The returns from these mutual funds are better than those from traditional bank FDs.
Tax-saving mutual funds have gained significant popularity in recent times as investors seek avenues to optimize their tax savings. These funds typically allocate a minimum of 80% of their assets to equities and are aligned with the equity-linked savings scheme (ELSS). Offering superior returns compared to traditional bank fixed deposits (FD, tax-saving mutual funds provide tax benefits under Section 80C of the Income Tax Act of 1961.
Read More: RBI Slaps Penalties on Standard Chartered Bank-India, Other Entities
Consequently, investors are increasingly sharing information about ELSS and its potential benefits. However, it is crucial to thoroughly understand the specific schemes that would prove profitable for individual investors before making any investment decisions. It’s worth noting that investing in mutual funds does involve some level of market risk, which may result in a potential loss of capital. Nonetheless, the top five mutual funds mentioned below have demonstrated commendable returns of 24% to investors.
Quant Tax Scheme: Launched on April 1, 2000, this fund has showcased impressive returns over various periods. It has recorded returns of 24% in one year, 38% in three years, and 22% in five years. The minimum investment required for this scheme is Rs. 500, making it an attractive option for investors.
Read More: JPMorgan director, investor James Crown dies in race car crash on 70th birthday
Kotak Tax Saver Fund: This scheme offers investors the combined benefits of growth and tax savings. Its objective is to generate long-term capital appreciation, catering to those seeking sustained growth with a three-year lock-in period. The scheme offers two plans: Direct and Regular. The direct plan has yielded a return of 16.78%, while the regular plan has delivered 15.17% returns over five years.
Bank of India Tax Advantage Fund: To generate long-term capital growth, this scheme does not guarantee any specific returns. However, it has delivered double the returns compared to FDs, with a recorded return of 15.4%. Under the regular plan, it has yielded a return of 14.1% over five years.
Canara Robeco Equity Tax Saver Fund: Launched in 2013, this fund has an expense ratio of 0.53%, which is relatively lower compared to other ELSS funds. The direct plan has generated a return of 16.5%, while the regular plan has yielded a return of 15.3% over five years.
Mirae Asset Tax Saver Fund: Introduced in 2015, this scheme has also produced significant returns over the past five years. The direct plan has delivered a return of 16.7%, while the regular plan has provided a return of 15.1% over the same period.
(It is important for investors to carefully evaluate their investment goals and risk tolerance before making any investment decisions. Consulting with a financial advisor is highly recommended to make informed choices based on individual circumstances.)
