ELSS vs FD: Why Equity Linked Saving Scheme Is Better Than Fixed Deposit

wealthfundWith only few days left to save tax, the earning mass of the country has already started looking for best tax saving options to invest in. Where many people opt for traditional measures such as, FD; a huge section of the earning generation is trying investment option like ELSS. If you are among those, who are confused between FD and ELSS, as of which investment option is better to go with, must keep these traits of the respective options in mind:

ELSS – Equity Linked Saving Scheme

  • It is a type of Mutual Fund. In this type of fund, major share of the fund corpus is put in equity-related products or equities.
  • Returns in ELSS is based on the equity market performance.
  • The minimum lock in period for ELSS is 3 years. Investor can extend the period of investment, whenever desired.
  • ELSS is ideal for those, who wish to save tax.
  • ELSS fund comes with some risk, as the gains depend on equity market performance.
  • ELSS investment can be started online.
  • Investor can withdraw money after 3 years of pre-defined lock-in period.

FD- Fixed Deposit

  • FD is saving scheme that can be opened at any bank.
  • Rate of interest ranges from 6.5% -7.5%.
  • The minimum lock in period is 5 years, whereas the maximum lock in period is 10 years.
  • It is one of the safest options to invest in.
  • FD can be started online, however many banks still don’t offer this facility.
  • In case of tax saving FD, investor can not withdraw the funds until 5 years of investment period.

Want to know more about ELSS or the best Equity investment options? Visit www.wealthfund.in and sign up to discover the best investment options.

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