1. Higher Returns: ELSS funds have the potential to generate high returns in the long term as they are market-linked instruments. The returns generated by these funds are better than what you can get from fixed-income investments like FDs.
2. Tax Benefits: Investing in ELSS funds help you reduce your tax liability substantially. You can invest up to Rs. 1.5 lakhs in ELSS funds and avail deductions upto Rs. 1.5 lakhs under Section 80C of the Income Tax Act.
3. SIP Enabled: ELSS funds offer the facility of Systematic Investment Plan (SIP). In SIP, you invest a small sum of money at regular intervals and get exposure to the market with ease. This facility makes ELSS funds a worthwhile investment option.
4. Low Cost: ELSS funds come with very low expenses. This helps in maximising the potential returns and compounding with time. The expense ratio of some ELSS funds can even go as low as 0.4-0.5 %.
5. Diversification: ELSS funds invest in both large-cap and mid-cap stocks. This helps in diversifying the portfolio and reduces the risk associated with investments.
In conclusion, ELSS funds offer some great features like higher returns, tax benefits, low charges and diversified portfolio. With proper planning and an inclination to take some risk, you can make good returns from ELSS funds in the long term.
Article Created by A.I.