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You must have heard about ELSS Fund but if you have not heard and you want to invest in it, then this blog can be helpful for you because in this blog we have provided all the information related to ELSS Fund so that you can be clear that you should invest in it or not.

What is ELSS FULL FORM

The full form of ELSS is :

EQUITY LINKED SAVING SCHEME

Meaning of ELSS Fund

ELSS stands for Equity Linked Savings Scheme. ELSS Fund is similar to an ordinary equity mutual fund scheme.

The only difference is that ELSS has a lock-in of 3 years. This means that you cannot withdraw your investment before 3 years.

Also, you get a tax benefit of Rs 1.5 lakh under Section 80C of Income Tax every financial year for investing in ELSS Fund.

Who should invest in ELSS Fund

Any HUF or individual can invest in ELSS. It is more beneficial for those who know about it. Can take the risk associated with it and stay in the investment for a long time.

Younger age investors can invest for a long time in ELSS funds. You can be happy to see your fund grow compounded, and take advantage of its unpredictable returns.

ELSS Fund Lock-in Period

ELSS funds have the shortest lock-in period among all types of savings schemes covered under Section 80C of Income Tax.

ELSS mature in the shortest period i.e. 3 years. The investor can withdraw his money anytime after that.

If you invest in ELSS through SIP, then each installment of the SIP is considered as a new investment.

Many investors have a perception that ELSS funds have a lock-in of 3 years from the date of first investment; but it’s not like that.

Every SIP installment is a new investment.

for example-

  • If you invest in ELSS Fund on 15th February 2021 aditya birla tax relief 96 fund If I buy a unit through SIP, then that unit will be locked for the next 3 years i.e. till 15th February 2024.
  • Similarly, the unit purchased next month i.e. on 15th March 2021 will be locked till 15th March 2024.

ELSS Fund Calculator

There is a tool that displays your ELSS Fund returns. It depends on your scheme and investment method. Like you have invested in Lump sum or invested through SIP.

This can be calculated by entering the investment amount, tenure and expected return % in the ELSS SIP calculator. ELSS SIP Calculator

Tax Benefits: ELSS Fund Tax Benefits

In an ELSS or Equity Linked Savings Scheme, an individual or HUF can save up to Rs 1.5 lakh under section 80C of the Income Tax Act 1961.

This means that Rs 1.5 lakh deposited in ELSS is deducted from your annual total income. In this way you can save a substantial amount in the form of income tax.

ELSS Fund Redemption (Payment Process)

In fact, there are as many tax saving investment options as possible. ELSS Fund is the only option with the shortest lock-in period (only 3 years) among them.

After the lock-in period of 3 years, you can redeem it, or get paid.

Now if you want to know whether these ELSS can be redeemed even within 3 years? So my answer would be – not at all. Because ELSS funds do not allow to receive payment before 3 years.

It is recommended by financial experts to invest for 5 to 7 years to get good returns from ELSS.

Redeem in odd situation

In case of exceptional circumstances like death of the investor, the nominee or legal heir can sell the investment only after 1 year from the date of allotment of the unit.

We can understand this in this way that if the investor dies after 5 months of buying the unit, then the nominee will get the unit at the same time. But he will have to wait for 7 months to sell the unit.

All those units get transferred to the nominee, but he cannot sell them for 1 year.

In this way the lock-in period is reduced from 3 years to 1 year in the event of the death of the investor.

Which is better NPS or ELSS

Although the tax benefit in NPS is ₹2 lakh per annum, of which ₹1.5 lakh is available under section 80C and ₹50000 under section 80CCD(1)B.

The maturity period of NPS is when the investor attains the age of 60 years, whereas the maturity period of ELSS is only 3 years.

Over a long period of time, the risk in ELSS gets reduced, and the compounding policy also gives good returns.

Top 5 Best ELSS Fund in 2021

While choosing an ELSS fund, it should be reviewed on various parameters, only then one should be selected.

