To get the maximum profit from your tax-saving mutual fund investments, you should look for a fund that has a proven track record of giving higher returns. This is why the fund houses of the best tax-saving mutual funds should have a good track record of higher returns. They must also have low expense ratios, as a lower expense ratio means more profit. Expense ratio for a large-cap fund is usually between 0.5 and 1.5%.
Tax-saving mutual funds can provide high returns if you invest a significant amount. However, their minimum investment amount is Rs. 1,000. The fund houses charge higher fees to cover administrative costs, which push the NAV of the fund down. The best tax-saving mutual funds balance the returns and expense ratios. You can invest in an ELSS fund through ICICIdirect. By investing in an ELSS fund, you can reap the tax benefits and create wealth.
Another option is the Mirae Asset Tax Saver Fund Direct-Growth, an equity mutual fund scheme. This fund seeks long-term capital appreciation. It also offers tax benefits under Section 80C. The fund invests in stocks with good fundamentals. In addition, it invests in international equity markets and GDRs. By investing in the Best Tax Saving Mutual Funds, you can expect to save up to Rs 46,800 a year on taxes.
ELSS mutual funds are one of the easiest ways to save taxes while investing. The tax savings that you earn from this investment are significant and consistent. The lock-in period is three years and you must invest them for five years. As a result, ELSS funds are generally not suitable for short-term investments. On the other hand, ELSS mutual funds are the most convenient tax-saving opportunity for individuals. In fact, every person can make use of ELSS mutual funds.
A tax-saving mutual fund should have a high return potential. In order to maximize the tax-saving potential of an investment, it should have a long lock-in period. The ELSS mutual funds have the lowest lock-in period at three years, while all other tax-saving options come with a five-year lock-in. However, you should also look for investment limits and fees. For instance, you should consider whether you need a higher return or a lower risk tolerance.
ELSS mutual funds offer favourable tax treatment when you redeem your investment. That means that ELSS mutual funds are ideal for people who wish to save money for long-term financial goals like retirement, a child’s education, or marriage. The returns from ELSS mutual funds can increase your wealth in the long-run. So, look for the best tax-saving mutual funds today. And remember, it pays to know the difference between the best tax saving mutual funds and the average ones.
Besides the best tax-saving mutual funds, you can also invest in SIPs (Systematic Investment Plans) – monthly investments that do not involve a lump sum. These funds qualify for the Section 80 C exemption and the rupee cost averaging method. But you must lock in the SIP for at least three years to enjoy the maximum benefit. This is the most popular way to invest in mutual funds and save taxes.