In this article we cover
1) What are the Best ELSS Mutual Funds in India 2021?
2) Best ELSS Mutual Funds in India to invest in 2021
3) Who Should Invest in the Best ELSS Mutual Funds?
4) Points to Consider Before Investing in Best ELSS Mutual Funds
What are the Best ELSS Mutual Funds in India 2021?
ELSS mutual funds stand at the apex when it comes to the best tax saving option. There are many advantages that it offers that makes it stand out from the other tax saving options. Here we shall list the best ELSS mutual funds in India.
ELSS mutual funds as per the Section 80C of the Income Tax (IT) Act, 1961, investors can invest up to ₹1.5 lakhs in ELSS mutual funds and claim tax savings of ₹46,800/-
ELSS mutual funds invest around 80% of the investible corpus in equity mutual fundsEquity Mutual Funds
Mutual Funds are a type of financial investment vehicle that pool together funds from multiple investors. There are many different types of mutual funds based on the securities that they invest in.
Read More. Equity schemes invest in shares of different companies and hence have high returns potential.
ELSS mutual funds provide the dual benefit of high returns and tax saving to the investors. It comes with the shortest lock-in of 3 years as compared to other tax saving options.
ELSS mutual funds have greater capability of generating high returns than other tax saving investment types due to its huge exposure to equity markets. Also, with expert management (fund managers) one can efficiently create good fortune in the long term.
Best ELSS Mutual Funds in India to Invest in 2021
|Schemes||MF Rating||Strength||1 Yr||3 Yr||5 Yr|
|Axis Long Term Equity Fund Regular Growth||21.02%||12.80%||14.13%|
|Canara Robeco Equity Tax Saver Fund Regular Growth||27.97%||13.55%||13.77%|
|Aditya Birla Sun Life Tax Relief 96-Growth||15.56%||5.00%||11.17%|
* The above ranking is as on 4th January 2021. To check the latest data and ranking of all mutual funds click here.
Note: The right time to invest in these right funds is also important so that you avoid buying overvalued funds. For more details, visit RankMF.com
Not only the right funds, but the right time to invest in ELSS mutual funds is also equally important, though it is often neglected by investors. Mutual Funds can be undervalued or overvalued. If investors buy overvalued funds, then their returns may not be optimal.
To tackle this, investors can invest in SmartSIP. A SmartSIP is an advanced option to SIP and invests smartly depending on the market volatility. Here’s what SmartSIP does:
- Invests regularly when markets are fairly valued
- Invests double when markets are undervalued
- Skips investing & partially sells to book profit when markets are overvalued
Get detailed information on how SmartSIP works and how it is an advanced investment option to SIP and lump sum.
Who Should Invest in the Best ELSS Mutual Funds?
- Long term investment period: Investors with a long term investment period should invest in ELSS mutual funds because they can yield superior returns in the long term.
- Investor looking for high returns: High returns is the essence of ELSS mutual funds. Investors who actively want to take risk for high returns should allocate money in ELSS mutual funds.
- Investors looking for tax saving instruments: This goes without saying, investors who want to invest in order to save tax can invest in ELSS mutual funds.
- Investors looking for dual benefit: Investors who want to save tax and grow a huge corpus can invest in ELSS mutual funds since it offers both of these benefits.
- Market-savvy investors: Investors who have a good knowledge about markets and are well-acquainted with the market trends can definitely invest in ELSS mutual funds.
Points to Consider Before Investing in Best ELSS Mutual Funds
There are a few points that investors need to keep in mind before investing in the best equity mutual funds. These points are:
- ELSS Fund Objective: Make sure your financial goal is in line with the fund objective. If your main objective is to save tax and create a good corpus in the long term then ELSS mutual funds can be the best option for you.
- ELSS Fund Risk Factor: Assess your risk taking level with the risk level of the fund. ELSS mutual funds carry high risk and hence investors are advised to evaluate the fund precisely before investing in it.
- Investment Period: ELSS mutual funds are ideal for long term. Investors who have a short term investment period should not invest in ELSS mutual funds since they have a lock-in period of 3 years and are highly exposed to market volatility.
Open a free mutual fund investment account with India’s best mutual fund distribution platform & get started with your investment in ELSS mutual funds today.
The author is a Certified Financial Planner (CFP) with 5 years experience in Investment Advisory and Financial Planning. Her strength lies in simplifying complex financial concepts with real life stories and analogies. Her goal is to make common retail investors financially smart and independent., RankMF | Last Update 30 March 2021