The decision should be taken based on the financial goals of an individual and his risk taking ability.

Here in the table below is a list of some of the best performing ELSS Funds, which have shown good returns over the years.

ELSS FUND NAME

3 YEAR RETURNS

1 YEAR RETURNS

Mirae Asset Tax Saver Fund

15%+

36%+

Axis Long Term Equity Fund

15%+

20%+

Canara Robeco Equity Tax Saver Fund

12%+

34%+

Aditya Birla Sun Life Tax Relief 96 Fund

12%

16%

Motilal Oswal Long Term Equity Fund

12%

16%

Important notice- The figures in the above list are for your information only. Investors are advised to invest only after collecting the necessary information from their level before investing, considering their financial goals, risk appetite and returns.

Is ELSS safe: Is investing in ELSS funds safe?

If your objective is only to save tax then it is advisable not to invest in ELSS as ELSS is actually a part of equity scheme.

So one should always keep in mind that equity schemes can be risky. However, with the shortest lock-in period as well as tax savings and long-term investment, this fund can deliver much higher returns than other savings schemes.

While choosing an ELSS, one should invest only after considering its risk, lock in period and returns of previous years.

I believe this post ELSS Fund What (What is ELSS Fund in Hindi) You would have liked

Many investment options are available in today’s time like stocks, mutual funds etc. Among them, SIP is also an investment plan where you get very good profits, then if you do not know about SIP and you want all the information related to it, then this blog Must read till the end because in this blog we have given all the information related to SIP so that you will be able to decide whether you should invest in it or not.

What is SIP in English: What is SIP

SIP is a very easy way to invest in mutual funds. In this, you can save for a bigger goal by investing a fixed amount every month or at a fixed interval of your own.

sip With that small amount invested, you can get a huge amount in the long run. Through SIP, the investor has to invest a certain amount in Mutual Fund or Gold ETF etc. for a fixed period.

Investing through SIP is a very simple and better solution for those people who do not have much knowledge about investing in the stock market.

Meaning of SIP

SIP stands for Systematic Investment Plan or Systematic Investment Plan. This is the most popular way to invest in Mutual Funds systematically.

A large middle class section of the society keeps a part of its income in the form of savings; So that he can get financial security in future. Some people keep their savings in the bank. Some people who can take the risk also invest in the stock market.

Saving is considered right only when you invest it at the right place. Money invested in the right place also grows over time; And also protects your future.

Systematic investment planning is one such approach in today’s time; Which can give good return on your invested amount.

How SIP or SIP works

Under SIP, you invest a fixed amount of money in mutual funds continuously every month or at a fixed interval. Under this, you deposit a specified amount in a mutual fund of your choice at fixed intervals.

When investing through SIP, your bank account is linked with the scheme of mutual funds; And on the scheduled date of every month, money is transferred from your bank account to the MF Scheme.

So it is an automated way of investing. This inculcates your investing habit; And you don’t have to think about it again and again.

for example If you start investing ₹1000 in a SIP scheme; So every month ₹ 1000 will be deducted from your bank account; And will be invested in the scheme of mutual fund chosen by you.

In SIP you invest a fixed amount on a continuous basis; This reduces the risk of your investment in the long run.

Benefits of SIP or Benefits of SIP (SIP Benefits in Hindi)

Well, there are many benefits of SIP; Such as ease of investment, tax exemption etc.; But apart from these there are some other benefits as well. Let us know what are the benefits of SIP.

#1. small amount investment (Small Saving)

We know that it involves investing a fixed amount regularly at stipulated intervals. Therefore, it is very easy to get a small amount out of your daily expenses for investment.

You can get a large amount by investing small amount for a long period of time at fixed intervals. You can start investing in SIP from ₹500; Which can provide you good returns in the long term.

#2. Easy to Invest

sip Investing through this is very simple. For this, once you have selected your plan, on the specified date, the mutual fund company withdraws that amount from your account and deposits it in your chosen plan.

