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Should I redeem my investment in a tax-saving fund once the lock-in period is over?

Dhirendra Kumar sheds light on what one should do with one's investments in a tax-saving fund after the lock-in period

I invested in the dividend plan of a tax-saving fund a few years back. It has completed the mandatory lock-in period of three years. What should I do with that investment now?
- Rohit

It depends. If you need the money, take the money out. But equity investments are long-term investments. Also, you should have not chosen the dividend plan. You would have got some smaller dividend over a period of time and it would have just been spent. You may not have done something meaningful out of it. Just compare your investment if you would have done it and not chosen to take the dividend periodically, how much the investment would have been now. You will get to know the difference.

Choosing to get out of this investment or not entirely depends on your decision whether it is a good investment. If this tax-saving fund remains a good tax-saving fund, stay invested.

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