 Lakh.

  • Hello Sir,

    I am totally new in the field of MF,SIP,ELSS. My annual package is 7LPA. I wanted to invest 10k every month for more returns and tax exemption.I have the following tax saving structure;
    1) CPF/GPF- RS 5755 per Month
    2) PPF- 1000 per month
    3) LIC e term plan – 2525 annual for 10 years

    Now i want to invest in MF- m torn between SIP and ELSS..i cannot invest more than 3k per month in this sector and i am looking for long term investment.Long as in >10 years.

    Also i was thinking of investing 1k in postal life insurance per month.

    I am a salaried person, and lumpsum investment does not work for me.

    Please guide me.

    Regards,
    Remya P

    • Dear REMYA,
      Kindly note that SIP (systematic investment plan) is a type of investing method (like lump sum investment) and it is not an investment product as such.
      Whereas, ELSS is a tax saving mutual fund scheme.
      If your investment horizon is 10+ years and one of your investment objectives is tax saving, you can definitely consider investing in ELSS fund.
      Ex: Axis LTE fund / Franklin Taxshield fund.
      Kindly read :
      Best ELSS funds for 2016.Best term insurance plans.
      Financial planning pyramid.You may avoid buying a postal life insurance plan.

  • Dear Srikant,

    I am Earning 750000 per year .
    My EPF proposal is 5000 per month .
    I am having 30000 per year LIC policy .
    Just wanted to know is this good idea to invest in EPF or should I change my investment plan .

    I am also considering 5k per month investment in ELSS fund and wanted to know after 3 years would there be any tax on any part of my money in ELSS fund .

    Please advise me .

    • Dear Altaf,
      It is mandatory to contribute to EPF right? (or) are your referring to Voluntary contributions?
      Any capital gains you make on redemptions (ELSS fund) are tax exempted.
      If possible, do share the plan name of LIC (plan name, commencement date & tenure)

  • Hi Sreekanth,

    Good Morning. Hope you are doing well.

    This month one of my FD is getting matured. Shall I goahead and renew the amount in FD itself or Can I go ahead and invest in some good MF or liquidity fund? (which is best?)

    I have already started and investing Rs. 2,000 on each fund in SIP basis on the following funds. (From Feb 2016)

    1. Franklin Templeton Smaller Companies
    2. IDFC Premier Equity Fund – Regular Plan (G)
    3. ICICI Prudential Value Discovery Fund (G)
    4. AXIS Long Term Equity Fund

    If could advise me, it will be very helpful.

    Regards,
    Raja Rajagopal

      • Hi Sreekanth,

        Good Morning. Hope you are doing well.

        Thanks for the reply and time.

        Actually I have started as SIP in AXIS Long Term Equity Fund (ELSS for 3 years). But now I read your statement “SIP Vs lump sum in ELSS?”. I think I have done a mistake. Ok.. anyway past is past.

        I have mentioned in my earlier post rite, today I withdraw my FD (Rs. 85,000) . May be after 5 years I may need this money. so I am planning to invest in the following fund.

        1. ICICI Pru. Focused Bluechip Eq. Fund (Rs.21,250)
        2. Franklin India Prima Plus (Rs.21,250)
        3. UTI Mid Cap (Rs.21,250)
        4. Franklin India Taxshield Fund ELSS (Rs.21,250) as one time investment for 2016-17 year tax planning.

        Please let me know my above portfolio looks good or need any change.

        Note: I am doing all these investment through a agent only. Is that fine?

        Sorry to disturb you again and again.

        Thanks & Regards,
        Raja Rajagopal

          • Hi Sreekanth,

            Thanks for the reply. So, May I know the reason to reduce the allocation of UTI mid cap? Also please advise me other fund to invest?

            But I need your advise to invest on which fund? one time is fine or go with SIP process?

            Note: I have gone through your “15 Top Performing Equity Mutual Fund SIPs in India”.

            Thanks,
            Raja Rajagopal

              • Thanks Sree.

                I will go with your advise. so you are saying compare to UTI, Franklin Prima Plus / ICICI Focused will give good return rite.

                shall I go and invest by calling a agent? Is the fine?

                Regards,
                Raja Rajagopal

                  • Thanks Sree for your reply and clarification .

                    I will try to do a direct plan. will create an account using MF utility. Actually I am new to this MF utility. Till now what ever investment I did through distributor only.

                    Thanks,
                    Raja Rajagopal

                • Hi Sree,

                  Hope you are doing good. Could you please clarify me the below point.

                  I have started SIP (Rs.2000) in Franklin India Smaller companies through agent (Regular Plan). Now I want to invest additional (Rs. 1000) to the same fund via Direct Plan. (through MF Utility).

                  Can I do like that? or the additional investment also goes with RP only.

                  Appreciate your advise.

                  Thanks,
                  Raja Rajagopal

                    • Thanks Sree. Planning to invest additionally Rs. 1000 (currently it is Rs 2000) into Franklin India Smaller Companies and ICICI Pru. Value Discovery. I feel like you are taking care my future.

                      Thanks,
                      Raja Rajagopal

  • Good Morning Sir,

    i want to make 3 crore in 10 years for this i am investing in 1. uti retirement 2. uti bluechip 3. sundaram smile 4. hdfc top 200 5. hdfc infra 6. hdfc taxsaver 7. sbi emerging 8. sbi pharma 9. dsp micro 10. franklin tax shield 11. franklin smaller co. 12. franklin high growth 13. franklin india build. 14. icici long (tax) 15. axis long (tax) 16. uti ulip, from last 2 years via SIP rs. 1000 in each fund except tax saving (in tax saving rs. 20000/- p.a SIP).

    now i want to restructure portfolio, so i can achieve target as early as possible. need some suggestion from your high hand.

    regards
    rajkumar

  • Dear Sir,
    Congrats for Nice article .
    Please suggest
    I want to invest in ELSS Rs 1Lakh Lumpsum for three years locking First time (For saving tax)
    Please suggest which fund will be safe & having good return

  • Hello Sir,
    Please advice me to Choose MF for,
    1. Daughter education/marriage, time frame 18 years
    I have Axis LTE MF recently for tax benefit & term insurance & family health insurance recently.
    My age 30.

  • I am already in the brink of breaking into the 30% tax slab. I already have exhausted all tax saving options. Now i would like to invest for long term return (say 5 to 10 yrs), where there won’t be any tax when the investment matures.
    Suggest any investment options where i can earn at least 10% return. Don’t have any ELSS investment as of now. Age is 43. Dependent wife and 2 kids of age 15 and 13

  • I was searching for ELSS story and got your article, its nicely written.

    I’m regular Mutual Fund investor across many Mutal Fund Houses, but not with ELSS.

    My purpose of this post, i have read about ELSS but i have one doubt.

    If i start a SIP in ELSS mutual fund for Rs 1000 a month and it will be lock-in for 3 years.

    1) After three year period should i start SWP (systematic Withdraw plan). so that i don’t have difficulties in remembering to withdraw each montly amount, is this possible.

    2) For long term, say for a period of 5 to 10 years, does SWP works.

    What is the differenc between Birla sun life Tax plan and Birla sun life Relief 96.

    Thanks

      • Thanks for the reply,

        My big question with ELSS, as it comes with 3 year lock in period and every SIP is treated as a fresh investment, i find, it could take another 3 year to completely redeem the amount.

        If one goes for more than 3 year period, he/she needs to wait the same period to get back the total amount.

        Do you suggest its best to hold for fixed 3 year lock in period even if the fund is doing well and start SWP afterwards.

  • Dear Sreesanth,
    Good Article and Nice analysis.
    Thanks for sharing.

    I am 27 yrs old now I want to invest monthly 5k to save my tax, currently I have two LIC like Bema Gold –5,00,000 and Jeevan Anand -2,20,00 other than that I don’t have any savings & Insurance , I came over your “If Life is unpredictable, INSURANCE can’t be optional” Article I got confused where to invest MF or Life insurance or any there?, kindly advise me.

    Thanks in advance

  • Hi, I am a retired person aged 60 years. I want to invest 50000 to take advantage of investment under 80 c of I Tax. pl advice which fund to invest for better returns. period not more than 5 years.

  • Hi,

    I am new to market.

    I wish to buy ELSS for a short term i.e. for minimum lock in period of 3year.

    i need your advice that which is the best ELSS -MF for me according to short term scenario.

    Thx / Narinder / 99587933**

  • HELLO SIR ,

    I WANT TO START SIP , I CAN INVEST 3000 PER MNTH AS I’M INVESTING FOR THE FIRST TIME , I DON’T HAVE ANY MARKET KNOWLEDGE , KINDLY GUIDE ME WHERE TO INVEST . I’M LOOKING FOR LONG TERM INVESTMENT .

  • Hello Sree,

    I am a new investor in Mutual fund market. I just want to start a SIP for Long Term in Equity Fund and also some SIP in ELSS scheme for Tax Saving
    Kindly suggest me some good option for both SIP

    1)In Long Term Equity fund i am thing of Investing in SBI blue chip Growth fund and SBI Magnum Growth fund. Want to know your opinion on both
    2)For ELSS please suggest your option

  • Hi Sree,

    I opened an AXIS ELSS SIP few months back and has cancelled now as I want to invest in lumpsum..
    My question is, Can I get my invested money back now by redeeming the units or is it not possible because of the lockin period of 03 years.Please guide….

    Thanks,

  • Hello

    i am investing in
    ICICI Bluechip fund
    ICICI pru Discovery fund
    BNP paribas long term for tax saving
    and also i am investing in
    ICICI Prudential Money Market Fund – Direct Plan – Growth
    and also i invest LUMP SUM Time to time when i have excess money in ICICI Prudential Money Market Fund

    I am also Thinking of investing in AXIS Long term ( ) for tax rebate with BNP Paribas.

    Please tell me about my portfolio is there anything you want to change or add please tell me.
    is Balanced fund is necessary for me if yes then which one?
    and i want to increase my investment then in which fund i have to invest

    Please guide me because i want to invest atleast for 15 years.

  • hello

    i am investing in bnp tax and icici bluechip fund and overlap is about 32 %
    and
    if i consider axis tax instead of bnp then overlap is 23 %
    should i remove BNP or ELSS and equity mf no need to compare
    ?

  • hello

    I invest in SBI FMCG fund three years ago but at the moment there is no return except dividend ,i want to know should i stop SIP in this fund and withdraw money or i stop SIP and wait for budget because it is sector fund
    please tell me is any good future of this fund or not

    • Dear Nitish,
      Kindly invest in a mutual fund with clear cut investment-horizon in mind.
      Also, for long-term goals, suggest you to opt for ‘Growth’ option instead of the ‘dividend’ option.
      The factors like budget or RBI policy should not totally determine your investment timing. Kindly stay invested and continue your investments.

      • hello

        thank you for your valuable feedback

        but i want to tell you some one who is also a market expert suggest me to stay away from sector fund because no one knows how a particular sector perform in future.instead of sector fund invest in different fund
        like
        one large cap fund ( i have icici bluchip)
        one small and mid cap( i have icici prudential discovery fund)
        and
        a tax saving fund( ihave BNP and also i am starting in axis long term fund)
        due to which i start investing in ICICI blue chip fund in place of SBI FMCG. and i am in that fund not because of budget , i start investing in that fund with my long term scenario but because that fund is sector fund everybody ask me to come out from that fund
        and i am big fan of your blog thats why i want your suggestion.
        Is it right?
        and the other thing should i need one more fund or i increase investment in same funds.
        please tell me.

        Thank you
        Nitish kumar

        • I have
          Icici bluechip
          Value discovery
          And BNP LONG term
          What else fund I require in my portfolio either its debt fund or balanced fund please tell me the name as well.

  • HELLO

    I WANT TO INVEST LUMPSUM OF 50000 RS IN TAX SAVING FUND
    RIGHT NOW I AM INVESTING VIA SIP IN BNP PARIBAS TAX SAVING FUND
    I WANT TO KNOW FOR THIS LUMP SUM AMOUNT WHICH FUND I CHOSE I AM VERY CONFUSE
    EITHER
    ICICI TAX SAVING FUND ( WHICH HAS AVERAGE RISK BUT ADVANTAGE IS IT IS 17 YEARS OLD FUND)

    OR

    AXIS TAX SAVING FUND WHICH IS PERFORMING WELL AND LOW RISK AS WELL BUT IT IS JUST 7 YEARS OLD.

    OR
    SHOULD I INVEST IN BOTH HALF HALF MONEY IN BOTH OF THE FUNDS BECAUSE OVERLAPPING IS ABOUT 23 % WHICH IS NOT ANY CONCERN .

    OR I INVEST LUMP SUM IN MY CURRENT FUND

    PLEASE GUIDE ME SO THAT I FEEL SECURE AND HIGH RETURN

    AND MY SECOND QUESTION IS I WANT TO START ONE MORE SIP IN TAX SAVING FUND
    WHAT I CHOOSE
    SHOULD I ADD ONE MORE
    ICICI/AXIS
    OR
    INCREASE SIP IN BNP

    PLEASE GUIDE ME ITS URGENT

  • Dear Sreesanth,

    Kindly guide me to choose the best scheme in ELSS( tax saving SIP) monthly saving rs.3000, whether i want to invest the amount in one fund or multiple funds- for the benefit of tax and returns.

    Apart from tax, for the benefit of future i want to invest in SIP, which fund i have to choose kindly guide my monthly contribution will be rs.5000, same question how i want to diversify this amount.

    Thank You,
    Pradeep

  • Hi Sreekanth,

    This Raja Rajagopal. Really your advise is very good for the people who wants to save some money for their future and kids study and marriage. I am planning to invest some amount (Rs. 50,000) in ELSS MF for tax purpose for this year.

    Here is the list: (from your list only)
    Axis Long Term Equity Fund
    Franklin India Tax Shield Fund
    ICICI Prudential Tax Plan – Regular Plan
    Canara Robeco Equity Tax Saver Fund – Regular Plan

    Can I go-ahead and invest on the above ELSS MF?

    Thanks & Regards,
    Raja Rajagopal

  • sir what is your opinion about rajiv gandhi equity saving schemes under 80CG. is it good or not to invest.

    • Dear abhishek,
      It is not a financial product as such but it is a scheme for first time investors in stock market through demat account.
      The maximum Investment permissible for claiming deduction under RGESS is Rs. 50,000.
      I believe that if you do not have expertise in picking stocks, it is prudent to invest in equities indirectly through equity mutual funds.
      Kindly do not invest in financial products just to save some taxes.

  • Hello Sir,

    I have following SIP for future planning..

    (1) 1000/- HDFC Child Gift Investment for my daughter (9 month only) for Education / marriage…..
    1000/- HDFC Balance Fund for my daughter (9 month only) for Education / marriage…..

    (2) 1000/- BIRLA Sun life front line equity growth for my wife gift….

    (3) 1000/- ICICI Focus bluechift growth for new home / car
    1000/- ICICI Value Discover Fund for new home / car

    (4) 2000/- Reliance Tax Saver ELSS For Tax Saving / Retirement
    1000/- Reliance Retirement Welath Creation Growth For Tax Saving / Retirement

    Dear Sir,

    Please let me know my above planning is write or wrong

    please if any change above planning, let me know….

  • This may be silly question but I’m asking anyway… How I can get the invested fund certificate for submitting to my office for tax calculation?

    • Dear Adhya,
      No question is silly…
      Normally you would have received the MF account statement (periodically) to your email-id. You may take a copy / print of it and submit.
      You can also request your fund house to email the account statement.
      You can also request it online via CAMS or Karvy etc.,

  • Hi Sreekanth,

    This is a good article. I have one question about ELSS. Which is the best way to start investing in ELSS? Do I need fund manager or I can start investing online myself?
    Thanks in advance.

  • Hi Sreekanth,

    I am willing to invest 30-40 thousand yearly.Now my age is 24 years.I earn 30k montly and I already have two LIC polices-both worth 5 lac assured,two health insurance policies.Would ELSS mutuals funds are preferable.If yes please suggest some of the funds.

    Regards,
    rajesh.

  • Hi, Could you suggest approximately how much to put aside for Retirement savings every month/year?? There is no hard and fast rule, but how much % of our net income do u suggest – putting aside all the savings and expenses.

    • If you start 20-30 years of age 10% of your annual income, over and above the PF and Superannuation contributions. Otherwise 15-20% of your annual income. maintain this throughout your working career.
      If start between 31-40 years of age make it 15-18% (if you contribute to PF/SA) otherwise 25-27% of your annual income.
      If you start after 40 years of age make it 25-27% (if you contribute to PF/SA) otherwise 30-33% of your annual income.
      If you start at 50 years of age make it 35-40% (if you contribute to PF/SA) otherwise 60-65% of your annual income.
      After this you may not be able to accumulate sufficient funds, without significantly sacrificing your current living standards. It become more difficult to save as there are additional responsibilities for children’s education /marriage etc.
      If you invest in a house for living (count it as retirement saving)

      • Dear NKT,
        For a long-term goal like retirement, do you prefer only PF/SA ? Kindly share your views on equities or equity oriented products?
        Shouldn’t be they part of the portfolio?

  • Hi Sreekanth,

    Very nice post and quite helpful..
    can you suggest any ELSS I want to invest now.

  • I need to know about future plans.
    I dont have any saving with me yet. Going with 1 personal loan for 4 years 10k per month.
    Have 2 LIC policies. I am 34, with wife( home maker) and 2 kids .
    Please suggest what to do. I earn around 60k in IT farm.

  • dear sir,
    am rahul, i would like to deposit 10k every month for saving, iam 28 year old . so please sugest me a better and good return and tax saving scheam.

  • Hello,

    I am relatively new to this concept of ELSS. I would like to try my hand at investing in ELSS this time. I am however, unable to find adequate information such that I can make this decision. I would like to invest about 1.5 l for a lock in period of 5 years. I want to know what factors should I consider before making a decision of which option I should consider?

    I do see that you have given some options here, but how do I determine which one is considerably high on returns and not so risky?

