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ELSS Investments

In tax-saving funds, each SIP is considered as a fresh investment with its own lock-in period…

I have opted for an SIP in a tax saving Mutual fund with a monthly frequency. Since the tax saving funds has a lock-in period of 3 years, will I be able to liquidate the total amount invested over the period of 3 years together in one shot?

Investing through SIPs is a disciplined approach to investing. However, it can be tricky when investing in tax saving funds. When investing in these funds, each SIP is treated as a fresh investment in the fund and each instalment in a tax saving fund needs to complete three years of holding, which is the compulsory lock-in period.

So, if you have been investing through SIPs in a fund since Jan 2010, it does not mean that your lock-in period will get over in Jan 2013 and you can withdraw your total investment. Yes, the first SIP will complete its lock-in period in Jan 2013 but the units bought later can be redeemed only when each of them complete their three-year lock-in.

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