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Summary: ELSS mutual funds come with a mandatory three-year lock-in period, and early withdrawal is simply not possible. The redemption process differs slightly, depending on whether you invested in them via lumpsums or SIPs.
Can I redeem my ELSS mutual fund holdings prematurely during the lock-in period? What is the procedure? What is the downside? – Vivek Sheth
No, you cannot redeem your ELSS investment before the mandatory three-year lock-in period, and unlike some other instruments, you cannot take a loan against these units either.
ELSS (equity-linked savings scheme) funds, also known as tax saver funds, count the lock-in from the date of unit allocation. Here's how redemption works in practice.
For lumpsum investments
Lumpsum investments are straightforward. All units are allotted on the same day, so they become redeemable together once three years are up. For example, a lump sum invested on January 1, 2026, can be fully redeemed from January 1, 2029.
For SIP investments
SIP investments are trickier. Each monthly instalment is treated as a separate investment with its own three-year lock-in. An instalment made on January 1, 2026, unlocks on January 1, 2029, while one made on April 1, 2026, only unlocks on April 1, 2029, and so on for every instalment in the series.
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This article was originally published on January 19, 2023, and last updated on May 29, 2026.
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