    Regards,

    Vinila

    • Dear Vinila,
      Do you need this money after 5 years? Is this investment towards any specific financial goal of yours??
      Do note that ELSS fund units have lock-in period of 3 years. ELSS funds are share market linked ones, they fall under high risk category.
      But these are best suited if an investor’s investment objective is long-term wealth accumulation & tax savings.

  • HI ,
    i am 25

    I never invested anything before ..But now my salary becomes becomes so i want to invest .Please let me know what are the best ways to invest ..

    I am planning to open PPF and invest 50k ..
    I am also planning to invest ELSS upto 1l akh..Please let me know which funds are good to invest and whether i have to invest everything in single one or multiple…some guidelines will be better.

    Thanks
    Suresh

    Thanks
    Suresh

    • Dear suresh,
      Do you contribute to EPF scheme? You can may consider investing in ELSS fund by creating a monthly SIP. Franklin / ICICI / Axis ELSS fund can be considered. Do note that units will be locked for 3 years.

  • I want to invest in only in ELSS for Rs 100000/-.I wish to invest in Edlewis Rs30000/-,In Axis Rs 15000/-,in Franklinton Rs 30000/-,inReliance 25000/-.Please guide me by chalking best investment in mf and time of investment .SEND REPLY TO MY EMAIL

  • Hi Sreekanth,

    I am a working professional in Noida and currently I am able to invest Rs 1.5lac p.a. in PPF. Moreover I want to get more returns/Capital Gains and though ELSS aa a good option. As of now I don’t have any knowledge about ELSS (Got to know about it yesterday while reading news paper).

    Could you suggest me more about ELSS. Do also clear as I got to know that these are high risk investments.

  • Hi Sree,

    Could you please help me to understand the concept of GROWTH option and Dividend reinvestment plan in ELSS and also for ELSS SIP

  • Hi Sreekanth,

    I am 28. I am married.I have not done much investments till date expect for investing in NPS on a monthly basis contributing about 2-3k. (This is for the retirement plan)

    For long term plan I.e. 10-15 yrs m planning of investing SIP of about 5k a month in ELSS (for good returns and tax savings) can I go with axis lte and Franklin ???

    Is there any other investments that I have to be aware of.?? Am I missing on investing in anything?

    Thanks,
    Ramya

    • Dear Ramya,
      ELSS is a better option for your long-term goal and for tax savings purposes.
      NPS is not a great choice. As per current tax laws, maturity proceeds are taxable. PPF can be a better savings, small allocation can be made towards this in your portfolio.
      Axis or Franklin ELSS funds are good ones. You may opt for one.

  • Hi Sree,

    I have invested in one of the ELSS Mutual Fund in this current month and I want to know that the amount invested in these last few months will be eligible under Section 80C for this FY or not?

  • i am 57+ years old . i need some corpus fund 1 crore at the time of retirement at 60. major savings is vpf . if needed i can withdraw money from pf to invest in other scheme. i have a daughter of 15 years old and eldest daughter is working in a consultancy firm in bangolore. suggest pl

  • Dear friend,
    I planned to invest equally in elss of axis, birla, and icici in sip for tax saving.. these are good options? or can i invest in single fund ?
    if i choose dividend option, i can invest it again in elss, so i can save more tax.. is it right?
    pls suggest..

  • Hi Sreekant,

    I plan to invest Rs 1500 in tax saver equity fund. I plan to continue this for 15 years (if poss increase the sip amt in between)., the whole intention is to create a corpus amount by end of 15th year. Which funds would you suggest?

  • Hi Sreekanth
    I have started investing in Axis long term fund . Aim is to build corpus for my daughter’s marriage. she is now 3 years old. So this is a long term goal. Planning to invest 80k to 90k annually (no SIP). My question is , is there any major difference between ELSS and normal diversified fund like franklin prima plus. Is my selected method of investment for the above mentioned goal is OK with you? .
    thanks in advance..

  • I have around 40000 premiums of LIC and generally I invest in FDs, PPF and NSC bonds.
    Along with above investments and EPF,VPF I have enough 80c investments(1.5lac).
    Apart from above just I started investing 3k/month in SIP(Icici blue chip) from last 8 months.
    I don’t have knowledge in investing shares, equities, MFs.

    Could you please suggest me a good investment plan which can be beneficial at long term and also can be tax exempted other than 80c.
    Is NPS considerable? I don’t believe in pension after such a long years (repayment of retirement)?
    Is ELSS schemes considerable? which one you would suggest?
    Which one is best ELSS or NPS?

    Am I investing wrong, please suggest me the best options.
    Your answer is really help full to me in financial planing…

    Thanks in advance
    Pradeep

    • Dear Pradeep,
      May I know your age? Do you have family member(s) who are financially dependent on you?
      ICICI fund is good one.
      You may avoid NPS. As your 80c bucket is full, can avoid investing in ELSS funds too.
      For long-term goals – Start investing in few more equity oriented funds. Kindly share more details about your financial goal(s)..
      Do you have Personal accident and health insurance covers?

      • Hi Sreekanth,
        Thanks for your reply. That will definitely help me. Here are few more details about me.
        I am 35, married. Wife is home maker. Got two kids (2girls) of 6, 2yrs. Working in IT firm with more than 50k per month. Future is uncertain :-).

        My long goal is to give the best education to my kids and give some worthy property.
        Short goal is to buy a flat/house in next 1 year or so. I think I can manage with FDs and also will go for home loan.

        As you suggested please let me know the best equities to invest. With low risk(I expect atleast FD interest rate at the EOD). I don’t have experience in direct investments in shares. Even I have no idea on equities. Please share all details about equities, and pros and cons. I have no personal accident insurance. I have group(company provided) health insurance. However as said earlier I have below LIC policies.
        jeevan anand – sum assured 4lacs – 15yrs
        jeevan mitra – sum assured 1lac – 21yrs
        endo assurance – sum assured 1lac – 21yrs
        I can spend atleast 5k per month. Alos please note that 80c is not fully filled with anual premiums. I am investing in NSC bonds yearly to reach 1.5lacs.

        Thanks
        Pradeep

        • Dear Pradeep,
          Future is uncertain for everyone. Hence we got to plan with available resources 🙂
          Your first priority should be to get adequate insurance covers.
          Kindly read : Why insurance is important?
          Invest in FDs only to accumulate your Emergency fund. Do not invest in them for longer-period.
          Kindly read :Why you should not invest in FDs for longer periods?
          Kindly take a term insurance cover and then discontinue all your LIC policies. They are not worth.

          Read:
          Term insurance Vs traditional plans.
          How to get rid off bad insurance?
          Top term insurance plans.
          Best personal accident insurance plans.

          You can consider investing in ELSS fund for long-term wealth accumulation as well as tax savings purpose.
          Read :
          Best ELSS funds.
          How to invest in Direct plans of MF Schemes?

          • Hi Sreekanth,

            Thanks a lot for your quick reply. That would really help me in planing.
            I will take the term insurance plan at the earliest.
            I will discontinue the existing LIC policies appropriately.
            I paid 6to7 installments, shall I surrender them or convert to paid-up. please suggest me according to my policies.
            ———————————————————-
            jeevan anand – SA-3lacs–startdate-JUL2008–policy term-73(15yrs)-payable yrly-Rs.22893–vested bonus-Rs.69600–
            next premum due-JUL2016

            jeevan mitra – SA-1lac–startdate-JAN2009–policy term-21(21yrs)-payable yrly-Rs.5267–vested bonus-Rs.30000–
            next premum due-JAN2016

            endo assurance – SA-1lac–startdate-JAN2009–policy term-21(21yrs)-payable yrly-Rs.4704–vested bonus-Rs.28800–
            next premum due-JAN2016

            jeevan anand – SA-1lac–startdate-JAN2009–policy term-73(21yrs)-payable yrly-Rs.5243–vested bonus-Rs.28000–
            next premum due-JAN2016
            —————-

            Also could you pls pls answer below all queries.
            1) First policy(3lac) premium paid recently, shall I close/convert that also?
            2) For rest shall I pay the january premiums or shall I close/convert before that date?
            3)Are the premiums paid for term insurances excempted under 80c?
            4) Which policy-provider would you suggest?
            5) Are ELSS and equities same? What is the risk factor? I heard they charge upto 30% of the premiums as service charges, and they buy units with remaining amount? So If we stop investing after 3yrs, that will lead to -ve balance hence we don’t get any returns. Please share the facts.
            6) please suggest the best schemes. I will go with that only.

            Thanks
            Pradeep

            • Dear Pradeep,
              You can make them PAID-UP. But do take term plan before you discontinue these policies.
              1 – You may wait till next due date.
              2 – You can make them PAID-UP. But do take term plan before you discontinue these policies.
              3 & 4 – Yes. Kindly read : Best Term insurance plans.
              5 – Equities are shares. ELSS are mutual fund schemes. I believe that you are referring to ULIPs (unit linked insurance plans). Avoid ulips.
              6 – ELSS are good for tax saving and long-term wealth accumulation purposes.

  • Dear Sir,

    I work as a manager in an MNC and my ctc is around 16 lakhs per annum. Till now I have not done any investment in Mutual Funds etc.. I had a Home Loan since 10 yrs that is now nearing completion. Besides this I have LIC policies of about 1.5 lakhs per year. I get about Rs.13 000/- income tax deductions every month and want to reduce as much as possible.

    I have a kid of 7 yrs old and I want to start investing on her name as soon as possible

    Can you please advice me on my current situation – which mutual fund to invest and where.

    I keep on getting mails from HDFC securities on Axis long term equity ELSS and NPS .

    Please advice ,

    Thanks,
    Prasad

  • Hi Sreekanth ,
    I am 35 y old businessman . married with no kids . My monthly expense is 25k . How much saving should I have for retiring by 2020 ( in another 5 years) with current family strength . my parents are not depended on me. I have a house and some other properties. I don’t have any liabilities . i have investments in equities.
    Regards

  • Hi Sreekanth,

    Need your assistance regarding 4 else funds which I am planning to invest within couple of days.

    Before that I have a confusion regarding the following funds. Every following funds have two entries in money control one with growth option ( rating available existing plan) and one is with direct growth option ( rating not available started in 2013). What is the difference with growth and direct growth?

    I am planning to invest the following funds which do not have ranking in money control. Could you please review and let me know if I choose the right ones or not and if not can you suggest some funds in which I can invest now.

    1. Axis long term equity fund – direct plan(G) – without rank money control

    2. Religare Invesco Tax Plan – direct plan(G)

    3. Birla Sun Life Tax Relief 96 – direct plan(G)

    4. IDBI Equity Advantage Fund – direct plan(G)

    Waiting for your reply urgently as well as if you can suggest some more.

    Thanks
    Kalyanasish

  • Hi Srikanth,

    Is it good to have seperate insurance and investment schemes or to invest in a combined one. Also, what combination of investment is advisable in PPF and ELSS (in %), considering I am not making any other Equity investments and which ELSS is the best for a long term perspective.

    Thanks.

    • Dear Madhuri,
      Kindly do not mix insurance with investments.
      For insurance , buy a term insurance plan.
      Investments – Create your own investment plan by choosing various investment avenues based on your Financial Goal(s) & time-horizon.
      Kindly share details of your Financial goal(s).

  • Hi Shree,

    I am 32yrs, married with a 1 year old child and working in a pvt IT firm(7yrs exp). Monthly expenditure of around 50K considering EMIs of 24K p.m. Earn 70K after tax.My parents are not dependent on me. Can you suggest if the below investments and risk coverage looks ok or need adjustments?

    1. Retirement plan by 60 yrs- Started SIP of 4k in Axis LT equity Tax saving and 3K in Reliance tax saving for past one year now.
    2. Child education – SIP of 2K in Icici exports and other services and 2K in Franklin build india
    3. Term insurance – 50 lakhs.
    4. Health Insurance for family – 5 lakhs. Company provides another 3 lakhs
    5. PF – Amount accumulated is around 3.5 lakhs
    6. Unable to accumulate any fund for emergency till now.

    Does my SIPs look OK?
    I will be able to reduce my EMIs by 10K after March 2016. I have a plan to buy a house (35lakh budget) by 2016/17. Shall i withdraw amount from PF for down payment or what should be my plan to buy a house?

    I do not have any other cash savings.

    -Jose

    • Dear Jose,
      EMIs of 24k, are they for home loan? Or do you have any other loan(s)?
      So, is Rs 20k your net monthly savings?
      2 – Both the funds are thematic or sector oriented funds. You may reconsider these.
      6 – Having an emergency fund is a must. Try to note all your monthly expenses and check if you can reduce or stop unwanted expenses. If so, invest those savings in a monthly RD and try to build your emergency fund.
      If you have a tight situation to save for emergency fund itself then it how are you going to fund the down payment or future EMIs? Kindly reconsider your decision.
      Suggest you not to withdraw PF monies.

  • Hello,
    I would like to invest approx 60-90 per annum on ELSS . For how long should i invest for good return ?
    Regards,
    Atul

      • Hello ,
        Thank you for your reply . But why it is said that long time investment is good because as we know that returns are not guaranteed , so as by naive logic, i should invest for say 2-3 years and get some return as quickly as possible and avoid risk of losses .
        is there is any possibility of getting zero money back after investment ?

        • Dear Atul,
          How can you be so confident that you get good returns in next 2-3 years? What if market falls drastically over next 2 years?
          Yes, there is possibility of getting negative returns.
          If you make long-term investments then the probability of getting negative returns can come down.

  • Respected Shreekanthji=My two sons presently studying in class 5.I am worried about thier education after tenth board.Today i can save money Rs10000 per month. Could you help me how to invest this amount ??? I also come under tax payer. Please reply on my email if possible.

    • Dear Anupama,
      I am doing good thank you, how about you?
      There is no compulsion as such..May I know why is this question been asked? Did anyone (banker or your relationship manager) say so?

  • Hi Sreekanth,
    I have invested in Axis long term fund.
    I have also invested in Term plan.
    My question is ,
    What is the tax proof document one need to submit ? is it just the 1st page of account statement?

    thanks in advance

    regards
    Mahesh prasad

  • I am a pensioner under tax bracket. Bank’s fixed deposits lock in period is 5 years and the return is low. Can you please suggest any other investment plan?

    • Dear Mr Murty,
      Is your investment objective both tax saving & accumulation (or) is it safety of capital + tax saving? Let me know the investment time-frame too??

  • Hi..I have invested 2500 in DSPBR microcap and 2500 in ICICI focused blue chip.Both SIP. I further want to invest 5000/month in ELSS as SIP. I will need the money after 3 years. My risk profile is moderate-high. Please suggest me good ELSS MFs

  • Hi Mr Reddy,

    I am currently investing Rs 1000 SIP at ICICI Large Cap Fund-Growth and Rs 12500 in a RD with SBI.

    I want up my tempo on investments. I am getting my RD matured of Rs 330000. How should I invest this money? Additionally I wish to invest Rs 15000 per month now on. What should be my idle break-up between MF/RD. I have low risk appetite for lumpsum and high risk appetit for SIP. My investment horizon is at least 5 years for both.

  • I want to invest Rs.3000 and Rs. 2000 in Axis long term equity fund and reliance tax saver. I already ahve two SIP in birla SUNLIFE FRONTLINE EQUITY FUND AND OTHER IS RELIANCE EQUITY OPPORTUNITIES FUND.

    NOW I WANT TO INVEST UP TO rS.3000/- IN TAX SAVING FUND AND rS.2000/- IN NORMAL FUND.
    I ALREADY HAVE TERM PLAN AND HEALTH INSURANCE AND HAVE LIC AND FD ALSO.

    PLEASE SUGGEST

    PLEASE SUGGEST

  • Hi srikanth,I am 33 years old IT profiisonla,bought house in 2008 for 8 laksh and now planning sold @60laksh..I will receive 60 laksh by cash not cheque..will Invest whole 60L lumpsum into ELSS fund to get EEE benefits or are there any tax applicable to deposit amount in bank.

  • Thanks a lot Mr. Reddy,

    Your suggestions means a lot for me. I will continue My present SIP in SBI only and rest as you suggested. Till date i am not having SUFFICIENT life insurance cove except few LIC policy of Rs.300000. which i fill is just helping me to save my tax. can you please suggest me a good term insurance of (Rs.5000000 lakh) which are having good payment track record along with a health insurance plan for 4 members me spouse and two children for around Rs.300000 to 500000 lakh cover).

    Which is the best pension plan (Fund) to invest in NPS tier II among mentioned below:
    1) HDFC pension Management company
    2) ICICI Prudential Pension Funds management company Ltd.
    3) Kotak Mahendra Pension Fund Limited.
    4) LIC pension Fund Ltd.
    5) Reliance capital pension fund ltd.
    6) SBI pension funds private ltd.
    7) UTI retirement solutions ltd.
    (As an govt employees we having only these above mentioned options to invest our NPS tier II money).

    Looking forward for your kind and valuable suggestions to direct my investment.

    Thanks

    With Regards,

    Vikash Kumar Singh

  • Dear Sreekanth,

    Great article!

    I need investment guidance for my mother who is retired now. Need to invest around 2 lakhs, can spare 1.5 for ELSS lumpsum and the rest for a fixed deposit or something? Pls share your advice on ELSS and duration. Motive is wealth creation and not so much on tax relief.

    -J

    • Dear,
      If your investment objective is wealth creation alone, you may consider allocating Rs 1.5 Lakh between 2 to 3 funds.
      Diversified equity : Franklin primaplus
      Balanced fund : HDFC Balanced fund / TATA Balanced fund.
      Try to remain invested for atleast 5 years or so.
      Kindly read : Best Equity funds.

  • Hi I want to invest in Axis Long Term Equity Fund – Growth as SIP as well as Lumpsum for tax saving perpose. Could you please let me know weather I will get tax benefit in 80C for SIP only or “Axis Long Term Equity Fund – Growth(Lumpsum)” will also be considered. Will it make any difference if I will purchase MF through HDFC Securities or any other mode??

    Please advise.

