Introduction

ELSS stands for Equity Linked Saving Schemes and is known for its tax-saving benefits. These funds are a part of equity mutual fund services. ELSS funds offer dual benefits since they help you gain capital appreciation as well as save your taxes. These funds include a lock-in period of a minimum of three years. According to section 80C of the Income Tax Act, the investor becomes eligible to claim tax deductions for up to Rs. 1.5 lakh annually. If you want to invest in ELSS funds, you must know about SIP as well since you need to make a choice if you want to invest using SIP or lump sum amount.

How to invest in ELSS?

There is a range of ways in which you can invest in ELSS funds in India. Following is the list of some of the ways-

• Direct investment- You can invest directly into the ELSS funds by visiting the mutual fund website. There will be two options to invest, you can either invest by creating a user account and can choose to invest without creating the same. However, it is advised to create an account as it helps in managing the investments. You will need to fill in the required details and FATCA form followed by a KYC procedure using Aadhar. After these processes, you will be able to transfer the money online.
• Online mutual fund investment- Online mutual fund investment platforms are the best way to invest as it allows you to have a thorough record of every transaction and you also get valuable reports along with customer support from a single account. All of this is provided at zero cost. In order to invest through this method, you need to create an account with a particular website and choose a tax savings plan. You also need to choose your payment type from the available options of a lump sum or SIP amount. If you want to know how much return you will earn on your SIP investment, you can use the SIP calculator. Fill in the details and then you can transfer the money.
• Demat account- You need to open a Demat account for investing via this method. Log in to your Demat account and then invest using the suitable option.
• Through agents- This is the traditional method of investment. You need to be a bit careful with this method and make sure that your agent does not take any decision solely. In this method, you need to find a trusted local mutual fund distributor and hand over every required document along with the application form. You also need to give your agents cancelled bank cheques.

Conclusion

It is essential to evaluate a mutual fund scheme before you decide to invest in it. There is no chance that a fund that has performed well for your friend will perform for you again. You need to choose the right option of the scheme only after you are confirmed about the same. It can be done based on its past performance, expense ratio, standard deviation, taxation, fund history, etc. Equity funds are a great way to earn money by making sure that you start investing and earn returns.