Every investor looking for a tax-saving investment option prioritises ELSS (Equity Linked Savings Scheme) mutual funds. It is a dominant category in the market with multiple benefits. ELSS mutual funds have a lock-in period of three years. Although the volatility and risks involved in this investment scheme are pretty high as compared to other mutual funds, it is subject to high returns. An investor can make a fortune from these investments if he chooses the right platform. So, let us have brief learning of the ELSS investment procedure.
Investing In ELSS Mutual Funds: Step-By-Step Guide
Beginners need to figure out a few prior steps that can help them make an informed decision. Let us know more on ELSS funds here and go through a quick guide to investing in mutual funds.
1. Find A Reliable Platform
Keeping first things first, one should choose a reliable online platform to explore all investment options available in the market. Leading online brokers offer a brief evaluation of every ELSS fund. Investors can use their wisdom to analyse all the funds to figure out the best one!
2. Analyse Top Investment Options
If one chooses a competent online platform, he can get the list of top-performing ELSS mutual funds. This procedure of filtering potential investment opportunities that save taxes is beneficial. Investors should go through the alternatives that serve the best!
3. Choose Between Regular & Tax-Saving Options
Most ELSS funds are available in two different variants. The first one is the regular ELSS fund, and the other is the tax-saving option. The NAVs (Net Asset Value) of both these plans differ from one another. Investors should go for the direct plan to make the most of his money spent.
4. Link A Bank Account
The dividends of ELSS mutual funds are credited to a certain bank account that investors need to link with the investment account. An investor can keep this account exclusively for ELSS investments. This step becomes important when one does not have a dedicated savings account.
5. Select An Intermediary
There is no end to the list of mutual fund distributors and brokers available on both online and offline platforms. Although direct dealings with a firm are possible for starting ELSS investments, one must take the help and assistance of a verified intermediary.
6. Consult A Distributor
An investor needs to consult a professional mutual fund distributor whose work will benefit him. The profession of these distributors entails them guiding and helping the budding investors who are yet to learn the tricks of the trade! An online distributor is the best choice in this case!
Suggestions To Make A Profitable ELSS Investment
ELSS mutual funds require one to have some basic knowledge about the market condition. Since 80% of the ELSS funds are largely invested in stocks, the volatility rate is quite high. Nonetheless, one can make safe investments by following these few simple tips.
- Explore ways of utilising ELSS funds by combining them with PPF accounts to safeguard their money from market risks.
- Use a secure online platform to make the most of their investments by saving taxes using ELSS funds.
- Do not make rash decisions and invest without analysing the background of the ELSS mutual fund and its manager.
- Always remember the role of professional fund managers in bringing high returns from the investment. One should analyse the profile of the fund manager as well.
ELSS funds serve high returns and a wide range of investment possibilities if one chooses the right option. Go through the best online platforms to explore all the available investments alternatives available in the market.