    • Dear Ravi,
      Whether you invest through SIPs or lump sum mode, you can claim tax deductions under Section 80c. If you invest through an agent or distributor you may have to invest in Regular plan of a scheme. However you also have an option to invest in DIRECT Plans, wherein you may get slightly better returns compared to Regular plan of the same scheme.
      Kindly read : ‘What are Direct Mutual Funds & their benefits?‘

  • Dear Mr. Reddy,

    I have invested in SBI emerging Fund growth (SIP) of Rs.2000 per month which is going to mature in Jan2016. I would like to reinvest that matured amount to get good returns. It may through be in ELSS, SIP, or one time diversified Lump sum investment. Kindly suggest me the ways and funds to my money. I also wants to start two more SIP’s of Rs.2500 per month from march 2015.

    with regards,
    Vikash Kumar singh

      • Dear Vikash,
        SBI emerging fund is a mid-cap oriented fund, which has been performing well over the last few years. Did the fund’s performance meet your expectations?
        How long have you been with this fund?
        Two new SIPs : Let me know your investment time-frame?

        • Thanks you very for your kind Reply Mr. Reddy

          My SBI emerging fund is performing satisfactory. I had started investing in this SIP fund from Jan 2011 for 5 years which is going to mature in Jan 2016. Till Aug 2015 after paying 56 installments out of 61 its fund value was reflecting around Rs.185248.
          Out of my two new SIP’s which i am planning to start, I have planned one for short period say 5 years and other is for l0ng period for around 10 – 15 years for my daughter’s education. along with this i want to invest my SBI’s (SIP) matured money which i will get in feb 2016.
          looking for your valuable suggestion and guidance.
          Thanks

          With regards,
          Vikash kumar singh

          • Dear Vikash,
            Continue with SBI fund & also consider a new SIP in diversified equity fund like Franklin Prima plus or ICICI Dynamic fund for 10-15 year goal.
            For 5 year goal – Consider a SIP in a balanced fund like TATA balanced fund.
            Do you have sufficient life insurance cover?

  • hi,

    i am looking for some good Mutual fund investment, can you help me, is HDFC term plan good to invest.

    regards
    snehal

  • Hello Sir
    I want a amount of 3,00,000 after 2 years.
    What is the minimum amount i should SIP in which fund ?
    Please suggest.

    Thanks
    Biswa

    • Dear Biswa,
      If we assume rate of returns @ 10%, you have to invest Rs 11,350 pm in SIPs to accumulate Rs 3 Lacs in 2 years from now.
      10% may or may not be achieved and you have to take a very high risk, suggest you to invest for atleast 3 years (if possible) in one balanced fund and in one MF monthly income plan.
      Kindly read my articles:
      Top Balanced funds
      Top MIP funds.

  • Sir my age 36 no burden (not having family)
    I will investment of Rs 1 20 000/- single payment in axis long term equity fund for tax saving purpose it is correct or not can suggest.
    I have no other savings in any manner (only Bajaj triple coverage + IDBI term plan coverage insurance 42 00 000 /-)
    So my future plan every year i will invest this fund fixed amount 1 20 000/-
    Could you give suggestion to investment purpose?

  • Dear srekanth
    I am a beginner for mutual fund. Can I invest rs 2000 every month in sip for 30 years. If so what are the funds can be chosen. Thanks for or suggestion in advance

  • I hv currently 4 sips of installment 2000 each.two of them are icici prudential long term tax saver fund n reliance tax saver fund both in growth option.other two sips are kotak 50 regular plann hdfc prudence fund both with growh option.i have also recently invested 25000 in reliance tax saver.tell me about my profile
    I want to purchase one more tax saver sip with 3000 monthly installment.ur suggestions for it?

  • Dear Sreekanth,

    Why would you suggest Fraklin tax shield when Axis Long Term Equity Fund – Regular Growth has higher returns and ranked 1 by CRISIL .

    Thanks in advance for your reply

    Ratha

    • Dear Ratha,
      Infact both are good funds.
      Franklin has a longer track record than Axis fund and has been a consistent performer. You may invest in Axis fund if you are convinced with its past performance.

  • I would request you to suggest me elss schemes offering highest dividend yield consistently over the years.

  • Hi ,

    I will be receiving 10 k in gift from my mom . How shuld i invest this amount to get maximum benefits in long run .
    Currently my age is 31.

  • Hi ,

    Thanks for your good article..I planning to invest on the axis long term equity fund..What is your views

  • Hi Sir,

    Thanks for this nice and very advisable article.
    I am planning to invest for 1.5 lakh to safe income tax under 80C. Could you please advice me in which area I have to invest. Some of the goal will be short term(max 6 years) and rest will be for long term.

    Thanks
    Vikash

    • Dear Vikash,
      You may consider Franklin Taxshield fund.
      If you surely need a part of money and you know the goal amount, consider investing in Bank FD (5 year tax saving fd).But, personally I would prefer investing in atleast in a balanced fund (not a tax saving one) and take the risk for next 4 years or so.

  • sir of which out of two plan UTI MNC & Relience growth fund which is better for 15-20 year sip.
    thanks.

    • Dear Pal,
      Both are ‘Diversified Equity funds’. You may consider UTI MNC fund.
      If your time horizon is around 20 years, it is advisable to consider investing in one mid/small cap oriented fund too. (Ex : HDFC Mid-cap opportunities fund / Franklin Smaller cos fund).
      Kindly read my article : Top Equity funds.

  • sir i start investing in following mf relently.
    axis (elss)- 2500
    relience (elss) – 2500
    uti mid cap – 1000
    frankline small companies fund-1000
    hdfc mid cap – 1000
    relience pharma -1000
    sbi pharma -1000
    all the funds are direct and growth option and via sip mode and investment for more than 15 years time horizon.
    is it my right plan. plz sugest. thanks.

  • Hi,

    I’ve recently started investing in below ELSS mutual funds with Rs. 1000 as SIP

    ICICI Prudential Tax Plan – Regular Plan – Growth
    Franklin India Tax Shield (G)
    Birla Sun Life Tax Relief 96 (G)
    HDFC TaxSaver-Growth Plan.

    After gone through your article , I felt I’ve done a mistake in investing in multiple funds.So, I’m planning to stop investing in HDFC as HDFC fund is not perforimh well when compared to other funds.

    I’m also planning for 1 time investment of Rs 50 K , will you suggest me to invest that in above 3 funds or will suggest me for any new find(I’m thinking about Axis Long Term Equity Fund – Direct Plan (G)).

    Please advise.

  • Dear Sir,

    Thanks for your valuable article. I got lots of basic idea through this. I would like to hear from you regarding my situation.

    My age is 28. I will get married in next year. I am salaried person & existing salary is 52000. I want to invest 3000/- per month through SIP. I also want to save tax. Out of 1,50,000 tax exemption limit, I have invested 50,000 in PPF & other 50,000 are through EPF & insurance term plan. Still i have to invest 50,000 in a year to utilize 1,50,000 tax exemption benefit.

    • Dear bhushan,
      When do you require this money? If your investment horizon is atleast 5 years or more, consider investing in one ELSS fund.
      My picks : Franklin taxshield / Axis long-term equity / ICICI tax plan.

      • Thanks for your reply sir.

        i would like to mention that Currently i am not seeing any requirement before 5 years for my tax saver component i.e 50000.

        Should i invest this much amount at one time in ELSS scheme or opt for SIP? I noticed your statement that you personally prefer to invest quarterly or when market is down. But for person like us it is not possible to judge when market is Up or when down.

        I also want to invest 3000 in SIP in normal funds.
        After reading your article & further study i feel like i should go for 1000 each in one Balanced, one Diversified & one Best Small & Mid cap sector.
        Suggest me is it okay for 1000 in each Frankline India Prima Plus, UTI midcap, HDFC Balance?

        what does this means ‘Growth’ & ‘Dividend’ ? i am finding all schemes have two options growth & Dividend.

        Thanks again for your valuable feedback.

        • Dear Bhushan,
          You can go ahead and invest Rs 50k in two installments (2 months) in Axis long term equity fund or Franklin Taxshield.
          Shortlisted funds are good ones. Remain invested for atleast 5 years.

          Dividends are declared only when the scheme makes a profit and it is at the discretion of the fund manager. The dividend is paid from the NAV of the unit. Mutual fund houses offer two kinds of schemes: Growth and dividend. In the growth option, profits made by the scheme are invested back into it.

          For long-term wealth accumulation, Growth option is the best one.

  • how to invest in axis long term equity fund?? should I invest through the home bank or go direct??

    • Dear somenath ..that depends on how comfortable are you to go DIRECT? Do note that Direct plans can give slightly better higher returns compared to the Regular ones.

  • Dear Sir,

    I am Kiran age 34. I want to invest in ELSS HDFC tax saver growth. monthly SIP 2000 for 16 year. how much returns can I get after 16 years.. is this hdfc tax saver growth better one or should I look for some other..please give advice..

  • Dear Sir
    pl. suggest best a) Mutual fund with or without SIP+TAX BENEFIT+ CRITICAL HEALTH INSURANCE Plan.
    b) best ELSS m.f for tax benefit
    my age 27 years
    money not required for another 5 years
    high risk
    excellent returns

  • Dear Sreekanth,
    I find Tax benefits very confusing. If you invest in a normal fund today and withdraw after 10 years, there is no LTCG. How is it different from EEE benefit for ELSS funds ?

  • sir i recently start three mf by sip mode for long term more than ten year .
    1. axis elss 2500/ per month.
    2. relience elss 2500/ per month.
    3. uti midcap 2500 / per month.
    r they good for long term more than ten year. &
    also sugest me a goo mfund for lumsum investment .
    thanks sir.

  • Hi Sreekanth ,

    I am new to start SIP Plan for 3 years , some people suggest ELSS, funds,some persons says Short term equity funds ,Can you pls suggest which fund is best performing for next 3 years, best return compare to Fixed deposits.

    I plan to invest monthly 2500 for next 3 years

    Regards,

    Sampath Kumar.

  • The former part of the article envisages not to go for dividend option. but why? the growth option exhibits the boasted performance just because the return/yield is reinvested in the original fund, which normally do not exhibit the real performance of the fund. To view the return without camouflage, one should go for dividend option.

    • Dear Stanley,
      If you opt for dividend option, What would be your plan of action with the dividends received? Where will you invest? Or will you use the amounts for consumption?

  • Hi Sreekanth.

    Its a good article about investing in mutual funds, Appreciate for that.
    I have 2 lacs rupees now, I would like to invest whole-sum in ELSS for 3 years long term plan for tax exemption and good returns, But still i am not able to choose the best and i have already a bank account in HDFC, If would opt HDFC tax free fund. what are the risks do i need to face.
    what is difference between growth and dividend reinvestment?
    Kindly provide your suggestions.

    Thanks in advance.

      • Thank you so much for the prompt response Sreekanth,

        Yeah i could hold this money for 5 years not more than that.
        Adding to that i could save money from 15000 to 20000 INR every month. but don’t have much idea how to invest this money.

        Please suggest me sreekanth what are the possible ways that i could invest this money.

  • Hi Sreekanth,

    Im preferring SIP of 3k per month in the top 3 ELSS tax saving funds that you listed above through my online account with Sharekhan. If i invest through my broker, hope i will still be eligible for tax deduction under 80C?

  • Hi Sreedar, your blog is pretty good for new users like me to understand,
    my question is i would like to invest in MF around 3k per month say for period of 5 years,
    please tell me which one to adopt .

  • Hi,

    I am planning to invest on reliance Tax saving fund SIP. And I already invested in the Reliance vision Fund directly. Whether I can apply directly to Reliance MF or I can apply from other site like sharekhan etc… Any benefits there applying directly or by third party. Please let me know.

    • Dear Karthik..If you are comfortable investing directly, suggest you to invest in Direct plan through respective mutual fund house website. You can get slightly better returns when compared to a Regular MF scheme.

  • Dear Sir,

    I want to start Sip For Rs 2000
    I have planned to invest Rs 500 in Axis Longterm Equity Fund , 1000 in Birla sunlife MNC fund , 500 in HDFC Top 200.

    Kindly guide is it a good portfolio

  • Hi Sreekanth,

    I am new to MF. My goal is to acquire a lump-sum(30-40lacs) in a time horizon of 10-15 years.I have began with a SIP of Rs. 1500/- in HDFC Midcap Opportunities Direct Plan (Growth option). I plan to invest another Rs. 1500/- from the coming month. I am confused whether I should play safe or take risk with this other 50% of my investment. I have thought of some combinations :-

    Option 1(Risk Prone): Rs. 500 each in – a) Axis Long Term Equity Plan(ELSS) , b) Franklin India Smaller Companies Fund(checked portfolio overlap and it is not overlapping with HDFC Midcap) , c) HDFC Balanced Plan

    Option 2(Safe) : Rs. 1000 in HDFC Balanced and Rs. 500 in UTI Equity Fund(Large Cap) OR total Rs. 1500 in HDFC Balanced

    Option 3(Middle Road) : Rs. 1000 in HDFC Balanced and Rs. 500 in Axis Long Term Equity

    Also Tax saving is not my priority. I only selected Axis Long Term Equity looking at its excellent last 5yrs performance. Would it be wise to go for ELSS and face the lock-in or invest the same in another Midcap fund say Franklin Smaller Companies which is giving comparable return. Please advice.

    Finally, I would love to read a detailed article by you on Mutual Fund switch. how to time a switch? what should be the trigger and how to go about it over a long time horizon.

    Regards,
    Indranil.

      • By ‘Switch’ I mean switching from one MF to another. Also I would like to know about Systematic Transfer Plan…what is it all about?…is it necessary/beneficial?

        • Dear Indranil,
          I will soon try to publish an article on ‘Switch’ option, thank you for the suggestion.
          STP : For example you have lump sum of say Rs 5 Lakh which needs to be invested then you can invest in a Debt fund of a fund house and then book a STP, to transfer pre-set amount to another fund for long-term. Kindly note that these two funds should be from the same fundhouse.

  • Hi

    Appreciate ur effort.
    Im having a savings of Rs 10,00,000/- as of now invested in FD. Please advise on how to invest the said amount in Mutual Funds for a period of 10 years. I may be requiring it only after 10 to 15 years.

  • Hi Sreekanth,

    I am looking for investing in Axis Bank ELSS plan (3yrs), considering its past performance. My question is which mode of investment is better – SIP (monthly fixed amount) or Lump sum amount. From the post (pic) above returns for SIP was more for 3yrs lock period. Could you please help me understand this better?

    Thanks,

    Shalini

    • Dear Shalini,
      You can consider investing every quarter a lump sum amount. Do not give too much importance about few basis points (percentage points) regarding SIP Vs lump sum.Select the method which is convenient to you.

      • Hi Sreedhar,

        Thanks for the reply. I am ok with both the methods (Lump sum & SIP). As you know it is all for higher returns :), which method you suggest? Also the calculation n further investment (way in which MF will invest this money in shares) varies for both the methods rt? Plz advice.

        Thanks & Regards,

        Shalini

      • Hi Sreedhar,

        Thanks for your reply. I am ok with both the methods (Lump sum & SIP). As you know it is all for higher returns. Which one is better for higher returns? Also the method of interest calculation and Lock-in period varies for both? The way further investment (investments MF’s would do with this money will also vary for both methods). Please advice.

        Thanks & Regards,

        Shalini

        • Dear Shalini..Since each unit under ELSS fund has a 3 year lock-in period, to avoid confusion at the time of redemption, I personally invest in ELSS fund(s) lump sum amount (not fixed) quarterly or whenever market falls (for example, like yesterday’s event).

  • Dear Sir,
    Recently I have started my SIP in ICICI pru tax plan regular growth with Rs. one employee. I am salaried employee. I have invested some amt in Bank Recurring a/c & I have received Rs. 10 K from it. Is it ok to invest this amt in same mutual fund or should I go for Tax saving bank FD. Plz guide

  • Hello Sir,

    I am 29 years old. Just started 1k sip in axis long time equity fund direct growth. My questions

    1. Starting 4 MF in different banks 1k each is safe? or any two and monthly 2k is safe ? As well which one will give good return.

    2. If diff bank is safe then, can I go for Franklin and icici or hdfc . I need tax benefit too.

    3. Is there any minimum return policy or completely based on the market ?

    As I am new please clarify th above doubts, thanks in advance

    • Dear Sudhakar,
      What do you mean by ‘starting MF in different banks’? Are you investing through your bankers ? Or by visiting the respective fund house websites in Direct plans?
      Equity oriented funds like ‘Axis long term equity’ do not guarantee you any minimum returns. You have to remain invested in such funds for long term like say more than 5 years or so.

  • Hi,
    I just wanted to know that i have invested in the year 2010 in few MF upto 1 year.I would get any return if i want to redeem it.
    Best regards
    Prabhas

  • Hi sir
    I have plan to invest in Axis Long Term Equity Fund(1000/month).but I don’t know whom I have to approach.pls tell me the process .
    Thank you

  • Thanks for this piece. I am planning to invest Rs 50k this year in ELSS. Should I go for lumpsup or SIP. I am planning to choose between Franklin, Reliance, HDFC and IDFC. What do you think. And importantly should I go for growth or dividend or dividend reinvest?

  • Dear mahesh,
    I am having 5 lacs which I want to invest. I want some flexibility that in case of emergency I am able to withdraw at least 1 lac from it anytime. Otherwise i would like to remain invested for 5-6 years.
    As of now I am thinking of putting this money in sbi in MODS which will give 7 pc interest yearly, and I will be able to withdraw money anytime. Pl suggest other options.

