I compared ELSS (Equity Linked Saving Scheme) mutual funds on the basis of their AUM (assets under management) size and past performance in 6 months, 1 year, 2 years and 3 years.
Finally following funds were found to be good.
Canara Robeco Equity Tax Saver, Sundaram BNP Paribas Taxsaver, HDFC Taxsaver, SBI Magnum Tax Gain Scheme 93 – Dividend, Franklin India Taxshield – Growth, DSPBR Tax Saver, Fidelity Tax Advantage
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Hi Pankaj,
i want to invest into liquid mutual funds (short term for one month). i went through your article on investing in liquid mutual funds posted an year back. Is the market condition safe now to invest in those listed liquid mutual fund?
i am planning to invest around 20,000 for a month. How returns on an average it would yield?
@Chaithra
Liquid mutual funds do not invest into equities, so mostly does not have much impact of market conditions.
Investment into these funds are always safe and linked to market interest rates. As interest rates are increasing. These will also give you somewhere around 6-7% annual return.
Hi Pankaj,
I invested in Reliance ELSS tax saver fund. Is it good?Bit confused…Thanks in advance!!
@Aman
Don’t worry, Reliance ELSS tax saver is a good fund.
Hi Pankaj,
I read in Initial comment that it not a right time to invest in Mutual fund as market is on high and chances of getting correction, pleas tell me where to invest as I need to do investment as I need to take tax benefits.?
@Vivek
You can invest in Mutual funds right now as well but make sure you do it through SIPs so that cost of acquisition is evenly spread.
Rather that investing whole amount in one go (lump-sum) try to invest monthly.
Dear Pankaj,
I read the Newppaper articles that FMPs are better than FDs & Tax efficient too.
Does that mean we can invest in FMPs to take advantage of clause 80C? What are the average returns on FMP, how they operate & what are good FMP offerings currently in Market.
Thank you in advance.
@Purshottam
Yes, FMPs are better than bank fixed deposits.
But tax saving advantage is not available for these under 80C.
Returns are generally better but not guaranteed like as in FDs. They are closed ended scheme and you can only invest for a specific period of time when they open.
There are many schemes being launched now.
@Pankaj
How FMPs operate. Do they invest in Equities or Debt Market? What is best FMP offering so far & how much is the return?
Thanx.
@Purshottam
They invest in Debt market.
As I said earlier you cannot invest in past schemes as FMP are closed ended schemes. You can track which funds are open on this page: http://www.moneycontrol.com/mutual-funds/new-fund-offers
And return is not fixed and not declared at the scheme launch.
I want to invest Rs.50,000/- in Tax Saver Mutual Fund. Can you please suggest me a good Mutual Fund to Invest in? and also whether it is good to invest a lumpsum amount in Mutual Fund as markets are high right now.
@Rahul
Its not advisable to invest in lumpsum in mutual funds at this point. A correction may eat your investment to an extent in near future.
Still you have some time left in this financial year. Split amount in 4 parts and invest each month, say on 25th.
Good funds for investment are Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Hi Pankaj,
At first i thank you for giving good suggestions to us. Regarding me, I have to invest 75,000/- against tax savings. Could you please how can i invest. Another thing is it is gud to go for child investment plans, asking this as i hv a baby gal of 10 months old.
@Sreelatha
Regarding tax saving, I would advise you to split the investment into Term insurance, PPF, Tax saving mutual funds, medical insurance and NPS (new pension scheme).
Rather than child investment plans from insurance companies, better invest in balanced mutual funds regularly, they will be better in long term.
Hi Pankaj,
As per your advice previously i have started HDFC Taxsaver SIP from Aug-10 to July-11. But i heard that we can use ELSS till March-12. Please tell is there any option to extent the sip till March-12?
Thanks in Advance. Thanks for your very useful informations.
@Mothilal
From 1st April, 2012, direct tax code will be applicable which will remove tax exemption from many investment schemes like mutual funds, ULIP etc. Read more details about direct tax code here: http://www.pankajbatra.com/india/new-direct-tax-code-dtc-highlights/
You may invest till March 2012 in ELSS without any issue.
Hi Pankaj,
I have taken a home loan this year. Now wanted to secure this home with home insurance. Please advise the best ways I can do. Also I heard that LIC Jeevan Anand has a home insurance cum pension scheme. Is it true? Whats the best Pension Scheme? Thanks and Happy New Year to you.
Jay
@Jay
Best way to secure your family against your liabilities is to get a Term insurance. One must have insurance of at-least 8-10 times his/her annual income.
