Whenever you think of investing your money, your focus is always on security and better returns. You are not the only person to think so. Many times it is seen that investors invest money in wrong place due to high returns. Let’s know such a scheme where you will get better returns on investing as well as your money will also be safe.
What is an equity linked saving scheme?
If you want to save tax by investing in mutual funds, then an equity linked saving scheme may be a better option for you. Investing in ELSS should not just spend money keeping in mind the tax exemption, but also get information about the long-term returns of the company, the stability of the business. Given the fluctuations in returns, one should try to avoid change every three years.
Return status: Before investing equity linked savings scheme, we should know that 65% of its money is invested in the stock market. In such a situation, nothing clear can be said about the return. The ELSS has a lock-in period of three years. That is, you can withdraw the investment only after three years.
What is eulip?
Ulip is an investment in which if you invest money, then you also get better returns with insurance cover. There is a tax rebate on investing in it. To take advantage of the tax exemption in ULIPs, it is necessary that the insurance cover in it is at least 10 times the annual premium. Being covered by the market, ULIPs have lower insurance cover. In such a situation, to save tax, if you invest 2.5 lakh rupees annually in ULIPs, in return you will get an insurance cover of 25 lakh rupees. While you can buy an insurance policy of 50 lakh rupees at an annual premium of just five thousand rupees. In addition, ULIPs charge a maintenance fee of up to three per cent, while ELSS charges up to 2.5 per cent.
ULIPs have a lock-in period of five years. Apart from this, if you are unable to deposit the premium even after getting the grace period in the five-year period of ULIP, then the policy ends.
Public provident fund
Public Provident Fund was started in 1968. But even today it remains a favorite of all. A big reason for its popularity is that if you invest your money here, then your money is completely safe. In addition, the investor is also exempted from income tax. If you invest in it for 15 years, then after 7 years you will be able to take a loan on it.
| The scheme | Tax rebate | Return rate | Minimum lock in period | Minimum investment |
| Elss | Up to Rs 1.5 lakh | 12% – 14% | 3 year | 500 rupees |
| ULIP | Tax exemption on the basis of premium under section 80C as well as exemption under 10 (10D) on maturity | 16% on average | 5 years | Dynamic |
| PPF | 1.5 lakh exemption under section 80C | 7.90% | 15 years | 500 to 1.5 lakhs |