  • Hello Sreekanth,
    Thanks for providing us so much of information. My questions are
    1. I have to save the tax around 70k per year(under 80C, apart from PF deductions), so, can i choose three different funds Axis long term, ICICI and Reliance under ELSS (2000/month each)
    2. I don’t have any other savings, so, i want to use above fund amount for my future savings . suggest me how to go further after 3-5 years of these funds (what can i choose growth or dividend)
    3. any other options apart from MF

    Thank you once again,
    Mahesh

  • Hello Sir,

    I am exploring to invest in Mutual Funds for tax savings and investment:
    1. For Tax savings – lock-in period of 3 years – please suggest which one is a better option: Franklin India Tax Shield or Axis Long Team Equity Fund
    2. A dumb question: instead of opening an RD for 500 INR per month, is there any mutual fund to start investing for a period of 3 to 5 years? Please recommend

    Thank you for your help in advance,
    NK

    • Dear NK,
      1 – Though lock-in period is for 3 years, remain invested in the fund for atleast 5 to 7 years. Both are good ones. You may opt for any one of them.
      2 – Consider a balanced fund for 5 years . Ex – HDFC balanced fund. (It is not a dumb question)

  • Hello, I am 22 years old I just got a job last year after finishing my graduation. I have been reading about investments for quite a few months. I have seen my grandparents save a lot through those FD’s and post office schemes, but I wanted to seek out something else,and being at this age I thought I can take risks, so I read about mutual funds and just last month I started a mutual fund account with Hdfc. I have started with a SIP plan, 1000/month in AXIS long term equity fund growth, 1000/month in ICICI value discovery fund regular growth plan and 500/month in RELIANCE tax Saver fund-growth. Please tell me how is this for a beginner portfolio.
    Your articles are very well written and informative ,thank you for the knowledge. any layman can also understand your posts that’s a very good thing, please reply on my query.

      • Thank You,for your reply.
        Can u pls suggest me some equity diversified funds?
        And i forgot to mention i do have an RD of 2000/month with HDFC bank @8.25%.(5 years)
        What should i do about it now?

        • Dear Varun,
          Equity diversified funds – Franklin Prima plus, ICICI Dynamic fund or Franklin India High Growth Companies Fund.
          Long-term RDs are not advisable. You may break it and invest in mutual funds.
          Do you maintain an ’emergency fund’ to meet any unforeseen expenses?

          • Thank you for the suggestions. So,now i will see to breaking the RD.
            I am looking up these equity diversified funds.Thank you so much.

            How much emergency fund should i keep? I earn around 20-23k a month, Monthly spending is in 15k range.

                • Hello sreekanth,just one more question.
                  I have 50,000 rs from past savings by parents.
                  Should i put that in NSC(national savings certificate), FD or as a lump-sum in mutual fund? and which type of fund for this amount?
                  I am looking for long term investment.

  • sir i am 25 year old small town guy. i am a govt. employees. my in hand salary is 28k. my questions are..
    1) where i should go for ELSS? i mean, in bank or post office or private bank like icici etc.
    2) what is the charges ?
    3) which is best between lump sum and sip?
    4)For save tax every year it is compulsry for me to invest arond 50k rs.is ppf is the another best option for me?

    • Dear Mahesh,
      1 – You can visit fund house websites directly (ex – http://www.hdfcfund.com/ ). OR you can invest through online platforms like (icicidirect.com or fundsindia.com). You can also invest offline through distributors like CAMS or Karvy.
      2 – Try investing directly by visiting fund house websites (no charges).
      3 & 4 – What are your financial goal(s)

      • sir there are no spcl goals now. my aim is to save tax and maximum wealth creation.ready to take risk,plz suggest best mf for me. thnx..

        • Dear Mahesh,
          If you can invest for >10 years then consider a good mic cap fund & one Equity dviersified fund. (Ex – HDFC Mid-cap opportunities fund / Franklin Small co’s fund & Franklin Prima plus etc.,)

  • Sir,

    I just 28.I want to invest monthly for my girl child just turn 1 year??I am confused about opting sukanya or sip.kindly advise….my goal is for money after 20 years…

  • Hi i am a Software Engineer 23 years of age and my in hand salary is 29000.
    Presently i have a recurring deposit of 5000 per month of 2 year maturity in which 1 year has been completed.
    Now i am looking forward to do some investment in ELSS Mutual funds approx 2000 per month.
    I am having 4 preferences out of which i want to invest in 2 MF ,1000 each:-

    1.) Axis Long Term Equity Fund
    2.) Reliance Tax Saver(ELSS)
    3.) Franklin India Tax Shield Fund
    4.) ICICI Prudential Tax Plan-Regular Plan

    Basic objective for Investment is tax savings and some growth of money too.

    Risk is not a big factor.

    Please suggest which MF to invest in from above choices or any other investment plan which you want to suggest.

  • I m New to mf but going thr the advice by my friends I have made up my mind to invest some amt in it say about 50k per annum.
    PL suggest which fund is best at my age (55 years) under both Tax saving or non tax saving category

  • Hi,
    I want to invest lumsum amount in MF for long term i.e 7-10 years and my objective is not for tax saving.so kindly suggest me ELSS is good option for me or not.If not then where we invest lumsum amount thats means in which fund house or scheme.pls help me

  • Hello sir, I am 34 yrs old and working as lecturer. I am planning to invest in ELSS SIP (monthly 500 or 1000), I am expecting good returns in future along with tax saving benefits, which mutual fund should i opt…….kindly suggest

  • dear sir

    I am 36 years old , I want to invest 2k to 3k monthly for tax savings purpose.
    I want to invest in mutual fund.
    I want to get more returns.
    so Pl.suggest me which MF best for me.

  • Hi Sir,
    I want to invest 25k yearly in ELSS for 3 years ..any suggestion which is best one to invest and is this right time to invest

    • Dear Ruby,
      Though ELSS have lockin period of 3 years, it is advisable to remain invested for long term to get decent returns.
      Any time is good time to invest in equity funds for long term.

  • sir i wants to invest about 8 k per month for more than twenty year in mf , of 8 k how much shud i invest in elss nd how much in gnl equity , plz also sugest good fund for long term.

  • Good aftrnn sir,u suggest me to invest hdfc balanced fund.. and franklin divesified fund. Just now i read about ELSS in ur blog ,if i want to invest in ELSS every month 1000 rs. Which ELSS u suggest me to choose.. And plzz tell me that where i get more returns either in hdfc balanced fund.franklin diversified fund or ELSS which is the best to get more retuns.

  • Sir. I’m 28old. I’m new to mutual funds. I can invest 2k for month. 5 years I can. I want to get tax benifit. Which fund I can choose?

  • Hello sir,
    Thank you for your informative articles

    I AM NRI AND BEGINNER TO INVEST IN MUTUAL FUND,
    SO PLS GIVE ME RIGHT SUGGESTION ABOUT MY INVESTMENT
    MY AGE IS 41 YEARS AND I HAVE TO INVEST IN MUTUAL FUND
    FOR 3TO 4 YEAR TIME HORIZON FOR GETTING BEST RETURN.
    ADVICE ME ,HOW CAN ,I INVEST ,THROUGH THE BANK, OR DIRECT ….
    WHAT IS MINIMUM LUMP SUM AMOUNT

    THANKING YOU
    JP

  • Hi,

    I am 43 years old. Would like to invest Rs.40 – 50K as lumpsum investment in ELSS this October-November. Can you please suggest me whether I should split the amount and invest in ICICI tax fund and Reliance or should I invest it only in one fund? Want to make this investment for long term growth plan. Would like to know whether I have to make this lumpsum investment every year if I go for a 10 year investment.

    Please advise.

      • Hi Sir,

        I want to spent around 5k/month.Which ELSS plan should I go with.Want to spend for 5yrs locking period.
        Moreover,what is the process and how to do that investment online.

        • Dear Shaheeryr,
          Kindly note that it is not ‘spending’ but it is an ‘investment’.
          You can consider Franklin Taxshield or ICICI Tax plan. You may visit the fund house websites and invest directly or you can open a free account with fundsindia.com (or) any online distributor like icicdirect.com etc.,
          Revert to me if you need any guidance.

  • Hi Sir,

    I am Dinesh kumar and I am software Developer , and I am 24 only and My Take Home salary 56000, I need your suggestion to plan and implement my Financial goals .

    1) with in 6 to 7 Year need to build new House (35 Laks)
    2) after 7 Years need to give monthly 10000 to 15000 amount for my parents( like pension )
    3) need to save tax as per the govt rules.
    4) need to build good financial status.

    as of now I can invest up to 40K and next year going to marry so next year onwards 35K I can invest. as of now I don’t have any insurance or not invested single rupee also.

    please give me a suggestion or investment plans to achieve my goals and to build good financial life.

    Thank you

    • Dear Dinesh,
      1 – Is this through home loan?
      2 – Suggest you to create a separate MF portfolio and start accumulating monies. This you can do for next 6 years or so and then switch the fund to a bit safer investment avenue from which your parents can withdraw monies. They may also invest the accumulated fund in slightly riskier options to get decent periodic returns.
      3 – Ok. Invest in ELSS funds.
      Do you have health insurance? What about your parents?

      • Not yet taken any health and term insurance for me and my parents. I will take .suggest any plan.

        I want to build home ( at least 5 flors) .for that I need 2000 sqft (10 Laks)land .ground floor for my parents reaming they will give to rent and rent amount will pay to EMI . so now if I want to go for home loan I need a land , we don’t have land .
        1) please suggest me if any alternatives their ?.
        2)how much money need to invest in MF for second Goal ?
        3)how much money need to invest ELSS funds ?
        4) my dad is Govt Employee . he will retired in next 7 years. we have own house .on retirement he will get at least 7 laks . currently 10000 savings possible . is this amount will help to purchase land in with in two years?

  • Hi Sreekanth,

    I am 28 years old, not married will marry in 1 0r 2 years. I have dependent parents.I want to start financial planning from now. I want to save 10 k per month 6 in MF and 4 in PPF. I have started SIP of 1000 in Axis LT Equity ELSS fund from this month. I want to save some more tax so suggest 1 ELSS and 4k for other Mutual funds. Please suggest best mutual funds and also term insurance as i dnt have one.

  • Hi Srikanth,

    Greetings !

    Just visited your website and loved it.
    I’m a 35 years old, private clinician. Have two sons 4 & 2 years respectively. Wife runs Coaching Institute.

    Kindly have an insight on my financial planning.

    1. PPF – 75K + 75K (Wife)
    2. HDFC Term Insurance Plan- 50L + 50L (Accidental Death)
    3. United India Health Insurance – 5 L (Including Family)
    4. LIC Jeevan Anand – 50K+25K (Wife)
    5. Reliance ELSS- 2K (Started this year)
    6. Home loan – 25K/pm
    7. NSC – 10K + 10K (Every year on kids birthday)

    Please let me know about my portfolio. Wealth Creation is my motive on a long term basis.
    Looking for investing in ELSS fund for my wife (2K)

    Thanks & Regards,
    Dr Saurabh

    • Dear Saurabh,
      Glad to know that you liked relakhs.com
      2 – Does your wife has term insurance cover?
      3 – Enhance your medical insurance sum assured by buying a Super Top up plan. Kindly read my article : Best Super Top Up medical insurance plans.
      4 – Kindly read my articles – How to get rid off bad insurance? & Endowment Vs Term plan.

      Also, go through the below articles and revert to me 🙂
      Retirement planning made easy
      Kid’s education planning
      Financial planning pyramid

      • Dear Sreekanth,

        Thanks for providing me an insight on financial planning. I would have been to your blog/site before. I’ve also subscribed to your excellent website.

        Few doubt’s again coming into my mind.

        1. I wish to drop the LIC plan and switch to ELSS MF for the same amount, to avail the tax benefit. Now if I drop this LIC plan, which I’ve been continuing since last 6-7 years, then what would be the repercussions, in terms of maturity dispersement?

        2. I would also like to drop investing in NSC (20K/Yr), instead invest again in some Aggressive Large cap Equity MF. Suggestions?

        3. Is is ideal to reduce PPF lump sum investment and to increase the ELSS investment, to meet the tax benefits and a better corpus in coming years?

        4. Yes I am going to buy a Term insurance for my wife and also to increase my Health insurance.

        5. Please suggest me the best options for Wealth creation on a long term basis (20 years) and also the best tools to utilize 3L (1.5L Each for me & my wife) Tax benefits investments.

        Well I don’t think so that I would retire at some age, being a Doctor; but keeping inflation in mind, how much do I need to save each year/ month, including my 3 L Tax saving investment to have a corpus of 5 Cr, 30 years down the line (Present age is 35yrs).

        And what would be the actual value of 5Cr (to be cumulated after 30 years), in today’s scenario?

        Thanks,
        Dr Saurabh.

  • Hi Sreekant,

    I’am 32 yrs old and got married a yr ago and we have small kid also..

    So I’am thinking to invest in ELSS through SIP so suggest some few good tax saver MF’s.
    Time Period : 5 yrs to 10 yrs
    Amount Invest PM :- 3000 INR
    And if i will invest this amount with described period so what i will be get that & please suggest the steps and plans to chose

    • Dear Shailender,
      Do you have sufficient life insurance cover?
      Consider ICICI’s/Franklin’s/Axis’s ELSS funds.
      You can invest online directly by visiting respective fund house websites or you can invest through online brokerage platforms like icicidirect or fundsindia or hdfcsecurities etc..

  • Hi Sreekant,
    I wish to go for ELSS SIP MF’s
    As I understand that gives tax benifts

    I can afford 4k everymonth.
    Could you please suggest which MF should I consider.
    I don’t mind the locking period of 3 years

    I am looking for good returns as well tax exemption.
    Pls do let me know
    Thank you!

    • Dear Manisha,
      Thought the lock-in period is 3 years, to get decent returns you may have to remain invested for atleast 5 years in ELSS funds.
      Consider Franklin / ICICI / Axis ELSS funds as listed in the article.

  • Hi Sreekanth

    Please suggest me some good SIP and funds with 3 yr lock in period. My main goal is to invest for short term 3 yrs max. I can invest in SIP upto 10k p/m and 50k per annum for mutual funds for 3 yrs.

  • Hi sreekanth,
    I want to open a dmat account and want to start investing in shares(intention to hold for longterm). Please suggest a depository where I can open and invest which gives good service at a minimum cost.

    Thanks in advance…

  • 10 Years Goals- required 35-40 Lacs in 10 Years for a lump sump amount for initial payment for building house

    20 Years Goals- required 15-20 Lacs in 20 Years for a lump sump amount for children education

    Investments
    1. Birla Sun Life TOP100 – 4000 monthly SIP
    2.ICICI Value Dicovery fund- Rs 2000 MonthlySIP
    3. Franklin India Smallers company fund Rs3000 Monthly SIP
    4. HDFC Balanced Fund Rs3000 Monthly SIP

    I can increase Monthly SIP by 3000 Rs.Pls suggest if these above funds are Ok or needs replacement and where I can put additional 3000

    Long term Goals-Retirement- required corpus -2.5 Crore. Present Monthly expenses 30000/-

    Investments for 30 years
    5 icici prudential Tax Plan – 2000 Monthly SIP
    6. Reliance Retirement fund -3000 Monthly SIP

    Dept part

    PPF account -2000/- Monthly
    apart from that EPF in my company’s trust – 3000 deducted from salary
    LIC jeevan Mitra Triple Cover 17000 Yearly.I have already paid for 5 Years and policy is till 2040.

  • Hello sir,, from this year i will b eligible for tax. M 28 yr old married n working in bank as a clerk. My husband earns good so i don’t have any financial pressure but i want my money to be utilized in best way. Just got d arrears around 80000. Please suggest me d best way to use fortax saving n wealth increase. M so confused but determined for savings. Please help.thanks in advance

  • Hello Sreekanth,
    Good article.
    Am working & can accommodate Rs. 5000 every month on investment . Would like to go for 1 ELSS & another fund which can help my daughter’s higher study in next 6 years. Could you please suggest . Thank you

  • Hello sreekanth

    I am working in a bank aged 26 and I can save 15000 p.m. I want to invest in ELSS for tax saving n wealth creation , also want to invest in mutual funds for good returns (aggressive). I have only one LIC with annual premium 20000 only.
    Goal: to accumulate rs 8-9 lac till 2019…

    • Dear Tarun,
      Let me know the LIC policy plan name. Do you have dependents? Are you a married person?
      Units allotted under each SIP in ELSS fund will be locked for 3 years, so if you need money in 4 years from now, it can be confusing and challenging when you want to redeem money. So, you need to carefully plan your investments in an ELSS fund.
      Kindly read my article on Top Equity funds for SIP.

  • Dear Sreekanth ,
    Many thanks for this wonderful article. I had a question . I had investment in Hdfc tax saver, dividend payout option,investing since 2011 onwards but not in sip. Shall I stop further investment & withdraw. or only stop further investment & hold or invest .
    I ‘m also investing inAxis long term equity since 2013.
    Suggestion please.
    Thanks

      • Dear Sreekanth ,
        Many Thanks for respond. Ya, my goal is modest amounts at my age of 60 years . Today I am 42 years old.My investment is for long term in HDFC tax saver. In Axis long term which is growth option is for 7-8 years.
        Thanks

          • Dear Sreekanth,
            Many Thanks for your advice. I will start switch to Franklin Taxshield Fund.
            I do not have only investment in ELSS. I also have Franklin India Prima Fund– Dividend Payout, ICICI Value Discovery Fund, ICICI Focus Blue Chip, ICICI Balance Advantage Fund, L&T Special Situation Fund.
            As my mother ‘s income is taxable so she invest regularly in elss to save tax & takes dividend payout which is tax free.
            I also have HDFC PrudencefFund- sip & few debt funds, SBI Gilt Fund, Franklin India Gilt Fund –LTP, Birla MIP II – Wealth 25, UTI Gilt Fund, UTI MIS Advantage Plan. Escorts Opportunities Fund.
            Thanks
            priyabrata hazra

  • Dear Sir,
    Thank you very much assistance.
    My Goal is 20 Lakh in 5-7 Year. Capable to invest 20000 INR/Month. Would you please let me know Which type of fund is best and will be suite for my goal.
    Few fund i have selected is it good or need to change please advise me

    1) ICICI Focus blue Chip fund -3000
    2) TATA Balanced Fund & ICICI Pru Balanced fund-5000
    3) Birla sunlife Gen Next fund -2000
    4) AXIS equity (ELSS)- 2500
    5) Franklin India tax shied ELSS.-2500
    6) UTI Dynamic Bond -4000
    7) Relaince Equity opportunity fund-1000

    Among them I have selected two ELSS for adding good return only.

