Best ELSS Tax Saving Mutual funds to invest in 2018 – Top Performing

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Equity Linked Savings Scheme (ELSS) Mutual Funds are one of the popular 80C tax saving options for savvy investors.

Quick Overview of ELSS Funds

  • ELSS is a diversified equity mutual fund which has a majority of the corpus invested in equities.
  • There is a lock in period of 3 years from the date of investment. You can remain invested even after 3 years and can withdraw anytime after that lockin.
  • Returns are based on returns from Equity Markets.  Returns from ELSS Schemes are tax free. Based on previous returns, some of the funds has grown 3 times in 5 years.
  • There is no limit of investment in ELSS Funds, but you can claim Tax deduction upto Rs 1.50 Lakh under Section 80C of Income Tax Act.

It is always better to invest

  • via SIP mode rather than lumpsum (for cost averaging)
  • in GROWTH Option  (for wealth accumulation)
  • in DIRECT Plan ( to save costs & higher returns)

Read – Other Tax Saving Options u/s 80C

 

Top performing ELSS Mutual Funds – which you can consider investing in 2018

  Annualised Return
  1 Yr 3 Yr 5 Yr 10 Yr
ELSS tax Saving Funds CAGR %   returns
         
Invesco India Tax Plan 17.86% 13.94% 21.4% 16.26%
Reliance Tax Saver ELSS -1% 8.71% 20.52% 15.3%
Axis Long Term Equity 19.50% 15.54% 25.61%
AB Sunlife Tax Plan 18.18% 16.46% 23.38%
Motilal Oswal Long Term Equity 12.87% 21.3%
Principal Tax Savings 10.95% 16.97% 22.2%
BOI AXA Tax Advantage Fund 21.8% 16.73% 21.59%
         
Wealth18.com  updated on 17 June 2018        

 

Please note that above returns are annualised returns / CAGR.  For clarification,

  • mutual fund investment will double in 5 years, if its CAGR return is 15%.
  • mutual fund investment will become 3 times in 5 years, if its CAGR return is 24.5%.

Also read – Best Equity Funds (Large, Midcap fund, Diversified) to invest in 2018

Read – From 1st Feb 2017, New Central KYC process must for new Mutual Fund Investors.

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If you have any queries related to ELSS Funds, or any other personal finance, feel free to use the comment box below.

4 Replies to “Best ELSS Tax Saving Mutual funds to invest in 2018 – Top Performing”

  1. Dear Sir,

    In the present volatile market fluctuations, this years best performing fund may not be that much performing in the next fy. Hence, it is unpredictable to say about the present years annual yield is more, the same cant be continued for next 2 to 3 years in that particular ELSS scheme of any AMC. In this circumstances, how can we assess the guaranteed return at high value of a particular ELSS fund for the ensuing 3 years….

    Regards…

    KVRao
    Hyderabad.

    1. Hi, There is no guaranteed returns in Equity funds. You are right that the funds may not give same returns year after year, but over long term the Equities funds have given good returns.

      In the short term, the returns may be volatile, but in the long term, it should be beneficial.

      Having said that there is no guarantee, and one has to take risk for the expected returns.

  2. I am 47 year old and want to invest in tax saving ELSS. Please advise me. My target is for 5years having good return @5K per month. Should I invest Rs.5000/- Pm in a single company or @1000/- PM in different 5 companies. Please also mention the name of the company.

    1. Hi Mahendra,

      You can consider allocating the amount in 2-3 funds. Some of the best performing funds are mentioned in the post.

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