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Lock-in In ELSS Funds

While investing in tax-saving equity funds, remember that they come with a three-year lock-in period…

I want to invest in mutual funds which can give me tax benefits and a good return. Please suggest which funds I should invest in. I want a return of Rs 10-15 lakh in the next ten years?- Abha

Tax Planning funds offer tax benefits on investments under Section 80C up to Rs 1 lakh invested each financial year and you could consider investing in Fidelity Tax Advantage or Canara Robeco Equity Tax Saver, which are both highly rated funds in this category with a proven track record and performance history. Remember, investments in these funds have a three-year lock-in. A gain of Rs 10-15 lakh on investments in ten years will depend on how much you invest and in what kind of funds you invest in. For instance, Rs 6,000 SIP (Rs 7.2 lakh over ten years) in a fund earning an annualized 12 per cent will accumulate Rs 12.39 lakh or Rs 16.7 lakh if it earns 15 per cent returns. You should invest in a diverse portfolio of large-, large- and mid-cap and mid- and small-cap funds to achieve your financial goal. You should track the performance of your investments regularly and assess its progress towards your financial goals.



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