How Volatile it can be to invest in ELSS Funds through Lumpsum Quarterly.??
Kindly Get me an Appropriate Response.
Hey @maxonix_max!
Although ELSS funds have the highest potential to generate returns when compared with other tax-saving products, these returns come with an element of risk. This is because ELSS Mutual Funds are a type of Equity Mutual Funds. This means that they invest in the stock markets and your investments are exposed to market risk.
This also implies that they don’t guarantee any returns and one could even make a loss by investing in them. Also please note that each SIP instalment or lumpsum will have its own lock-in of 3 years from its date of investment
For eg, if you made a lumpsum investment of Rs 20,000 on 15th Feb 2022 and you have a running SIP of Rs 10,000 for the 20th of every month starting Feb in Tax Saver Mutual Funds then -
a) The lumpsum investment of Rs 20,000 will become lock-in free on 15th Feb 2025.
b) For the SIP - each month’s instalment is treated as a separate investment. So the 20th Feb 2022 SIP instalment will become lock-in free on 20th Feb 2025. The 20th March 2022 SIP instalment will become lock-in free on 20th March 2025 and so on.
Here are also a few blogs on ELSS funds that you may find useful:
Regards,
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