    Regards,
    Chandan

    • Dear Chandan,
      To get Rs 20 Lakh in 7 years, with Rs 2.4 Lakh per month contribution, you need to get returns of around 5% pa.
      So, the goal can be achieved.
      Suggest you to trim your portfolio. Consider these funds;
      ICICI Focused
      TATA Balanced
      ICICI Balanced
      Birla Sunlife MIP II wealth 25 plan.
      If tax saving is not one of your investment objectives, ignore ELSS funds.

  • Dear Sreekanth,

    Nice article! Informative.

    I come in 20% tax slab.
    From Jan-2015 I have started to invest in MFs & ELSS through SIP and I have plans to invest 2L in this FY.
    I have already invested in PPF, LIC.
    And, I have few bank FDs of 1 year term.

    For my new savings, I am thinking of where to invest.
    If I invest in short term bank FDs, there is no tax exemption + tax on returns. So whatever comes in interest, all goes in tax.

    I have no loans. No much personal commitments as of now.
    Can you suggest some investment options where money can grow?

    Thanks!

    • Hello Sreekant,

      Need your help for savings just now have started am ElSS plan of Axis bank(15K/month) and want to invest more (25K/month) as have free cash available so should i go for SIP in Mutual funds.

      Regards,
      Ganesh

  • Hi Sreekanth,

    Nice article. I have following mfs in my portfolio. I want to sell few mfs and want to invest in other good mfs. Suggest which mfs should i sell. In certain mutual funds which i was investing i have stopped investment as they were not rated good. Hence, the ongoing indicates fresh investments which i m making through sip on monthly basis.

    Hdfc tax saver elss – stopped investment
    Hdfc top 200 – stopped invstmnt
    Axis long term equity elss – ongoing
    Canara rebecco tax saver elss – stpd invstmnt
    Franklin india tax shield elss – stpd invstmnt
    Dsp black rock micro cap – ongoing
    Franklin build india – ongoing
    Franklin infotech – stpd invstmnt
    Icici pru banking and finance – stpd invstmnt
    Birla sunlife tax relief 96 elss – stpd invstmnt
    Sundaram tax saver elss – stpd invstmnt
    Principal personal tax saver elss – stpd invstment

    Regards
    Mehul

    • Dear Mehul,
      I could see that you have invested in lot of ELSS funds. One or two (max) are more than enough.
      You may stick with Axis LT fund & Franklin India Taxshield.
      Suggest you to redeem sector oriented funds – ICICI Banking, Franklin Build India & Franklin Infotech.
      Continue with – HDFC 200 & DSP Micro.

      Let me know your financial goal(s) and investment horizon??

  • I have been reading your articles – and i am very impressed with your knowledge.
    Can you please suggest something regarding PPF – I have opened PPF accounts both in my and my wife’s names. My plan is to invest 1.5 lakhs in each of the accounts every year religiously. I used the on line calculator to calculate the final amount at the end of 15 years with a simple calculation of 8.7% interest. As per this calculation it comes to around 46 lakhs. However when i check the interest being entered on my passbook – it is very less. Can you please advise – can we really expect 46 lakhs after the end of 15 years.

    Thanks
    Sanjay

    • Dear Sanjay,
      The PPF calculators (available on net) may give you wrong results but your banker / postoffice calculations may not go wrong.
      As per my calculation, you may receive approx Rs 46.75 Lakh per PPF Account (15 years, 1.5Lakh pa at the beginning of every year, @ 8.7%).

    • You may receive only if you put lump sum money 1.5 lacs at a time, between April 1 to April 5, every year, right from start. I also did the same mistake and invested at the last of year, and got hardly any return. Now after 2-3 years, I am investing in the start only. Due to lack of correct information, all this happens. But the point to remember is that the interest calculation is done every month: the interest is calculated on lowest balances in account between 5th and last day of the month. So if you don’t deposit on/before the 5th of a month, you don’t earn interest for that month.

      So bottom line is , you get maximum return, if you put lump sum 1.5 lacs between April 1 – April 5, then you get slightly lower return if you put equally every month, and then at last, you get least return if you put at the year end.

      Hope this simplifies the doubts for all people like you and me, who don’t know much about commerce etc………….

  • Hi Sreekanth

    I’am 30 yrs old and got married a yr ago.
    i just have LIC investment. My salary is 70k/month.
    I have a Home loan ongoing, for intereset 15k/month.

    I’am thinking to invest in ELSS.
    Could u pls suggest the steps and plans to chose.
    As suggested i dont have lump sum to invest. I think i could invest 8k/month.

    Suggestions pls

    Thanks
    Vinod

    • Dear Vinod,
      Do you have term insurance cover? Kindly share LIC policy details.
      ELSS funds are good long-term wealth creation and to save some taxes too.
      Just pick couple of good ELSS funds (if one of your investment objectives is TAX SAVING) as mentioned in the above list and book SIPs (Systematic Investment Plans).
      Initially you can book SIPs for say 12 months and understand how MFs work. After that, you may extend your SIP tenures.

  • Hello Sreekanth,

    Appreciate you efforts and all the minor details you have considered to get to the listing.
    Your Top lit will definitely help us in planning our investments.

    This is the first time I have ever visited your site but now plan to be a regular viewer. 🙂

  • pli for 8laks
    i have two kids…7&4 yrs …
    i neeed mny for kids education purpose….
    mainly …i have to save some more money for tax saving …

  • Hi Shreekanth,

    Greetings !!

    I am a salaried IT engineer and currently maintaining an equity portfolio of Rs 21 L in a DMAT account.
    Around 2011, this portfolio value was around 16 L.

    I am interested in selling these equity in phases(not all) and invest lumsum in MF (Growth). This can also help me in tax saving annually. I am 37 single , never married. No LIC. Company provides group health insurance.
    I do not have any medical insurance.
    I dont think I will ever marry.
    I donate a descent amount to charity and NGO that take care of under privileged children.

    So what would you suggest me on how shud I go about the investment ?

    Appreciate your time and guidance.

    Thanks,
    Santosh

    • Dear Santosh,
      Your priorities should be;
      1 – Buy Mediclaim health insurance cover
      2 – Enhance your health insurance cover by buying a Super top up plan; Read my article – “Super Top up health insurance plans“.
      3 – Buy Personal Accident plan & Critical illness cover
      4 – Suggest you invest in Equity mutual funds for your retirement planning (gradually switch from stocks to MFs). Read my article : Top Equity Funds.
      5 – Also maintain sufficient emergency fund all the time.

  • sr…i m amar ..govt employee….geting 50000 salary monthly…
    my savings…
    PF 5000
    APGLIC 1500
    PLI 2000
    i hav need to save some mony for tax purpose
    i want invest in ELSS
    pls give u r sugetion….
    tnk u sr

  • Dear Sreekanth Garu.. I am Advocate by Profession and aged about 37 years and blessed with 1 Male child aged 7 years. As on this date, i owned apartment without any loan. I earned 52 Lakhs from my profession and the same was deposited as Fixed Deposit in Nationalised Bank for 3 years. I am now getting average monthly income of Rs.50000 from my profession and i am paying Rs.4000 SIP in ICICI Pru Tax Plan Dividend from August 2010 and Rs.1000 in ICICI Pru Child Care Gift Plan and from this march 15, i am paying Rs.2000 in Motilal Oswal Most Focused Long Term Fund. I am now planning to deposit lump sum amount (single time payment) in MF’s. Can you plz suggest which plan is best for receiving good returns and how much term i have to wait. If any valuables in concern with savings, plz suggest..

    • Dear Pratapa,
      Let’s first analyze the existing investments;
      1 – Fixed Deposits : Kindly read my article – “Avoid FDs / RDs for long-term investment horizon“. Is there any specific reason for investing such a big amount in FDs? What is your investment objective?
      2 – ICICI Pru Tax plan Dividend option is a good scheme. But, its better if you opt for GROWTH option.
      3 – ICICI Pru Child Care Gift plan : Stay invested
      4 – Motilal Oswal Most Focused Long Term Fun : It’s new fund. My choice would be Franklin Prima Plus / ICICI Dynamic Fund. What is your investment horizon with respect to these MF investments? Any specific financial goal(s)?
      5 – Do you have term insurance coverage?

  • HI.
    I need a little help.I am working with govt of West bengal.I am 33,have a wife and a daughter.I am in service since 2003.Present take home salary is around 22k(excluding GPF)

    My savings are as follows :-

    1.GPF @4000 p/mth at present(accumulated around 2L30k)Will increase to 5000 pm
    2.Recently opened ppf (2000 p/mth)
    3.recurring deposits Rs 1500 pm in bank

    Insurence:-

    1.state govt insurence upto 1l cashless
    2. mediclaim with oriental insurence(75000 but will go to 2-3L next yr)
    3. Jeevan arogya(Rs200 daily cash) premium rs 4k approx per yr(took because I can get cash benefit for admission and can get advance for surgeries if any in advance)
    3. 2 lic policies(50000 S.A and 1L S.A (money back policy))
    4. Term insurence with aviva 5 Lakh. prem -2600/-per yr

    Recently I have thought of investing in mutual fund for my daughters education,marriage etc and I have seen that in some months I can save 3000-5000 for investing(some months it comes to 1000 also)
    I did some research and Invested in 2 Funds last 2 mths,both direct plan nd growth option I have bought all of them online. 1)UTI equity 2) canara robeco emerging equities .
    I am thinking of starting investing in Franklin Smaller companies fund Next month
    First one is large cap and next 2 are mid nd small cap.I dont mind taking risk in small/mid cap since there can be greater return and I am thinking of investing for at least 7-10 yrs.The reason I have not opted for SIP is that I can invest directly 1-5 k in each funds in any day of month at my convenience,without bothering balance in account.

    Should I carry on investing in those funds or do u suggest any other.
    And can /should I diminish/stop the jeevan arogya plan.

  • Hi Sreekanth,

    I am new to ELSS mutual fund. My aim is to invest 20000 per year upto 5 years, at the same time I want for tax saving. I am not sure how many years going to continue for this ELSS, but yes if it is going well , I can continue for long time may 10 to 15 year also. Please suggest me which mutual fund is suitable for me for investment and please guide me how to purchase the mutual fund or how can I do it.

    • Dear Pradeep,
      Pick any ELSS from the above list.You can purchase the units from online platforms like fundsindia.com / icicidirect.com etc., (or) invest in DIRECT schemes through the respective AMC websites.

      • Thanks Sreekanth,

        I am S/W engineer, I can invest more money than 20000. But looking for security I am bit hesitate to invest in ELSS and mutual fund etc. because my job is not secure. What ever I am earning want to secure my future. I am 34 married and after some month having a child. I am having PPF account no LIC and no other investment plans. For time being I can invest around 4 lacs per annum. Please guide me how can I invest my money so that I can feel secure and get more returns. I have not take any health policy because my company provided 3 lacs policy. please guide me how to take best health policy and invest my money properly. Other than that if u suggest any think better way to invest please guide me. I am waiting for your response.

        • Dear Pradeep,
          1 – Create an emergency fund. Open Recurring deposit account (or short term FD), accumulate a fund which is around 6 months of your monthly living expenses.
          2 – Buy a Term insurance cover. Understand what is term insurance. Don’t buy Child insurance plans / Endowment / Money-back plans. Read my article – ” Top 7 best online term insurance plans“.
          3 – Buy a health insurance plan – Family Floater plan (example – Star health family optima). Dont depend on employer’s health insurance cover (as you are also saying that your job is not a secured one). Enhance your health insurance after one year by opting Super Top up plan. Read my article – Super Top up Health insurance plans.
          4 – Your high priority goal should be Retirement goal. Read my article – “Retirement planning in 3 easy steps“.
          5 – After your kid is born, start invest in equity mutual funds for her Education goal . Read my article -“calculate how much to save for your kid’s education goal“.

          • Hi Sreekanth,

            I want to findout these two ELSS funds in Fundindia i: e Axis Long Term Equity Fund and Franklin India Taxshield Fund, But I find out with different name these are 1.Axis Mutual Fund, 10.Franklin Templeton Mutual Fund. Weather these same or different. Please guide me.

            • Dear Pradeep,
              Axis Mutual fund is AMC or fund house name, under this you can find / select scheme – Axis long term equity fund (ELSS scheme).
              Same is the case with Franklin Fund.

  • Dear Sir,

    My age is 25 years.I am planning to start investment for long term basis and also having tax benefit.I have selected to do sip in
    these fund

    1.Axis Long Term Equity Fund-3000rs
    2.Franklin India Tax Shield Fund-3000rs
    3.ICICI Prudential Tax Plan Regular Plan-4000rs

    i am planning for 10-15 year term returns.

    I made one consulting.The advisor suggested me to take ulip plan of sbi growth and balanced fund 5k each.He said he wont suggest to go through mf as market last 8 months is almost the same.

    Now i am confused where to go.

    kindly guide me.

    my aim is
    1.tax saving
    2.returns for 10-15 year hold capacity.
    3.Retirement

      • Can i go with lump sum 10000rs each divided into the following three funds or should i change the amount

        1.Axis Long Term Equity Fund-3000rs
        2.Franklin India Tax Shield Fund-3000rs
        3.ICICI Prudential Tax Plan Regular Plan-4000rs

        with sip?

        Is zipsip or fundsindia good?

        Thanks

        • Dear Kunal,
          I believe that two funds are enough. Do note that units allotted under each SIP are locked for 3 years. No real-time experience with zipsip. Fundsindia is good and I invest in some MFs through this portal.

  • Hi Sreekanth,

    Thanks for the great insight and generosity for the recommendations.

    Requesting to provide some insights regarding distribution of funds in various classses of MF’s (Large, Mid, Diversify, ELSS, etc) in term of percentage. My age is 34 and my planned investement tenure is about 10 years.

    Please let me know at your earliest convinience.

    Thanks & Regards

    Hitesh

  • HI, I opted for tax saving SIP investment 5000 every month by ECS. Now I have doubt about maturity. How the amount would come into my account. What would be the basis of calculation. As I read somewhere there it was mentioned each monthly investment has a lock-in period of 3 years. So, the investment in Jan’ 2015 would be into my account with that time NAV value (obviously multiplied with units) by Feb ‘ 2018

    If I go with reinvestment option. What that means. Can anybody share some link clearing my doubts.

    Please guide.

    • Dear Anmol,
      You need to redeem (after 3 years) the units to get back your money. The returns are dependent on the fund’s portfolio of investments. ELSS fund invests around 65% to 100% of fund’s corpus in equities (stocks/shares). Yes, units allotted under each SIP are locked for 3 years.
      Re-investment option for ELSS funds have been discontinued.
      Kindly read my article – ” Re-investment option for ELSS funds discontinued“.

  • Dear sir,
    I am working in a Govt. dept. I get gross annual income of Rs.5.8 Lakhs. I am 42 years old having a son of 14 years and daughter of 11 years old. I have subscribed rs. 8000 pm for 4 years in RD which will mature to appro. 4.5 lakhs (9%) in 3 years which will be useful for son’s study. I have already put a endowment insurance policy with LIC for 2.5 lakhs sum assured which will mature on 2022. another endowment insurance policy (PLI)for 1 lakhs sum assured which will mature on 2021. I have started Suganya Samriti girl child savings scheme in last month for my daughter. I need appr. 10 lakhs in 7 years to meet out my daughter study and 20 lakhs in 13 years for marriage. I will be grateful if you Kindly suggest me the financial ways to achieve my goal.

  • Dear Sreekanth,I have a query.Franklin Taxshield is your favourite ELSS fund.Its NAV is 424.63.It was launched in 1999.If I have invested Rs.ten thousand in 1999 in this fund,it must have grown to 4,24,630.If I am wrong kindly correct me.
    Q1 Can I expect similar returns in next 16 years.
    Q2 Can we apply same NAV yard stick for selecting mutual fund for future investment.
    Kindly reply.

    • Dear Mr Bansal,
      Past performance may or may not be repeated. So, it is advisable to invest in different fund categories and also in different asset categories.
      Consider the past returns and risk parameters while finalizing the funds.
      Fore more information, kindly read my article – Top 15 Equity funds.

  • Dear Sreekant

    I am a senior citizen and have some income in taxable range. This regular income may continue for another year. Seek tax saving plan with a maximum lock in period of 3 years.

    During the year 2014-15 I have invested 1.5L in ELSS

    Can you suggest suitably for this year investment.

    Gopal

    • Dear Gopalakrishnan,
      Do you require tax planning advice for this financial year, am I right?
      ELSS is the best option if you are looking at a max lock-in period of 3 years. But, do understand the risks associated with ELSS.
      Are you going to earmark these investments towards any of your financial goal(s)? If so, what is the time-frame?

      • Dear Sreekanth, your article on top ELSS funds is very informative.Frankline India Taxshield Fund is your one of favourite funds.I

        • Franklin Taxshied was lunched in 1999.Its NAV is424.63.It means this mutual fund has multipled our investment 26 times since 1999.We can say 1000 has become 42463 in 16 years.Kindly correct me if I am wrong.Dear Sreekanth ,can we expect similar return in next 10-15 years.Can be apply same yardstick while calculating past performance of top mutual funds.kindly reply.

  • Quantum tax saver is the mirror-image of Quantum long term equity. Till 1 year back, (until the MODI irrational exuberance started), QLTE was no 1 in returns (among large-mid caps) in 5 and 7 year period. What I mean to say is that we need funds which will stand strong in a sideways or downturn market.
    Even if u look at last 1 month, which has been very volatile, (though 1 month is never a good parameter to compare, just that it was a mini-bear period), Quantum tax saver stands out among all tax savers……1st rule of finance- never loose more money than others in bear market. Making more money than others in a bull market is secondary.
    Thanks,
    Kuntal.

    • Dear Kuntal,
      I have shortlisted few good funds (out of hundreds) based on the criteria as mentioned in the article.
      If you believe that the Quantum funds are good based on your research / conviction, stay invested. Cheers!

  • Any particular reason to exclude quantum tax saver? It has beaten most peers OVER A FULL MARKET CYCLE (that too with minimum volatility). Of course, it will under-perform in an irrational bull market.