Your bank account is linked to the account under your SIP scheme.

for example If you plan to invest ₹500 every month; So every month that money is transferred from your bank account to the SIP account. Unit purchases are made with those rupees; Which will benefit you in future.

Thus, through SIP, you can easily make your investment without any hassle.

#3. risk reduction (Low Risk)

The biggest advantage of SIP is that the risk involved is very low.

for example You have ₹ 50000 to invest in the stock market. Now if you put those money together in the stock market; In such a situation, you do not know whether the market will go up or down the very next day. In this way your move will be very risky.

Now if the same investment is done by dividing it in small intervals, then the risk is reduced.

By depositing this ₹ 50000 through 50 installments of ₹ 1000, we can save ourselves from the loss of stock market volatility.

Thus SIP saves us from losses due to stock market fluctuations by not putting a large amount together and investing through small amount.

#4. Tax Rebate

When you invest through SIP; So you do not get any kind of tax on investing the capital or withdrawing that amount.

Schemes like ELSS which provide tax exemption. They have a lock-in period; By investing in such equity schemes for 3 years, you can get tax exemption under section 80C of Income Tax.

#5. Disciplined Investment

According to your SIP, a small amount is regularly withdrawn from your account and invested in mutual funds. This creates a system of discipline in your investing process. This saving discipline always encourages you; And you get into the habit of saving.

#6. Power of Compounding

Compounding means compounding. Compounding means getting interest on the interest of the money invested by you.

Whenever investment is made in SIP; the return on the amount invested; It is reinvested; Due to which the profit of the investor increases and his returns increase.

#7. Advance Liquidity

Most of the mutual fund schemes do not have any lock-in period. Investors can decide whether to continue or stop investing in SIP according to their need and goal. In this, the investor gets the facility of advanced liquidity along with good returns.

Some schemes like ELSS funds which have a lock in period of 3 years. Barring such a scheme, most of the schemes are like this; In which the investor can continue the SIP investment for a long time as per his need; or decide to close at any time.

#8. Rupee Cost Averaging

By investing through Systematic Investment Plan, you remain free from the fluctuations of the market. It is automatically invested at fixed intervals every month through SIP.

When there is a recession in the stock market, you get more units of Mutual Fund. When the same market is strong, you get fewer units.

Thus, in the long run, the average price of your mutual fund units is not affected by the volatility of the stock market.

If you want to know about Exchange Traded Funds then you are at the right place. In this blog you will be given all the information related to Exchange Traded Funds so that you will be able to decide whether you should invest in it or not.

Exchange Traded Fund

In fact, ETFs are a type of mutual fund.

It is called ETF or Exchange Traded Fund because it also trades like other stocks on NSE or BSE.

These can be bought and sold in the stock market in the same way as shares of a company are bought and sold.

In short, we can say that such mutual fund schemes that trade in the stock market are called ETFs.

What is ETF

Exchange Traded Funds are those funds which you can buy from stock exchanges like BSE or NSE etc.

These are similar to index funds of mutual funds.

You can buy index funds from a mutual fund company; But ETFs can be bought only from stock exchanges.

For example if you are buying SBI Long Term Fund; So buy from SBI’s AMC. But you can buy ETFs from the exchange itself.

This means buying ETFs is similar to buying shares.

ETFs are similar to index funds.

You buy and sell units of an index fund from a mutual fund house. But you can buy or sell ETFs only on the stock exchange.

Buying or selling of ETFs depends on the availability of the buyer or seller in the stock market.

To buy or sell ETFs, you need a demat account. Brokerage charges have to be paid on its sale like mutual funds.

Types of ETF 

There are many types of ETFs available in India. In which equity, debt or gold ETFs are seen.

Let us now know a little more about them as well.

Equity ETFs

You can buy Nifty 50 through ETFs. Nifty 50 contains the names of top 50 companies of India.