Apart from home loan, it will also protect your family against any unforeseen incident even after home loan full payment as well.
Jeevan anand is neither an home insurance nor a pension scheme. Its an endowment plan, Read more here: http://www.licindia.in/endowment_005_features.htm
Dear Pankaj Sir,
I invest Rs.15000/- in tax saving mutual fund which fund is suitable for me.
Thanking you.
@Amit
you may choose to invest from the following funds: Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage
Hi Pankaj,
I want to invest 40K for tax-savings this year & I am contemplating investing in tax-savings MFs. I read from your article that its better to invest through SIP.
Unfortunately, I have to invest before 5th Jan’11 since need to submit Investment Proof by 10th Jan’11.
I am planning to invest 10K each in Fidelity Tax Advantage, HDFC Long-Term Advantage, DSP Blackrock taxsaver and Canara Robeco Equity TaxSaver
Would request your views on the choice above – Also any other advise from you would be highly appreciated.
Thanks in advance
Gaurav
@Gaurav
All funds selected by you, have excellent past record. You may go ahead and invest in same.
Hi Pankaj,
Though from your previous posts I got many ideas about tax saving investments, I want to ask you few things.
First, Is PPF a good option for investment? I personally feel locking up money for 15 years is a pain. Please convince me as I opened a PPF account last year and right now confused to put money in it again or not.
Second, I need to do investment for tax benefit of amount 50k, could you please suggest me any good option as I need to produce the investment proofs before 15th Jan.
Since I have less time, it is equivalent to divide and invest 50k in 3-4 different MFs for diversification rather than opening up a SIP now?
@Ashish
You must divide your investments into both safer and riskier avenues. Also, rather than just thinking for short term, one must also think for the long term.
Portfolio should be a mix of safer investment (into Fixed deposits, PPF, Post office deposits, NPS) and riskier one (Equity linked mutual funds).
Advantage you get with PPF is tax free and good return. Everyone has tendency to spend whatever he has and not care about investments for future needs (children education, pension etc.). PPF fits in here for future needs. I know its a pain to see your money locked for 15 years, but Govt promotes these just to ensure public save for the long term.
If you need to put 50K now, I would advise you to do following:
1. Term insurance (if not already taken, for minimum sum insured for 10 times your annual salary), Assuming 10,000 Rs premium.
2. PPF or NPS – 10,000 Rs (if you already not have new pension scheme account, its late already to invest before 15th Jan, as it takes some time to open)
3. Equity Linked Tax saving mutual funds – Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver, Fidelity Tax Advantage (6000 each in these 5 funds)
Also, apart from these savings under 80C, you may also save further by buying medical insurance for you and your family and investing in long term infrastructure bonds.
Hi,
I have invested Rupees 2000 each from August-2010 in following ELSS funds. I am planning to invest further 30000 on ELSS. I am planning to invest in the same. Can i go ahead or suggest me any other ELSS schemes.
SUNDARAM BNP Paribas
AXIS Tax saver
ICICI prudentail
@Radhakrishna
I would advise you to choose among Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage
Hi Pankaj,
I really like your posts and input on savings. I have a question, What are the benefits and disadvantage of investing in NPS (New Pension Scheme) versus that of PPF( Public Provident Fund) ? Which is a better option in the long term ?
I know that PPF has a lock in period of 15yrs … how much for NPS?
@AmeetB
PPF scheme is only for 15 years (can be extended further for block of 5 years). NPS is locked till age 58 years.
PPF gives only fixed return (9.5% at present), whereas in NPS, you can choose allocation of investment to debt and equity schemes.
Over a long period of time, NPS will give better return than PPF. Plus as money is locked till retirement age, its beneficial at old age.
NPS is a new initiative and better managed than old PPF.
I also want to ask… where can I purchase a NPS from ? Where can I open a PPF account ?
@AmeeB
To know more about NPS, read this post: http://www.pankajbatra.com/india/new-pension-scheme-nps-india/
You can open a PPF account at any branch of the State Bank (SBI, Mysore, Hyderabad etc), or with some other nationalized banks. A PPF account can also be opened at any post office.
Hi Pankaj,
Is is better to purchase MFs with high NAV or low NAV value at this time.
How is sundram tax saver?
@Ashish
High or Low NAV of mutual funds does not necessarily depicts if the fund is good or bad.
Rather than going by NAV, check out how much return fund has generated in past (6 months, 1 year, 2 years, 3 years, 5 years etc). If a fund is there in top list for all these durations, there is high chance that it will also do good in future.