  • Hi Sreekanth,
    First of all I would like to thank u for your excellent knowledge in investment planning.

    I want an advice from u regarding investment.I am 24 yrs old.I want to investment 5000 pm in SIP in ELSS schemes for 5-10 yrs.Suggest me top 5 ELSS schemes with high performance.what will be better if I invest 5000 in one schemes or equally divided that is 1000 in each schemes.
    Also suggest me
    1. where should I contact for this schemes?
    2. If I want to invest from May,2015 will it be better time to do so?
    3.can I change sip amount in any course of time?
    4.If I stop investment for some reason for a period of 3-6 months should I resume it again.
    5.how can I redeem the value after 5
    or 10 yrs?
    6.After 5 or 10 years should I redeem the total amount I have deposited?
    7.how can I know what will be the right time for redemption so that I can get maximum return?
    8.Also let me inform about other 3 top performing mutual funds other than elss.
    Awaiting for an early reply from you.

    • Dear Phalguni,
      You may select two ELSS funds. (Franklin Taxshield / ICICI Tax plan / Axis long term)
      1 – You can visit the respective Fund houses websites to invest online & Direct (or) check out this option fundsindia.com. You may also invest through brokerage platforms like icicidirect.com
      2 – Any time is good time to start SIPs. It is tough to time the market. Since your investment horizon is long-term, suggest you to JUST DO IT.
      3 – Yes, but this depends on the platforms you chose (value added features).
      4 – Yes. Most of the platforms provide PAUSE option.
      5 – Yes
      6 – Yes
      7 – Link the investments to one of your Financial Goals.
      8 – What is your investment horizon?

      • Thank you for your reply.
        If I invest through brokerage platforms like icicidirect.com as you say.Then I have to pay them or not.Also you have published in one article about http://www.mfuindia.com/. Can I invest through this website? Will it be a trustworthy website?

        • Dear Phalguni,
          Yes, the brokerage houses levy some charges. As of you now, you can’t invest online through MFU, they may soon start online services. You may invest in DIRECT plans too. Its developed by the fund houses themselves, it is trustworthy.

      • Hi Srikanth,

        You have advised me that I can invest in all types of mutual funds through fundsindia.com.so today I have registered in this website.But they have told me to update pan no and to give bank account details with ifsc code.So I am bit confused and want to know that it is safe to invest through them after revealing all the bank and pan details.Please inform me.

        • Dear Phalguni,
          I personally invest in MFs through them. I believe that it is safe.
          If you are not comfortable, you may consider other option like icicidirect.com (Do note that, here too to open a demat account you need to submit PAN and KYC documents)

  • Dear Shri Sreekanth Reddy,

    Thanks for the nice article. Your effort at making people financially literate is commendable. Please keep up the good work.

  • Hi Sreekanth,

    Thanks for the article clears a lot of ambiguities.

    Now for my investment
    I am 27 M and have my parents as my dependent.

    I have a Medical Cover of 4 lakh for myself from my office and another 2 Lakh from HDFC ERGO.

    I need to buy a Term Plan please suggest which one to go for?

    My plan is to invest 3 Lakh as part of this financial year and I have 2 Lakh Lump Sump amount standing to invest right now. Please suggest the instruments for maximum returns in 3-5 yrs period. Would prefer 3 yr Lock in but can opt 5 yrs also. (1.5 Lakh to be utilized in Tax Savers, if possible complete in Tax Saver)
    I am new to ELSS so should I invest 50K lump sump in the Top 3 ELSS as suggested by you for 3 years or 5 years?

    I invested 60000 in HDFC Tax Saver G in 2011 as part of Tax Saving through SIP and the complete 3 yr lock in ends somewhere in May. Hence the returns amount is also available for Reinvestment (Last checked it was 1.09 Lakh). What do you suggest, should I withdraw it and invest it too in some ELSS? If yes in which, If No why?

    I also have a balance of 10-15K per month from my salary which I am planning to keep aside for emergency funds, what should I do with the same, ELSS, RD, Short Term FD or anything else? The lump sump out of this if saved could be used for next year investment purpose.

    Thanking you in anticipation.

    Naman Maheshwari

  • Hi Sree, excellent write up. I have a question. I am planning to invest Rs.40,000 per month in ELSS. Is it better to find 2 schemes and split the investment into two 20,000 investments or is it better to just stick with one and put the entire 40,000 in one scheme? Thanks in advance.

    • To add to my above comments, my goals are long term savings (more than 20 years). I am 35 year old planning to invest the above 40,000 towards retirement.

        • Sree – Other than the EPF (Rs. 5,200 per month), I do not have anything else at this time.

          • After going through the Retirement article you linked, let me add some information.
            1. I have a term life insurance policy for 2 Cr.
            2. I have an emergency fund and a health insurance policy for myself and family.
            3. I have some Mutual funds (SIP) with a target of 5 years for short/medium term goals like house down payment, vacation travels etc.,

            After using the retirement saving projection excel you attached, it appears I need to save about Rs 45,000 per month in order to meet my retirement income needs.

            Since I have the EPF for Rs. 5,200 already, I would like to additionally try and invest Rs. 40,000 p.m towards retirement. I thought the best way to do it was thru ELSS since my retirement is still 25 years away.

            Hence, the question on how I can split the 40K for ELSS investment. Thank you.

            • Dear Kumar,
              What are your other tax saving investments? Is your 80c full?
              If not, you can consider investing in 2 ELSS funds.
              Consider Franklin Taxshield & Axis Long term equity fund.

  • Hey Sreekanth,

    Thanks for this insightful article and an informative blog !

    Please help me on the following queries :

    1. Going by some of your above suggestions, you don’t advice investing in ELSS with a 3 year horizon.What could be the possible alternatives that enjoy the benefits of 80 C and yield better returns ?

    2.Being new to the mutual fund sector, would ELSS funds serve as a good platform to start investing ?

    3. At the beginner level, how advisable it would be to rely on web posts (like this one) and go for a ‘Direct’ plan ?

    Thanks !

    • Dear Vaibhav,
      Thanks for your appreciation.
      1 – ELSS are equity oriented products and fall under high risk category. So, its not advisable to invest in them if your investment horizon is 3 years. ELSS is the best option to aim for decent returns but you need to invest for long-term.
      2 – What is your investment time-frame?
      3 – Posts like these can give you ‘direction’ and some basic information only, end of the day it is your money and you need to take the final call based on your financial goals. That’s why it is called as ‘Personal’ Finance. But, I make sure to provide unbiased advice or suggestions to my blog readers. No conflict of interest 🙂

      • Thanks for this nice and prompt response.

        Well, I primarily wish to save tax under section 80 C.

        For short term investment purposes, I mostly rely on FD n RD instruments. ( not under 80C)

        While for the long run, I would like to think beyond PPF this time.

        Hence, the desire to venture into the mutual fund world especially ELSS.

        Any other category of mutual funds that i should look into as a beginner ?

        • Dear Vaibhav,
          If your investment objectives are long-term and tax saving, do consider investing in an ELSS fund.
          If you want to test the waters and learn more about MFs then start with a Balanced fund and stay invested for atleast 5 years or so.

  • Hi Sreekanth,
    I am 34 yrs old ,I have a lump sum of 50L in my Saving, where and how to invest this amount is a big Question now , investing in FD will attract me taxes as i already fall in 30% bracket.
    I have a LIC with cover of 15 lakhs and aprt from this i have not taken any other Plans
    My Plans as of Now is to :
    1) Start a Term Plan for 35 years – CAn you suggest which will be good LIC eterm or ICICI
    2)SIP 10K monthly preferably – below funds suggested by a broker which one is godd or can you suggest
    HDFC MID CAP OPP FUND
    FRANKLIN INDIA HIGH GROWTH COMAPANIES FUND
    BIRLA SL FRONTLINE EQUITY FUND
    Axis Long Term Equity Fund (G)
    3) Medical insurance : can you suggest one though provided 3l by company am working with

    How can i invest the Lump sum of 50Lakhs as the above can be done as part of my salary.

    Thanks

    • Dear Umesh,
      By any chance, did you get this lump sum (Rs 50 L) after selling any residential property? Is it all white money?

      1 – Kindly read my article – “Top 7 best online term insurance plans“. Do not postpone. Buy a term plan with sufficient insurance cover ASAP.
      2 – Let me know your investment horizon? How long you can you stay invested? (Time-frame)
      3 – Are you married? Are your parents financially dependent on you? What about your parents’ health insurance cover?

      Do you maintain sufficient emergency fund to meet any unforeseen expenses?

      • Hi Sreekanth,
        Thanks , Yes its all White Money – as i stayed abroad for few years on project work
        1) On the term plan i plan to take a 50-60L cover for a period of 35 years – will choose between lic Eterm and icici
        2) The Investment Horizon for SIP can be 10 to 20 years taking in account total 10k per month
        3) Yes Married , parents are not dependent and i have medical cover 0f 8L for self , parents and spouce witha yearly premium of 20k from the employer.
        4)No as such no emergency fund will have to keep a part of this from my saving which will be invested but can withdraw on requirement with FD , i have to take the job insecurity also in account and starting a new business with a minimal investment

        looking forward for your suggestions

        • Dear Umesh,
          Suggest you to buy a family floater plan (for self & spouse). Do not depend entirely on your employer’s group mediclaim. Kindly read my article “Top up & Super top up health insurance plans“, these plans could also be very beneficial.

          Kindly go through this article too – “Retirement planning in 3 easy steps“. Suggest you to use the calculator which is available in the article and calculate the required amount of investment for your retirement goal.

          Maintain an emergency fund which can be around 6 times of your monthly commitments in cash / short-term FD or RDs / liquid mutual funds.

  • Hi,

    I am looking to invest in ELSS mutual funds.

    I am new to mutual funds so need some suggestions.

    I saw the best 10 ELSS funds. but, still confused in which should I invest.

    Can you please suggest me best 3 ?

    As per my analysis, Axis long term equity fund & Franklin India Tax Shield are good.

    Please let me know if any more suggestions from your side.

    Thanks.

      • Dear Sreekanth,

        Thanks for your response.

        I am looking for 3 to 5 years.

        One more Ques.

        Which is better,

        DIRECT or REGULAR Investment?
        GROWTH or DIVIDEND PAYOUT ?

        I heard that in DIRECT investment, charges will be less compared to REGULAR .

        I am planning to invest in SIP of Rs. 1000 per month. Is it ok ?

        Thanks.

        • Dear Jalpesh,
          If you chose to invest in these funds, suggest you to stay invest in them for atleast 5 to 7 years.
          If you are comfortable investing in DIRECT plans, go ahead and do so. It’s beneficial.

          • Dear Sreekanth,

            Thanks for your support.

            One more Ques, I have.

            I have one HDFC Life ProGrowth Plus (ULIP) Policy. There, I have invested in Balance Fund & Bluechip Fund.

            I am paying installment of Rs. 10,000/- half yearly and paid 2 installments till now.

            So almost one year is over.

            What is your opinion for this ? Is this good policy ?

            guide me if any….

            Thanks.

            • Dear Jalpesh,
              Given a choice, I prefer to invest in Mutual Funds (they are flexible, liquidity is high, no commitment, control & tracking is possible, very transparent etc.,)..
              You may discontinue the policy. Your invested funds will be locked for 5 years (from the date of policy commencement). You can withdraw the fund (minus applicable charges) + around 4% interest amount after the lock-in period.
              Consider investing this premium in Equity Mutual funds. Revert to me if you need more details.

              • Dear Sreekanth,

                Thanks for your suggestion.

                I will withdraw it after completion of lock-in period.

                As of now I am planning to invest in ELSS funds as I mentioned earlier.

                Should I invest in 2 different ELSS funds or in single ELSS fund ?

                Apart from this, I am also planning to invest in short term plan.

                Can you please suggest me any short term plan with better return ?

                If I need money after 6 months or 1 year, I can use the same.

                Thanks for your great support.

                • Dear Jalpesh,
                  You may invest in Franklin Taxshield or ICICI Tax plan.
                  For short-term goals, do not invest in equity oriented products.
                  You may open a FD or a Recurring Deposit for this. You can also consider investing in a Debt mutual fund. Do note that, do not expect high returns in short-term .

                  • Dear Sreekanth,

                    Currently market is little bit down.

                    Even all top ELSS funds (Axis LT Equity, Franklin India Tax shield, ICICI Pru Tax saving plan etc..) are going down.

                    Is it good time to invest in mutual funds or Should I wait for sometimes ?

                    • Dear Jalpesh,
                      Anytime is good time to invest in Mutual funds, especially in MF SIPs.
                      It’s very tough to time the market. Just go ahead and don’t worry about short-term fluctuations.

  • I am new to mutual funds and want to invest Rs 4000 PM through SIP. I am planning to invest for tax saving as well so for that I opt for Axis long term Equity fund (G) and BNP Paribas long term Equity (G), 2000 PM each. Now my queries are:
    As ELSS have lock in period of 3 yrs do I need to continue this SIP of 2000 PM for both till 3 yrs or I can drop in between as well?
    If I continue till 3 yrs and thereafter I don’t want to continue with this ELSS funds then Is that mandatory to withdraw the funds and respective amount OR can I hold them for some years and after then I can withdraw then as per my financial requirements?
    Are the above stated funds are good for investment, provide your ideas. I found them through moneycontrol.com based on crisil rate.
    In case if I want to increase SIP amount(for same funds) in between 3 yrs or after that do I need to enroll for other SIP or I can continue with same SIP increasing my monthly amount?

    • Dear Nitin,

      1 – You may discontinue or pause your SIPs, no issues.
      2 – No, it is not mandatory to withdraw funds after the lock-in period (3 years). You can stay invested.
      3 – You may consider Franklin Taxshield fund instead of BNP fund.
      4 – You can increase SIP amount for the existing folios (however, this feature can be dependent on MF platforms)

      • Thanks Sreekanth for your guidance,

        Suppose if I invested for 5 SIPs for fund A and 12 SIPs for fund B and after that I discontinue from both. As per your clarification, this will be perfectly fine as per the ELSS investment rules. Though I will be able to withdraw MF benefits after three years only. Example, returns from the first SIP can be withdraw after 36 months, second SIP after 37 months of starting investment, 38 for third SIP and so on for the subsequent instalment that I made. Hence I will have my complete return from fund A after 41 months and for fund B 48 months after starting investment.

        Means three year lock-in period is for individual SIP and not for the investments? Is that true?
        Tell me if I misunderstood something.

  • Dear Sreekanth,

    please help me to understand ELSS .

    > can i direct invest in ELSS? what would be the process?
    >as an example if want to invest 50000/- in ELSS, should i invest under same company or split it in 2-3 different-2 schemes?
    >i can’t lock my money more than 3 years. could you please let me know the lumpsum ammount in general which i can get after 3 years.
    >similarly i want to invest same amount in every year then where i can find the details that these schemes are best return paying .

    Regards
    Prakash

    • Dear Prakash,

      You can invest in DIRECT schemes of ELSS funds. Visit AMC’s (Asset Management Company – fund house) website and select DIRECT mode while investing online. Soon, we may have another option to invest in DIRECT schemes ie MF UTILITY platform.
      You may invest in 1 ELSS fund (Franklin Taxshield or ICICI Tax plan). But, if you need monies after 3 years, suggest you not to invest in ELSS funds.
      You may visit portals like moneycontrol.com, valueresearchonline etc., to know more details about Mutual funds.

  • Dear Sir

    I am new to mutual funds. I plan to invest approx. Rs 50,000 in ELSS to save tax and at the
    same time, get good returns on my investments. Can you please suggest me which
    fund or funds I should opt for, invest as a lump-sum or as SIP, for what
    duration, and how to go about this investment-through an agent or directly
    online?

    Regards

    Dr.Syamal Modi

    • Dear Syamal,
      SIP or Lump sum, any option is fine, as long as your are investing for long-term wealth creation.
      You may consider Franklin Taxshield / ICICI Tax plan. The duration has to be decided by you, based on your financial goal(s).
      If you are comfortable investing ‘directly’, kindly go ahead.

      • Dear Sir

        Based on your reply, I was considering investing 25000 each in Franklin India Tax Shield and ICICI prudential Tax Plan(Total 50000) through Axis Bank MF services. Also, someone suggested me a financial plan which is to invest 50000 in April 2015, 2016 and 2017, each with a locking period of 3 years; then in 2018 collect the profit from the investment of 2015 and reinvest the principal, likewise for 2016-2019 and 2017-2020, and the cycle continues. Would you consider this as a good plan?

        Thanks and regards

        Dr.Syamal Modi

        • Dear Syamal,
          Kindly don’t do that, not advisable. Why do you want to re-invest in the same scheme? You may stay invested right? (Kindly let me know who is that ‘someone’?)
          Kindly understand the risks associated with Equity related investments.

          • Sir

            My idea was to invest 50K in FY 2015-16 so as to fulfill 80C requirement of 150K, likewise for FY 2016-17 and 2017-18. Each year 2 top funds are to be selected which means that funds of this year and the subsequent years may not be the same. The total profit in 4th year (of 2015-16 investment) will be set aside and the principal of 50K will be re-invested in FY 2018-19 in the 2 best funds of that time; this would mean that I would not need to shell out additional 50K in 4th year, instead the principal of 1st year is re-invested in 4th year, 2nd in 5th and so on. So 80C benefit is availed each year and the profit is collected separately. However, if you suggest not to follow this method, I shall go by your advice. (This ‘someone’ is a colleague of mine who claims to be a good financial adviser).
            Thanks again
            Syamal

            • Dear Syamal,
              kindly do not implement the mentioned method. You may not get the benefit of COMPOUNDING effect..
              Select good funds and stay invested in them for long-term. Keep tracking them once in a year.

              • Good morning Sreekanth jee. Thank you for your valuable advice. Kindly help me with one more query…this is regarding Mediclaim.

