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Why Lock Money?`

Can I invest in ELSS even if tax benefits are not a consideration? I feel that some such schemes are tried and tested and hence more reliable than an entirely new fund.-SP Gupta

The time horizon of my investment is between three to four years and I have a moderate risk appetite. I intend investing this money for wealth creation. As such I have exhausted the benefits accruable under Section 80C for the Rs 1 lakh. I want to know whether I can invest in ELSS schemes even if tax benefits are not a consideration. I personally feel that some such schemes are tried and tested and hence more reliable than an entirely new fund.
-SP Gupta

You can surely invest in an ELSS even after exhausting your Rs 1 lakh exemption under Section 80C. And it is also true that there are some ELSS funds that have produced returns far in excess of some of their other diversified equity counterparts. Having said that, the matter of a three-year lock-in still remains.

Given that today's investor is spoilt for choice in the diversified equity category; you need not risk your money by locking it in for three years. This is because many things can happen in a span of three years. The fund manager can change, there could be an impending recession in the economy or you could simply hold a bearish view of the market and would want to cut your losses short. Taking these factors into consideration one can always benefit from the flexibility of redeeming funds at your own convenience.

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