TomorrowMakers ™

Financial Planning

ELSS Part II: which schemes should you invest in?

17 March 2016
ELSS is one of the best investment options especially for young families to meet the twin goals of tax benefit and long term wealth creation. Here’s how to monitor and manage it
 

Which ELSS schemes should you consider?

When you select an ELSS scheme, check the performance record of the scheme and also the pedigree of the Asset Management Company (AMC) which manages the scheme. One can find detailed information about ELSS schemes on portals such as Value Research and Morningstar. Below is a table listing some of the top rated ELSS schemes as per Value research as on March 08, 2016:

However, rather than investing blindly as per the suggestions on these online portals, you should treat these only as a starting point for your own research. Also remember the cardinal rule that past performance may not be sustained in future. If you are investing a considerable amount in an ELSS scheme (say Rs. 1 lakh), it is advisable to split it between atleast two schemes to reduce the fund manager risk.

Related: Equity Linked Savings Schemes: High returns tax savings

How to invest & make the most out of your ELSS

Once you have shortlisted the scheme(s) in which you wish to invest, you need to complete your Know Your Customer (KYC) verification. As per a recent update by the regulatory body SEBI, if you have an Aadhar number, you can even invest upto Rs. 50,000 without undergoing KYC verification. For doing KYC, you can visit the investor service centre of the AMC and along with the application for the scheme, you can fill up the KYC form as well and submit it over the counter. If you are already KYC compliant, you can invest online from the comfort of your home/office on the website of the AMC.

If you are investing without the help of an agent, do consider opting for the “direct plan” as it will give you marginally better returns as compared to regular plan, given the lower expenses in such plans. Instead of choosing the “dividend” option, you can also go for the “growth” option.

After the 3-year lock in period is over, it is best not be in a rush to withdraw the money, since the equity markets are volatile in the short term. However, by having a minimum 10-year horizon, you can do well to stay put in the scheme and reap good returns in the long term.

Related: How and why to monitor your ULIPs after purchase

ELSS is one of the best investment options especially for young families to meet the twin goals of tax benefit and long term wealth creation. A small one-time effort for KYC and the right scheme selection can yield good rewards in terms of good long term returns.

 
 
 

Market Quotes by TradingView

Tax Singh

"Tax Fact 6"

POLL

 

MOST VIEWED CONTENT

5 situations where you should never use a credit card
Financial Planning

5 situations where you should never use a credit card

While credit cards come with a host of benefits, they must be used carefully, and never in these situations!

With GST ready to roll out this July, what does it mean for you?
Financial Planning

With GST ready to roll out this July, what does it mean for you?

Don’t know how the GST roll out, scheduled for this July, will affect you? Read on to find out.

All about IPOs in India
Financial Planning

All about IPOs in India

Investing in IPOs can bring financial success in the future. But before doing so, here are some things you should know.

Unconventional Mother’s Day gifts for your mother
Financial Planning

Unconventional Mother’s Day gifts for your mother

This Mother's Day, forget the usual flowers and cakes, and go with something unconventional, but more long lasting.

The origin-story of India's richest families
Financial Planning

The origin-story of India's richest families

Here are some of India’s richest and most famous families, and stories of their success.

Where do Indians Invest Today? [Infographic]
Financial Planning

Where do Indians Invest Today? [Infographic]

What are the most popular investment options among Indians? Find out now.

Gold, Platinum, Silver: How precious are these metals? [Infographic]
Financial Planning

Gold, Platinum, Silver: How precious are these metals? [Infographic]

Still unsure about which precious metal you want to invest in? Here's what you should know.

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

NEWSLETTER