Just as the Nifty 50 will increase, so will your ETF returns.

Their expense ratio ranges from 0.05 to 0.01%.

Bond And Debt types of etfs

Their expense ratio ranges from 0.25% to 0.6%.

Gold ETF

You can also invest in gold through ETFs. Just as the price of gold will increase, in the same way the price of its ETF will also increase; And you can get good returns.

Their expense ratio ranges from 1% to 1.5%.

etf

Gold ETFs are available from most of the popular fund houses. in which

Global Indices

One can also invest in big companies like American company like Google, Facebook, Apple through ETF. like-

  • HANG SENG
  • NASDAQ 100
  • Dow Jones
  • Euro Stoxx 50 etc.

That’s why we can say that ETFs are a great option to invest in the stock market.

Whether you want to invest in Sensex, invest in Nifty or Gold, or invest in top foreign company.

You can get good returns by investing through ETFs.

Benefits of ETF

#1 ETFs have very low expense ratios, yet they are not that popular in India right now.

As the interest of the people in India increases, its expense ratio will also keep decreasing in future.

#2 One of its benefits is that no individual can invest in government securities; Whereas one can also invest in it through ETFs.

#3 Managing them does not require a large team of fund experts, as ETFs follow an index.

Therefore, the fund management fee is very less in this.

#4 Like a share in the stock market, you can buy or sell it anytime during any working day of the market. Hence good liquidity is found in it.

#5 If you have selected any index or commodity for investment; So you can easily choose the best ETF. Because ETFs also follow one or the other index.

Disadvantages of ETF 

1- Active Management Funds are well managed; Because investing is done by selecting a group of several stocks; Which gives good returns.

ETFs are called passive management funds. Therefore, they give relatively low returns.

2- ETFs are less popular right now in a country like India. So there are some ETFs that you may have to wait for a few days to sell.

Because you will sell only when there is a buyer available in the market.

Still, we can say that as its popularity increases, this problem will also decrease.

3- There are not many ETF options available in India as compared to developed countries.

where do you invest your money

Being a passive management fund, it follows the index itself and the fund is formed from it. for example-

  • Indian Indices like Nifty 50, Sensex etc.
  • Foreign Indexes like Nasdaq
  • Gold and
  • In industry sector like Pharma Sector, IT Sector etc.

How to Identify a Category of ETFs

By clicking on the ETF about which detailed information is needed, you can check their performance etc.

exchange traded fund

You can guess by looking at the list.

Based on the name of the ETF, you can know what type of fund it is.

For example, by the name of Birla sun life gold ETF, it can be known that it belongs to Birla Company; And follows the Gold Index.

In this way, we can know that the gold ETF which is written at the end follows the gold index.

Similarly, some ETFs are listed as Nifty, Nifty Junior or Nasdaq.

Based on that, we can know what this ETF is related to.

What is the fundamental difference between Mutual Funds and ETFs

In fact, ETFs are a type of mutual fund.

The fundamental difference between mutual funds and ETFs is that ETFs can be bought and sold just like stocks. Whereas other mutual funds cannot buy or sell the scheme directly from the stock market.

We buy mutual fund schemes from a mutual fund company; And redeem the unit with him or receive the payment.

Whereas ETFs are traded in the stock market; And you can buy or sell it in the stock market itself.

Just as each share has a value of its own; Similarly, ETFs also have a fixed price.

When the market opens, its price is fixed according to its demand and supply.

You can buy ETF from the stock market in real time i.e. at that time price at any time.

Whereas the unit price of a mutual fund is decided in the evening after the market closes.

This way, depending on your financial goals and risk appetite, you can get good returns by investing in ETFs.

etf

How to Invest in ETFs

As you know, ETFs are traded in the stock market and can be bought or sold from there.

For this you need to have a demat/trading account. Without this you will not be able to invest in it.

If you do not have a demat account; so you Zerodha You can start investing immediately by opening your account online sitting at home from a platform like

Zerodha Click or tap here to open Demat account from

You can easily operate Demat account in any mobile or computer.

