What are the investment modes to invest in ELSS funds?

1. What are the investment modes to invest in ELSSfunds? • When it comes to market-linked investment avenues, mutual fundsare one of the best ways to invest. They offer you diversification of risks through their diversified portfolio, offer you the choice of funds based on your risk appetite and also allow you to invest in small and affordable amounts through monthly investments. Moreover, the returns are also attractive and inflation adjusted helping you to maximize yourwealth. • While there are different types of mutual fund schemes, Equity Linked Investment Schemes (ELSS) is one of the best. These schemes are equity oriented mutual fund schemes which also allow you tax benefits. If you choose to invest in ELSS funds,you can get a tax benefit on the investmentmade. • Investment up to INR 1.5 lakhs is allowed as a deduction from your taxable income allowing you to lower your tax liability. Moreover, when you redeem the funds, returns earned up to INR 1 lakh are tax-free. If the returns exceed INR 1 lakh, a flat tax of 10% is charged on such excess returns. Thus, from the perspective of taxation, ELSS schemes arebeneficial. • Since ELSS funds are attractive, many investors opt to invest in such funds. Do you know how such investments can bedone? • When it comes to investing in ELSS mutual funds, there are two options which you choose. They are as follows– • Lump suminvestment • Monthly investments through Systematic Investment Plans(SIPs) • Let’s understand these investment modes and find out which one is better– • What is the lump suminvestment? • Lump sum investment is when you choose to invest a lump sum amount of money into an ELSS scheme. Usually, the minimum amount required for lump sum investment is INR 500 to INR 1000 depending on the scheme that youchoose. • What isSIP? • Systematic Investment Plans (SIPs)mean investing in the ELSS fund through regular instalments. These investments are usually done monthly at a fixed amount. The minimum amount required for investing in SIP online is INR500. • Which investment mode isbetter? • When deciding on which investment mode is better, each has its own pros and cons. Let’s understand what they are– • Benefits of lump suminvestments • If you have a surplus amount of money which you want to invest one time, lump sum investment isideal • Lump sum investments give you better returns over SIPs since they remain invested for a longerperiod • You can get a higher tax benefit through lump suminvestment

2. Benefits ofSIPs • Starting a SIP online is very easy. The instalments are automatically deducted from your bank account on the specifieddate. • SIPs allow you to invest in an affordable manner regularly so that you can create a considerable corpus in thefuture • Since SIP investments are usually automated, it encourages disciplined savings every month so that you can create a considerablecorpus • When you invest in SIP online, you don’t have to time the market. Investments are done at a specified date regularly giving you the benefit of rupee cost averaging. This benefit ensures that the effective NAV (Net Asset Value) of buying the scheme is averaged out over the investment period. Thus, any highs or lows of the market do not impact your investmentsgreatly. • Since SIPs require a small amount of investment, they are accessible by both small and large investors. Every type of investor can choose to invest in the best SIP plan to bank on the attractive returns offered by thescheme. • Which one should youchoose? • Since both SIPs and lump sum investments have their respective pros and cons, the final choice ultimately comes down to you. If you want to invest a large amount one time, a lump sum investment would be good but if you want to slowly and steadily build a corpus for your financial goals, choose the best SIP plan. Moreover, SIPs are suitable for those who can regularly set aside a small part of their incomes towards investments while the lump sum is good for those whose incomes are irregular. So, assess the pros and cons of both the modes of investment and then choose the best SIP planor lump sum plan as per yourneeds.