Sundaram Tax saver is good fund, but you also choose from some of the better ones like Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Hii,
I have invested in SBI Magnum and IDFC for the prupose of tax saving.So wats ur opinion on both of these funds…..and How can i decide which fund is better apart from the NAV which is itself largely inflated by the funds….
@Rohit
Rather than going by NAV, check out how much return fund has generated in past (6 months, 1 year, 2 years, 3 years, 5 years etc). If a fund is there in top list for all these durations, there is high chance that it will also do good in future.
You can choose from some of the better funds like Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Hi,
I need to Invest 80k in ELSS schemes for tax saving purposes. I understand that the time is not right for a lumpsum investment, but need to declare my investments for the year in the company I work for. Can I still go for an SIP? How should I split my investments into the various ELSS schemes (how many goes where?). Thanks!!!
@Schadha
Minimum investment period for SIP is 6 months in tax saving mutual funds.
If you start SIP now, you can only invest 3 times (Jan-Mar) this financial year. You can start SIP for 6 months, which will also cover 3 months of next financial year.
Invest 4000 each in Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage monthly.
For remaining 20000, invest in PPF/Fixed deposit and buy Term insurance (in not already taken)
thank you!
Hi Pankaj,
I need to invest in some of the ELSS mentioned by you. Could you to pls suggest me how to go about it? I know the form can be downloaded but where should I deposit it? How long will the entire procedure take as I need to submit the proofs of investment by 10th Jan’11 in my office?
Also, can I deposit the lump sum amount for this FY and start SIP for the next FY?
@Shefali
Mutual fund investment takes one day only and you will get statement of investment on same day on your email id, which can be submitted as investment proof to your employer.
Regarding how and where to apply in mutual funds, I would advise you to read following posts.
http://www.pankajbatra.com/india/how-to-transact-mutual-funds-online-directly/
http://www.pankajbatra.com/finance/mutual-fund-investment-with-zero-entry-load/
http://www.pankajbatra.com/finance/best-way-to-apply-in-sip/
Yes, you can invest in lump sum now and start SIP next year.
I dont have any term insurance nor LIC for me. Should I take term insurance/LIC now or shall I take it after my marriage? I have insurance from my company.
Can you suggest me a good (for Tax saving):
1) LIC Policy where I can get assured long term money, even though returns are less.
2) A good term insurance from any company.
Please suggest how much money I should invest?
@Vicky
Its better to buy term insurance as early as possible as premium increases with age. Less the age, less the premium (which remains same for next policy term of say 30-35 years).
You can choose LIC Amulya Jeevan as term insurance and invest into PPF or NPS for long term safe investment.
Also consider equity linked mutual funds for long term as they will yield better return in long run than PPF or NPS.
PANKAJ,
MY QUESTION WAS THAT IF I TAKE TERM INSURANCE FOR ME NOW, CAN I ADD MY FAMILY MEMBERS ONCE I GET MARRIED INTO THE SAME POLICY WITH SAME PREMIUM. OR DO I WOULD NEED TO TAKE ANOTHER POLICY FOR MY FAMILY. IS THERE ANY FAMILY FLOATER POLICY WHICH PROVIDES THIS OPTION.
I HAVE LOOKED AT LIC AMULYA JEEVAN, I WAS ALSO THINKING IF THERE ARE ANY OTHER GOOD POLICY FROM ICICI/ APPOLO/HDFC AND SBI ???
@Vicky
Term insurance is an individual insurance and family members can not be added to it.
I believe, you are confused between Medical and Life term insurance.
If you buy an individual medical insurance policy of you, more family members cannot be added.
In case of family floater medical policies, only children can be added later, not the wife.
Apollo does not provide life insurance.
ICICI iProtect is another good policy, apart from LIC Amulya Jeevan. HDFC and SBI too provide term insurances but their premiums and ratings are not that good.
Pankaj,
Can you help me in guiding how to buy ICICI I Protect Term Policy. I want to buy it within a week only. Please let me know if there are any better newer term policy in market than ICICI I protect. One query I have, once I do the payment online, how do I sumbit my documents?
Best Regards,
Vicky
I am looking for a Coverage of Rs.50 Lakhs to Rs.1 Crore..
@Vicky
ICICI iProtect term policy has been replaced by ICICI Pru iCare. You can buy it online on this link: http://www.iciciprulife.com/public/BuyOnline/iCare/iCare.htm
After you make payment online, you can send scanned copies of document on email or can also deposit hard copies at nearest ICICI Pru insurance branch.
LIC is also expected to launch its online term insurance policy soon.