How are ETFs Taxed?

Investments made in equity ETFs for more than 1 year are considered as long term investments.

Long term capital gains above Rs 1 lakh in a financial year attract 10% tax. There is no tax on LTCG less than 1 lakh.

Investments made for less than 1 year are considered as short term investments. Short term capital gains are taxed at 15%.

E-KYC has become very important in today’s time like if you want to open your bank account then you need ekyc for that, or if you want to get pan card then ekyc is required. So we can say that doing ekyc helps you in many things.

In this blog we are going to talk about ekyc, what is ekyc and how to get it done etc. so that you can get help to get ekyc done.

What is KYC

The full form of KYC is- Know Your Customer. It simply means- Know your customer.

It is a process in which a financial or other institution obtains information about the identity of its customer, his address or his age, date of birth, etc.

He also verifies these information through statutory certificates. This process of identifying the customer is called KYC.

What is eKYC

e-KYC Means : Electronic Know Your Customer

It can be understood in this way that the process of authenticating your customer’s identity in a digital or electronic way is called e-KYC.

In this, the process of customer identification is accomplished with the help of digital or electronic devices instead of paper certificates.

e-KYC Aadhar card based is a paperless process, What you must do before investing in mutual funds, Otherwise you will not be able to invest in mutual funds.

For investing in mutual funds e-KYC process of

Before investing in mutual funds, you have to complete the KYC process. You can do this either offline or online.

If you want to know about Mutual Funds then detailed information about it what is mutual fund, and how to invest in, is told through the article.

You can do e-KYC for investing in mutual funds from the website of CAMS Kra or iciciprudential. But while doing KYC with CAMS Kra, there is a restriction that you have to invest in any fund at the same time.

These restrictions are not comfortable for a new investor.

So today we will understand the process of e-KYC from ICICI Mutual Fund website; Because it does not require investment along with doing KYC.

Online e-KYC Required forms to be kept ready for

  1. mobile number
  2. E mail ID
  3. Mobile or laptop computer with camera for taking photos
  4. PAN card scanned image
  5. Scanned image of front and back of Aadhar card

E-KYC process steps

  1. In your mobile or computer browser, type- ICICIPRUAMC.COM/ONLINE-KYC

e-KYC

  1. When the online KYC page opens, first type your name.
  2. Enter E-mail ID, OTP comes on this E-mail ID.
  3. Enter your PAN number.
  4. Enter your 10 digit mobile number.
  5. Tick ​​the check box, and then click or type the Get OTP mark.

e-KYC

  1. Click on Choose File to upload ID Proof like PAN Card. And upload the already scanned image.
  2. As soon as the PAN is uploaded, the photo and its details will appear, which you should check carefully. If the information is correct, go to Next.
  3. Upload the front and back images of the Aadhar card for proof of address as per the procedure given above.
  4. Check Aadhar card details if it needs some correction; So you can correct that too.

Process of e-KYC continue

  1. Tick ​​the box for Term & Condition and go to the next step.
  2. All your information will be displayed on the next page; Check it out carefully.
  3. Select some other information like Address Type (Residential / Business) etc. and Annual Income etc., and proceed further.
  4. In the next step, select the details of Fatca etc. and go to the next step.
  5. Upload the scanned image of your signature on plain paper; And tick on Term & Condition.
  6. In the last step of e-KYC you have to upload your photo and video; For which click on face image. After clicking the photo a number will be displayed on the screen; Who has to speak in front of the camera. Thus this step is completed and a thank you message is received.
  7. After completing this process of e-KYC KYC Form Screen A page of . From where the link of Normal e-sign or Aadhar e-sign appears. In which you can complete this process through OTP by entering the details of Aadhaar.