                I have a New India Assurance family floater mediclaim policy of 5 lakhs covering me and my spouse. Being the primary insured member I get the 80 D benefit of it. Can I take another medi claim of 5 lakhs from the same/another company with my wife as principal insured and me as spouse, so that she gets 80 D benefit and both of us are covered by the 2nd policy as well, so we have a total health cover of 10 lakhs ? Which public/private company should I opt for as the second insurer? Is LIC Jeevan Arogya a good alternative or should I opt for more traditional PSUs like United India or National Insurance, or maybe a private insurer like Bajaj or Apollo Munich?

                Regards
                Dr.Syamal Modi

  • Hi Sree,

    It is indeed a wonderful article..I have a query though, I want to spend a lump sum amount of 30k -40k in any of the tax saving scheme. Having lesser knowledge of this, I would request you to kindly help me with the same, as to how & where should I invest this 30-40k. Other than this I am even interested in a tax saving SIP as well. for that the amount I would go for can be 2k to 3k per month. I will really appreciate your prompt response.

    Thanks in advance for your help!!

    Regards,
    Ankita

  • May sound silly question, but wanted to clarify. Irrespective of SIP or lumpsum i can claim 80 c right? My employer has given provision to upload the sip premium reciept (under mutual fund exemption in 80c) to ensure the payroll takes care of tax deduction at source , but if i do a one time purchase of elss in a lump sum amount and upload the receipt hope that will also be okay for 80c deduction, correct?

  • Hi Sree,

    I am starting my job soon. I will be earning around 80k pm. How should I plan my investments…??
    I have no dependents. I learn few things from the questions posted above:
    1. Buy Term Insurance Plan
    2. Go for ELSS via SIP
    3. Go for PPF

    I am not sure how much to invest in these schemes??

    I want to split my investments into
    A)long term: which I can do via PPF and Term Insurance
    B) 2-3 years. I will be requiring some cash around 2-3 lacs for some purpose/

    Waiting for your prompt reply. Thanks!!

    • Dear Gaurav,
      Below are my suggestions;
      1 – You may postpone buying a term plan (as you do not have any depedents as of now). But consider buying a Health insurance plan with a Sum Assured of atleast Rs 5 Lakh. (Kindly note that ‘term insurance plan’ is not a long term investment. Its an insurance product to cover your life)
      2 – Start accumulating your Emergency fund to meet any unforeseen emergencies. You may invest some portion of your savings in Fixed deposits (short tenure) or invest in some Liquid Mutual funds.
      3 – Start investing for your Retirement Goal. Invest in equity mutual funds. Suggested reads – “Retirement planning in 3 simple steps” & “Top Equity funds“. You may allocate some monies towards ELSS (Equity Linked Savings Schemes) for tax saving purpose.
      4 – If you are going to contribute to EPF (Employees Provident Fund), you may ignore investing in PPF.
      5 – Start RD (Recurring Deposit) for your short term goal (Rs 2/3 Lacs accumulation). (Read my article – “Calculate future value of investments“)
      Revert to me if you need any help. Cheers!

  • Hello Sreekanth,
    Thank you for providing such a good article.
    I have few questions which you might have answers to –

    I started investing in 2011 when I joined my first company.
    Below are the 3 MF’s where I had invested in SIP manner of Rs.1000/- each
    Franklin India Bluechip Fund (G) – 10yrs(2011-2021)
    HDFC Prudence Fund (G) 2016 – 5yrs(2011-2016)
    ICICI Prudential Focused Bluechip Equity Fund (G) 2021 – 10yrs(2011-2021)

    Now I want to increase my investments from 3000 per month to around 8000 per month(extra 5000 from now on)

    Below are my questions –
    1)M 27 and ready for a large risk profile. So would you suggest me to go for Large Cap or Mid Cap? Can you suggest me some of them
    2)Should I invest all the 5000 in one MF or divide in 1000’s or 2500’s?
    3)One of my SIP is completing in 2016, should I reinvest in the same? the whole amount as base and continue in SIP?
    4)I currently do not have ELSS funds. As they have a lock in period of 3yrs, should I invest a lump sum(the output of my HDFC prudence next year) with some more money or should I opt for SIP
    5)How long should I go for investments. I invested for 10yrs in 2011, I was not sure about that long. Can i go ahead and invest in MF’s for 15? that would be till 2030!! and I will be 42yrs of age
    6)As these are open ended and no charges are there after one year, does it mean I can withdraw the amount if required after 1 year without any exit load?

    Thank you
    Dev

    • Dear Dev,
      You are very clear about your investment time-frame & MF choices. Appreciate you.

      The 3 exisiting funds are good ones. But, you may opt for either Franklin Bluechip or ICICI Focused.

      1 – As your investment horizon is long-term, consider investing in Mid-cap funds. For the next 10 years or so, you may allocate more monies towards midcap oriented funds like UTI Midcap / Franklin Smaller companies fund.
      2 – Allocate your monies in suggested funds.
      3 – HDFC prudenced fund is a good one. You may continue your SIP.
      4 – You may invest lump sum amount once in a quarter in a good ELSS fund (like Franklin Taxshield or ICICI Tax plan)
      5 – Kindly read my article on “Retirement Planning in 3 simple steps“. This may help you to know the required amount of savings for your retirement. You may plan your investments accordingly.
      6 – Most of the schemes do not charge an exit load after one year. But, it is better to re-check. You can find these details on moneycontrol.com too.

  • Hi Sree,

    I want to invest yearly 2 lakhs for next 15 years in MF through ELSS. Can you suggest me which one would be good ? And based on the current data how much can i expect as return from this ? Is there any good SIP calculator ?

  • Hello Srikanth,

    I understood that all the mutual funds are classified based on the Market Capitalization like large cap, small cap etc.

    My queries are

    1) In which category these ELSS funds are classified (large cap, small & mid cap)?

    2) Is that only “tax benefits and Lock-in period” that makes difference between normal equity MFs and ELSS Mfs ?

    Thanks,
    Harish.

    • Dear Harish,
      Very good question..
      1 – ELSS funds are classified as Tax saving mutual funds. Whether a specific fund has largecap or midcap orientation, that we can get to know after looking at the Fund’s portfolio of investments / scheme’s investment objective.
      2 – Yes, you are correct.

      • Hi Sreekanth,

        Thanks for the prompt reply.

        In one of your posts I have seen ““If your goal is 5 to 7 years from now, I suggest you not to opt for ELSS funds.”

        Ideally what is the minimum time horizon you suggest for ELSS?

        Thanks,
        Harish.

        • Dear Harish,
          I am comfortable to invest in any equity related schemes, only if my investment horizon is >10 years. But, one may consider balanced funds if time-frame is around 5-10 years.

  • Hi,

    If I intend to start an SIP of Rs. 2500 by investing in Franklin India Tax Shield, then based on on its current NAV (Rs.417.5981), I would end up quite less number of units if compared with Reliance Tax Saver or any other top rated ELLS plan suggested by you.
    I need your advice whether current NAV of a fund can be a criteria for choosing a mutual fund or not.
    Essentially, I want to start an SIP of Rs. 2500 each for 2 ELSS. I have zeroed in on Axis Long Term Equity Fund but I am unable to decide between Franklin India Tax Shield and Reliance Tax Saver.

    • Dear Ankit,
      Do not worry about the current NAV. You need to give more importance to the funds’ performances in percentage terms.
      Reliance Tax saver has high standard deviation (very volatile and not consistent in generating good returns).
      You may consider Axis and Franklin funds.

  • Thanks for the good article.I need to invest 50000 for 80 C this year.I have not put into PPF this year.Would you suggest PPF or ELSS or FD.We are kind of still shifting so I am not sure when we will need this money,though I have good reserves.I thought ELSS is only 3 yr lock up so the shortest time of investment but I understand after going through the article that it has to be realy long term.15 years in PPF looks long and somehow I feel equity should give better results if we were to be invested for so long.I was a bit surprised that u feel everybody shoyld invest into PPF.Kindly clear my doubt.
    Kindly suggest in what I should invest.If ELSS whether to split up into 2 funds?

    • Dear Sharada,
      If you do not need the money in near future, ELSS funds are the best ones.
      I have not stated that everyone should opt for PPF. PPF is a great savings tool, you may consider it to balance your portfolio. You may allocate a minor portion of your savings towards the PPF account.
      You have mentioned that ‘you have good reserves’, so suggest you to invest in ELSS funds. Consider Franklin Taxshield or ICICI Tax plan.

      • Thanks for your reply Srikant. Does it mean that PPF allocation should be only a part of the investment? or do we first fill 1.5 lakhs into PPF and then adjust the remaining investment into mutual funds.pl clarify.
        Could you suggest some liquid and debt funds?Are they better than FDs for emergency funds?Thanks

        • Dear Sharada,
          Do not fill your 80C with just PPF investments alone.Rather, first identify your financial goals and then work on allocating the monies (savings) to different goals. In the process, if you could identify tax efficient products which meet your goal requirements then invest in them on a priority basis.
          For Emergency Funds, you may consider keeping your reserve amount in Sweep-in savings bank account, short term FDs, or in some savings accounts of few banks where interest rates are around 6% to 7% (kotak/YES bank). Remember, the first priority is the safety of capital and not the returns (when it comes to emergency fund management).

  • Hi Sreekanth,

    I am planning to invest 3k in ELSS from April 2015 keeping into consideration my tax savings as well as a part of retirement corpus. I am 28y old and still I have 32 y left.

    I have chosen axis long term and franklin india to invest with. What do you suggest, shall I invest in equal proportion(i.e. 1500 each) or any different proportion keeping the NAV into consideration? Also, I am planning for SIP so, till how many years I should ideally invest and then hold?

    I am planning to increase the investment amount every year or so..

    Thanks,
    Vee Kay

    • Dear Vee Kay,
      Both the funds are good ones. You may continue with your investments till 25 years from now. Yes, it is very beneficial to increase your SIP amounts every year.

      • Hi Sreekanth,

        Thanks. Could you please advise how should I go ahead with my investment funds for these two? 1500 each or 2K for Axis and 1K for Franklin? Will it make any impact?

        Thanks

        • Dear Vee Kay,
          You may allocate more monies to Axis (2k), as the fund has been performing really well over the last few years.
          You may allocate Rs 1k towards Franklin Fund.

  • Appreciate your expert comments.
    I want to invest lumsum 5 lakhs for 10 years for marriage purpose.
    Please advise on the best investment options I am NRI so not looking for tax saving
    Also whats your recommendation on term plans

  • i am 35 year old.my salary is 13.5 lakhs per anum, i want to invest yearly 20000 rs, plz suggest me tax free mutual funds for 3years lock period. plz suggest any sip investment mutual funds for better returns,monthly i can spend 2000 rs, plz tell me
    waiting for u reply
    thanks&regards,
    raghu.

  • Sir,
    My age is 31.I want to invest 3000/month in ELSS SIP from April,15. Should i invest in 2 different funds or 1 should be better.

    I want to save tax as well as good growth.I want to invest for long term & i want to withdraw the money after 10 to 15 year.

    Should i continue to investing 3000 every month for 10 yr or invest till 5 year.Then wait for the rest period.

    Thanks
    Mridul

  • sr…i m govt employe….for tax purpose i hav to save another 50000per annum..pls suggest me which elss is best one…

    • Dear Amar,
      You may invest in Franklin Taxshield fund, but understand the risks associated with ELSS Funds. You have to stay invested in them for long term. Kindly do not consider investing in ELSS funds just for tax saving purpose.

  • Hi shreekanth sir ..
    I am (age: 24yr) governmentnt employee.
    In post office there is one endowment plan for government employee is known as postal life insurance , which gives 8.67% interest and 70 rupees bonus on 1000 rupees sum assurance .
    So is it good to invest in this plan???
    There is 4000 rs per month premium for 1000000 endowment plan . when I went to post office , agent told me u will get 2400000rs after 20 yr investment. (4000/month premium)..
    Plz sir guide me what should I do ..should I select this plan or go for elss plan ???

      • Thank u soooo much sreekanth sir …for ur valuable suggestion …actually I am low risk tolerable kind of person ..so plz sir suggest me good investment plan ..I am able to invest 3000 per month for 20 yr long term …so I kindly request to u sir ..plz guide me …thank u so much sir for ur valuable support

        • Dear Jaydip,
          If your investment horizon is 20 years, you have to tolerate a little bit of risk to get better returns, else your wealth may not grow. Start investing in HDFC Balanced Fund. Do not worry about short term negative returns (if any).

          • Sir , now I am ready to invest 3000 per month for a 20 yr long term horrizone .. But I am little confuse..should I invest only in one fund or in different different fund ?? If different than in how many ?? And in which fund should I prefer ?? Can u plz suggest me in which funds should I invest ??..
            Thank u for ur support

  • Hey Shree!

    Thank you for the amazing blog you have displayed!

    Regarding ELSS Tax Saving Schemes I had few concerns. I understand it is 3 year lock in period either you invest lumpSum or SIP.

    Currently I am residing in USA, but I am still valid citizen of India. 60 years old and ofcource married. Since I sold couple of property and wanted to know best scheme for tax saving, or any other best investment options. For tax saving , I wanted to know where should I invest 1.5 lacks each for myself and my wife, I will be investing them in Lump-sum way. I do not need money after 3 years, but I would like to withdraw it and use it for my personal use or invest it back. Or if there is any other mutual funds which can drive me good returns, I would be willing to invest there.

    Thank you,

    Regards,
    Amar

    • Dear Amar,
      Thank you for your appreciation.
      I am little bit confused as to what exactly are your financial goals?
      You said that ‘i do not need money after 3 years’, more details plz.
      Is saving taxes a priority or long term investment or meeting your living expenses? Kindly provide me more details.

  • I am a senior citizen retired from a psu. I have invested my retirement benefits in Bank FDs and Post office MIS. My interest earning from FDs is 5.7 Lakhs per annum. (I receive 2.7 Lakhs quarterly as interest payment and balance gets accrued till maturity ). I am unable to utilise the entire 80C opportunity to reduce the tax as I cannot save much from the interest received as I require for my personal maintenance/expenses . Please advice.

    • Chandrasekharan Sir,
      Is 5.7 Lakhs taxable income under interest category or as you have mentioned, 2.7 Lakhs quarterly which will get converted to about Rs. 10.8 Lakhs annual income.
      Depending on your age you may get different levels of deduction from net income. Rather than keeping larger chunk of money in FDs, you can divide your corpus into FDs, ELSS maturing after every 3 years or as suggested by SREE you can hold on longer plus you can invest in Tax Saving FDs. Some of the reputed banks are giving 8.75% return on Tax Saving FDs as well. You shall opt for schemes which are giving you E-E-E benefits.
      You may wish to keep a small portion of money available with your bank for emergency medicals expenses as well, if you are not insured for health.
      I hope you are also taking Rs. 10000 deduction for interest income.
      Last but not the least, sometimes its better to pay small amount of tax and live peaceful life and enjoy post tax amount with free mind.

      • Dear Anand,
        Appreciate your participation here. Thank you and keep visiting!

        Dear Chandrasekharan,
        Do you have dependents? What are your approx monthly expenses ?

        • Dear Mr Sreekanth reddy , and Mr Anand,
          Thank you for your responses.
          I do not have any dependants.
          I have invested around 27 Lakhs in FD for quarterly pay-outs.(2.7 lakhs)
          Another 22 Lakhs in FD which will mature in 2016/2020
          My income through these investment is 5.6 lakhs.
          I require around 30K per month for my personal expenses. I have a cashless mediassist card.
          Now you can see my position and advise.

          • Dear Chandrasekharan,
            I am still not very clear about the figures..sorry..
            27 lakhs -> FD investment -> 2.7 Lakh, is this per quarter income or per year?
            What is Rs 5.6 Lakh? Is this accrued?

            • Dear sreekanth,
              27 lakhs -> FD investment -> 2.7 Lakh, is this per quarter income or per year? Ans (This is per year income paid quaterly)
              What is Rs 5.6 Lakh? Is this accrued? Ans (Includes above 2.7 L+ balance is accrual )

              • Dear Chandrasekharan,
                If tax saving is the priority then you can invest a portion of existing funds in 5 year Tax saving Bank Fixed Deposits. Kindly note that these investments have a lock-in period of 5 years.
                You may also consider choosing Post office Senior Citizens Savings Scheme, interest rate is 9.2%, maximum allowed investment is Rs 15Lakh and eligible for tax deduction u/s 80c.

  • I want to invest 1.5 lakhs every month. But do not want to lock in as may needs funds for ,registry on possession of flat,which is not certain when. Please advice as funds getting wasted in SB account.

    • Dear AJ,
      If you are not sure about your investment horizon, it is better to invest in bank fixed deposit, may be you can split the fund into two / three FDs.
      If you cancel your FDs, banks may levy nominal charges as penalty.

    • Dear AJ,
      As suggested by SREE you can open an account with Yes Bank or Kotak Mahindra Bank, which are giving you 6% interest on amounts in excess of Rs. 1 Lakh in your savings account. Plus you have a facility to open Online Fixed Deposits with these banks. You can create 1-2 month horizon FDs with Cumulative interest, you will get somewhere around 6-7% interest rather than getting 4% interest on standard Savings account.
      Also these modern age banks provide you with Sweep-In account facility wherein surplus amount in your Savings account is automatically transferred to flexible Fixed Deposits and if you give a cheque to third party, depending on the amount system automatically breaks some of the FDs and honours the cheque, thus reducing your headache to keep track of different FDs.
      This will work well for you. Also SBI has come up with one good Housing Loan product wherein balance in your savings accounts is subtracted from your loan amount before calculating daily interest, thus reducing your interest outgo on home loan, while you keep idle cash in your bank account for day to day purpose. This is as good as getting 9-10% return on savings account!

    • Dear Gyan,
      Depending on your financial background, number of dependents, career options you can take different routes, but in general you need to do below, irrespective of your background.
      Thumb rule is save 30%, 10% for emergency and 60% for spending.
      Savings
      1> Take Pure Term Insurance for maximum possible term. Usually 35 years. LIC is the best. I feel you shall opt for monthly Rs. 3000 as premium. Many agents will force you to buy other schemes, but don’t mix up insurance with investment. Take Pure Term Insurance at an early age as it covers life at least possible premium. You will thank me when you have kids! As once we have family we can’t afford higher premiums.
      This also makes up for your 80C investment for tax saving.

      2> Open a PPF amount. This is absolute must for every youngster. Save money for 15 years. Every year at least put Rs.48,000 into it. That is Rs. 4000 per month. This also makes up for your 80C investment for tax saving.

      3> Make SIP in to ELSS / Equity Mutual Fund / if you are brave/rich enough buy small quantity of equity shares of Group A companies. About Rs. 3000 per month.

      4> Take personal Health Insurance – MediClaim policy if you are not covered by your parents. Around Rs. 500 per month.

      5> Keep about Rs. 2000 in RD of 1 year. and Keep aside Rs. 2500 every month for emergency funds.

      Above 5 will add up to Rs. 15,000. You can enjoy Rs. 20,000 for your monthly expenses. If your monthly expenses are more you can reduce amounts you invest in above 5.

      • Dear Anand,
        Thank you for sharing your views.
        1- Agree with your suggestions. Opting for ‘Maximum possible term’ (duration) may not be required in few cases.
        5 – If monthly expenses are more, contributions to emergency fund should be more right? what is your opinion?

  • Hello Sreekanth,

    Very informative blog and helpful, especially to a newbie like me.
    What platform would be best for investing in ELSS in sip mode.
    I have hdfc bank account through will MF is an optional choice or should I consider websites like fundsindia.com?

    One more query, your reply to Jagadeesan on 27th Feb you suggested “If your goal is 5 to 7 years from now, I suggest you not to opt for ELSS funds.” Why not to opt for ELSS?

    Many Thanks,
    Abhinay.

  • Hi Sir ,

    Thanks for helping out many people with your tips and it is really great.

    I am 26 , I have 0 dependency. I am planning to invest 1lakh 50 thousand in different tax saving scheme. I have a medical insurance of worth 15k per year. I don’t have any life cover. My goal in next five to seven year is to buy an Audi car.

    I have found ELSS is a good option but what would you suggest , investing in lump sum or SIP
    Is FD good option to invest some amount ?

    Please suggest your ideas.

    Thanks,
    jagadeesh

    • Dear Jagadeesan,
      Thank you for your appreciation.
      If your goal is 5 to 7 years from now, I suggest you not to opt for ELSS funds.
      May be you can invest in a good balanced fund (SIP/Lump sum) for next 3/4 years and move to safe investment options.
      You may also consider investing a portion of your monies in 5 year Tax saving FD (if you want to save taxes, protect capital and accumulate the fund for your goal).

      Regarding Medical insurance, What is the total cover you have? (Be aware of Sum assured as well.. im sure you are..)

      • Sir ,

        Here is mu question to your reply.

        May be you can invest in a good balanced fund (SIP/Lump sum) for next 3/4 years and move to safe investment options.

        Balanced fund that you are suggesting will it come under tax cover. Can you suggest one if it comes under tax saver. I am planning to invest lump sum if it is worth.

        For this financial year(2014 to 2015) i have not chosen any tax saving scheme.

        As you suggested I am planning to invest 70k in HDFC FD

        Please suggest other option (80k remaining out of 1.5 lakh) that I can opt for tax saving.

        Thanks again for helping folks like us with good ideas.

        -Jagadeesan

        • Dear Jagadeesan,
          Investments in Balanced funds do not have any tax deductions.
          You can invest in Franklin Tax shield ELSS fund and stay invested for 4 years or so. (Understand the risks associated with ELSS funds).
          After that, redeem the units and move to a short term Fixed deposit. (understand the tax implications).

  • Dear Sir,
    My wife & Me both are working…. For us to get 80C tax savings…… We need to invest another 1.5 laks…… Which is the best way among the 80C tax savings options available….
    Mainly among these 2……1.shall we Pre-pay home loan partially around 1 -1.5 laks our home loan principle amount(48 Lakhs) to get the benifit under 80C or 2. Invest the same amount around 1 -1.5 laks in ELSS (i.e 50K in each of top 3 lie Axis/ICIC/Franklin india)……. Which is the best option for the term period around 3- 5 years……..

    Thanks

    Baburao Bussari

    • Dear Baburao,
      Kindly let me know about your other financial goals. Do you have any dependents? Is your Retirement Plan in place?
      If your investment horizon is less than 5 years, suggest you not to invest in ELSS schemes.

      • Dear Sir,

        Thanks for the early replay….. I am Babu, Male, 35 yrs old working in Biotech company with CTC 15 lacs , My wife is Dentist, 34 yrs, working as reader at Dental College & practicing Dentistry annual income 10-12 lacs….. We have son 4yrs old and also now she is carrying …… Mainly we have 49 lakhs Home loan from HDFC…..EMI around 47K….. for it Interest paid during this financial year was around 5 lacs but only principle amount paid was around 32K…… and also we have booked another Flat of 73 lacs which is under pre-launching stage , it will be started in early 2016 and will be positioned in late 2018 or 2019……

        Till now no retirement plan is in place only for me around 90K pf will be deducted in my salary….. We have around 50K annual Premium for LIC policies and around 35K-40K Tuition fee for my Child……I knew, We need to plan for Term Insurance and retirement plan and children education etc…..

        But for the time being for this financial year 2014-2015…. we need to invest around 1.5 lacs more to get 80C deductions …. and also by the time of my 2nd home position say around late 2018/2019 I may need this Money (If I investing) or else if I pre-pay my first home loan principle I may be eligible to get second home loan more.

        Hence the question is Which is the best way among the 80C tax savings options available….

        Mainly among these 2……1.shall we Pre-pay home loan partially around 1.5 laks from our first home loan principle amount(49 Lakhs) to get the benefit under 80C or 2. Invest the same amount around 1.5 laks in ELSS (i.e 50K in each of top 3 i.e Axis/ICICI/Franklin india)……. Which is the best option for the term period around 3- 5 years…….. If I required the money after 3 yrs I Can redeem this ELSS…. Hence I think ELSS will be best option ….What do u say Sir?

        Thanks

        Baburao

        • Dear Baburao,
          What is the rate of interest on your home loan? You can buy a Term insurance plan online right now and can easily get the policy in Mar.
          I have received your email and let’s continue the chat via emails.

        • Dear baburao,

          Sree is right, you are talking about large sums here and you need personal Financial planner. By God’s grace you are in good financial health and if managed well, your kids will have a good life.

  • Dear Sir,
    Thank you very much for your immediate reply.
    Let me show my investment plan

    I. Axis Long term Equity fund 40k
    Franklin Tax shield 50k
    ICICI Prudential Tax plan funds 50k

    or
    II. Franklin Tax shield 70k
    ICICI Prudential Tax plan funds 70k

    Which portfolio you suggest I or II

    One of my colleague says the fund management of HDFC tax saving is much better than these.Should I incorporate the HDFC in my portfolio

    Thank you

    • Dear Jyothi,
      You can choose Franklin & ICICI combo. Actually the top 5 elss funds listed in my post r all good ones.
      Kindly understand risks associated with ELSS funds b4 investing. Im sure u must b aware.

  • Hi Sir,

    I am planning to invest 35000 as lumpsum for 3 yr period.. Please advice which ELSS to choose.

    Also, I noticed that you suggest “Franklin India Tax shield / ICICI Pru Tax plan” for many even when the returns are highest with Axis ELSS.. May I know why..

    Thanks,
    Romauld.

    • Dear Romauld,
      Axis Long Term Equity Fund is a good fund. You can opt for it. Infact, you can choose any 2 funds out of the to 5 from the above list.
      I prefer Franklin / ICICI ELSS funds, because we have more data (Returns) to analyze their performance and consistency. Both the funds were launched in 1999.

  • Dear Sir,
    I wish to invest 1,40,000 in ELSS inorder to save tax.As this is a lump sum investment, which one you suggest and for the nest year in which all ELSS I have to start an SIP

  • Dear Sir,
    Inorder to save tax, i wish to invest 1,40,000 in ELSS .Which Elss you suggest as this is not an SIP.Next year how i have to make the SIP in which all funds.Awaiting you reply.

  • hello sir,
    I am Dr.Karthick. i would like to invest in ELSS for 100000 for me and 75000 for my wife within this march 2015. kindly guide me the ELSS MF and the amount also if u can.. i will be very happy for your reply. thank u.

    • Dear Karthick,
      You can consider investing in Frarnklin India Tax shield and ICICI Prudential Tax Plan. You can invest in them in the ratio of 50:50. Since you are making lump sum investments, do not get worried even if the returns are negative in short term. Stay invested for long term and you may start planning for your taxes from the month of April itself.

  • Hi sree,I am 32 married and have two kids, investing 10000 monthly sip to reliance tax saver(eLSS)..so in a year total investment is 120,000 from this investment I am saving tax up to 30,000 from the actual tax ,(25% returns p.a)this additional 30,000 I am investing in Hdfc balance fund by sip is my plan is okay for long term goal…please suggest.

    • Dear Saikumar,
      Reliance Tax saver has been preforming well. But do note that the volatility in its performance his high. Less volatile ELSS funds, based on past 10 or more years performance, are Franklin India Taxshield or ICICI Prudential Tax Plan – Regular Plan.

      HDFC Balanced Fund is a good fund. You can surely consider investing in this fund. Read my article on “Top performing Balanced funds” for more info.

  • Hello shree,
    Thanks for all the information you are providing.
    I would like to invest in elss, where in I can get tax benefit.
    Can you please guide me, which elss is the best one for a period of 5 to 10 years.
    Regards,
    Ria

    • Dear Ria,
      If your investment time frame is around 10 years, consider investing in Franklin India Tax shield ELSS fund. (Hope you are aware that ELSS funds have a lock-in period of 3 years and are high risk products)

  • Hi Sreekanth,

    Thanks a lot for the details. It surely help lot of us 🙂

    One query which I have after reading the article and comments.
    You are mentioning that “Kindly remember that the units allotted under each SIP will have lock-in period of 3 years” what exactly does this mean? Can you please elaborate it a bit … an example will be best here?

    • Dear Rushabh,
      For example – You start a monthly Rs 1000 SIP in ELSS from March 2015. In March 2015, when your SIP gets executed, few ELSS MF units are allotted (based on Net Asset Value) to you. These units will be locked for 3 years – till Feb 2018. Till then, you can not redeem these units.
      So, whenever your monthly SIPs are executed, those units have a lock-in period of 3 years.

      Some investors try to redeem all units in March 2018 (after 3 years of first SIP), but all the units can not be redeemed. SIPs in ELSS funds can be cumbersome for some investors.

  • Hi Mr. Sreekanth,

    Its Good that you are helping people in their financial planning.

    I am 40 yrs. I started invested in SIPs in 2010. Please suggest if any changes are required. Currently i am investing 15K per month in which 6k is ELSS.

    Axis Long Term Equity Fund-Gr 2000/p.m.
    HDFC Tax Saver Gr 2000/p.m. Nearing 5 year term
    Icici Pr Tax Plan Gr 2000/p.m Nearing 5 year Term
    Reliance Tax Saver Gr 2000/p.m.
    BSL Infra Fund Gr 2000/p.m.
    DSP Blackrock Small&MidCap Gr 1000/p.m.
    Principal Emerging Bluechip Gr 2000/p.m.
    Sundaram Select Midcap Gr 2000/p.m.

    Please advise.
    Thanks
    Brijinder.

    • Dear Brijinder,
      Thank you for your kind words.
      You need to seriously rework on your MF portfolio.
      Why do you want to invest in so many ELSS funds? (Also, kindly note that units allotted under each SIP contribution will have a lock-in period of 3 years. It might be bit confusing and you may not redeem all the units at one shot).
      Suggest you to continue with Axis/ICICI ELSS funds.
      Start new SIPs in good Equity Diversified/Large-cap/Balanced funds. Kindly read my article on “Best Equity Mutual Funds.”

  • Hi Sreekanth,

    I would like to invest around 60000 Rs per year in Mutual funds. Can you advice where should I Invest ?
    I consider going for ELSS funds.
    Also I have 3 LIC policies created by my parents.
    1. Endowment plan maturing in 2018 premium 6500
    2. New Janraksha plan for 25 years taken in 2013 premium 15000
    3. new janraksha plan for 21 years taken in 2008 premium 11540

    I am of the opinion atleast 2 of the above policies are not worth the investment.
    Can you advice what can I Do?

    • Dear Deep,
      You can consider investing in ELSS funds and claim tax deductions under Section 80c. ELSS funds have a lock-in period of 3 years. You need to stay invested for very long term to get very good returns. Consider investing in “Franklin Taxshield” fund.

      Existing Insurance Plans:
      1 – Continue this plan as the policy maturity date is in 2018
      2 – Pay 3 years premium and consider surrendering it
      3- You may consider to make it a paid-up policy (discontinue it).
      Kindly read my article on ‘how to get rid off bad insurance?’

  • Hi Sreekanth, Thank you for your inputs on the ELSS schemes. I am 28years old and planning to get a Term Plan (Life Insurance) and Health Insurance. Please can you let me know, a) what factors are to be considered before getting into any Term Plan and Health Ins plan, b) Which company plans are better to be taken up ( LIC, SBI Life etc) and c) Is Online Term plan is better than the traditional plans.

    Appreciate your response.

    • Dear Sivaram,
      Are you married? Do you have dependents?
      In Insurance parlance, Traditional plans are money-back/wholelife/endowment plans. I think you are referring to online term plans vs offline term plans, am I right?
      Visit and read my post on ‘Comparison of best online term insurance palns.”
      You can consider these term plans – LIC’s e-Term plan, Kotak e-preferredplan, HDFC Life Click 2 Protect plan (Read my REVIEW). Opt for a plan which is affordable and meets your requirements.
      Are you employed? Do you have employer’s Mediclaim coverage?

  • Hi Sreekanth, thanks for the informative article above. As of now, for tax saving purpose I have taken 1 LIC policy in 2011 with annual premium of Rs 18K and the rest EPF. I want to invest another 50-60 K Rs per year in various schemes under ELSS can you please suggest me 2-3 funds keeping in mind 5-10 year lock in period. And since march is near is there any way I can invest that much amount in 1-2 months??

    • Dear Suhel,
      Suggest you to invest 60 k in 2/3 installments in the next two months in ELSS funds. You can consider investing in Franklin India Tax shield / ICICI Pru Tax plan.
      ELSS funds will have 3 year lock-in period. From next financial year (April 2015) onwards, start your tax planning and do it systematically from the month of April itself.
      What is the name of your LIC Plan? Do you have Term insurance?

      • the policy name is The Endowment Assurance policy (14). The sum assured is Rs 5,00,000 in 25 years. I have one doubt it is showing vested bonus as 72,000 is it the bonus i have earned in past 4 years??

          • Yeah I have checked again the vested bonus is 72,000, then I think its good return considering that I have paid premium of 18,100 4 times only.

            What is the general return we get under this policy any idea??

            And do all the policy gets converted into Paid up policy??

  • Hi Sreekanth,

    First of all I want to thank you for your efforts in maintaining this wonderful blog.

    I am 32yr old and right now I have upto 1 lakh of savings under sec. 80C (LIC, HDFC unit link, 5yr FD) in this FY:2014-15. Remaining 50k I have to invest before this March. Initially I want to go for a 5yr FD, but recently after get to know more about the ELSS now, remaining 50k I am planning to invest in ELSS particularly in Axis Long Term Equity Fund(G).

    1) Now I want to know whether it is advisable to pay 50k lump sum this FY (before March) and April onwards shall I will go ahead with SIP mode?

    2) In the worst-case scenario, whether my amount invested is safe or do I get back the invested amount irrespective of returns in ELSS?

    I will be grateful for any help you can provide.

    • Dear Nitin,
      Thank you for your appreciation.
      You can go ahead and invest 50k in 2/3 installments in Feb & Mar, in Axis Long Term Equity Fund. But stay invested in the fund for very long term.
      Start SIP with the same fund from April onwards..
      Please understand that Mutual funds are subject to various risks. You may get negative returns too. But if you invest for long term (may be more than 10 years), you may get good positive returns.
      Also, have a re-look at your existing investments under Section 80c. Can you mention the names of LIC & HDFC plans?

  • Thanks for your info about top 5 ELSS Sreekanth! I would like to invest 50,000 rupees in ELSS for tax saving purpose and can have it for a lock in period of 5 years. As this is already January, is SIP possible for this year? Also do i need to go for SIP or Lump sum next year onwards to be safer and get good returns?
    Also please suggest me which ELSS i can opt for this year with the investment plan of 50K and lock in for 5 yeas.
    Thanks in advance!

    • Dear Edwin,
      SIPs are possible anytime. If you are not comfortable investing lump sum amount, invest it over a period of next 3 months (jan/feb/mar).
      From next financial year onwards, you can invest in ELSS funds periodically or through SIPs.
      ELSS funds have a lock-in period of 3 years. Remember that units allotted under each SIP will have a lock-in period of 3 years.
      You can consider Franklin Taxshield or ICICI Pru tax plan.

  • Hello Sreekanth,
    I would like to invest in mutual funds in SIP mode with 10k per month and would like to stay invested for 10 years. I was thinking of investing in 5 different ELSS funds with few low risk and few average risk funds. Pls suggest which ones are good.

    • Dear Venkat,
      You can pick one or max two ELSS funds. Too much diversification is not good. You can consider Franklin Taxshield and ICICI Pru Tax plan. Kindly remember that the units allotted under each SIP will have lock-in period of 3 years.

  • Hello sir, I am a student . I am interest in knowing which funds should be best for sip purposes for a shorter period 2-3 years?

    • Dear Akshay,
      Nice to know that at a very young age you are trying to invest in mutual funds. Suggest you to understand the basics of mutual funds before venturing into them. It is better to avoid equity mutual funds if your investment period is 2/3 years. (Do you need money after 3 years?) If you want to learn by doing (investing) then suggest you to start with a minimum amount SIP in a balanced mutual fund. (Remember balanced funds also do have high risk profile).

  • Nice info Sree. I think investing in MF via SIP is one of the best investment technique one should follow. But to get real benefit the investment horizon should be more than 12-15 years. We can expect a real awesome return.

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