How e-KYC is more simple and useful

  1. In online KYC, the entire process is completed in a very short time; Whereas the offline process sometimes takes 2 to 4 weeks.
  2. You do not need to collect paper certificates for e-KYC. This makes it easy for the customers as well as the service provider company. It works only with Aadhar card.
  3. Normally collecting a lot of records in KYC leads to unnecessary expenditure of money; Whereas in e-KYC this process is completed without any extra cost.
  4. We do not have to manually fill in the information because of the autofill feature; Which takes less time. Autofill also prevents type errors; Because all the information is taken automatically.

In this blog, we are going to know about ULIP, whether you should invest in ULIP or not, what can be its advantages, what can be the disadvantages etc. You will get to know all the information related to this blog.

Fill out a ULIP form

The full form of ULIP is

U – unit

L-linked

I- Investments

Plan P

Meaning of ULIP

ULIP (Unit Linked Insurance Plan) is a product of market linked investment. Also it is an insurance policy.

So it is a mix of insurance and investment that insurance companies bring to you.

It was first launched by the Unit Trust of India (UTI).

We can say that ULIPs are Insurance + Investment products.

How does ULIP work?

When you pay any one premium of the ULIP; Then a part of it is invested for insurance coverage and a part of the premium of the policy is invested in equity or debt funds.

ULIPs have a lock-in period of 5 years. This means that normally you cannot redeem it before 5 years.

Depending on the risk appetite of the customers, the facility to invest in large, mid, small cap, debt or balance funds is available.

You can also switch it between different funds.

There are two types of time duration in ULIPs.

premium term

It means for how long you want to pay your premium.

term of premium single premium That is, you can invest in one go.

Second fixed period For example, premiums can be deposited for 5, 7 or 10 years.

The third option is that you can deposit the premium at fixed intervals like monthly, quarterly, half-yearly or yearly.

policy term

The policy term of your ULIP can be from 5 to 30 years.

It is worth noting that the longer the premium payment period, the higher the premium amount.

This happens because the insurance company is giving you more time to pay the premium.

What are the tax provisions on ULIPs?

It is an EEE (Exempt, Exempt, Exempt) Exempt, Exempt, Exempt type product.

By investing in ULIP, tax exemption can be availed under section 80C of Income Tax on annual investment of up to 1.5 lakhs.

ULIP It is also exempted from taxation under LTCG (Long Term Capital Gains).

Tax exemption is also available on the payment received on its maturity.

ULIP charges

There are various types of charges in ULIPs. Let us now know about the charges of ULIP.

premium allocation charge

It is a part or percentage of the premium.

Policy Administration Charges

This charge is levied for the maintenance of the policy etc.

It is taken as a percentage; Or it can also be taken in flat form.

mortality charge

It depends on the health and age of the investor.

These charges are deducted at your unit.

fund management charge

It is a part of each NAV. This charge may vary according to each company and its different plans.

partial withdrawal charge

This charge is levied on withdrawing some part of your fund in the medium term itself.

Apart from this, there are surrender charges, which are levied if the payment is taken before the maturity period.

fund switching charge

These charges are levied on switching from one fund to another.

Is ULIP Good What It is better to invest in ULIPs

To invest in ULIPs, you need to have patience as well as a long time to invest.

If you are planning to invest in ULIPs; So make sure to think carefully whether you see that ULIP as an investment or as an insurance.

as a life protection product ULIP Nothing special.

Because the insurance on ULIPs is limited to a maximum of 15 to 20 times your annual premium.

for example- If you buy a ULIP with a security cover of Rs 1 crore, your premium will be ₹ 2 to 3 lakh.

Whereas a person of 30 years can take a term insurance of one crore with an annual premium of 10 to ₹ 15000.

ULIPs and Mutual Funds

Like mutual funds, you can invest in ULIPs by paying premiums at a fixed interval.

You can choose the premium as per your investment needs.

Like mutual funds, the rate of return in ULIPs is determined by the NAV.

ULIPs have a minimum lock-in period of 5 years; And it also includes insurance cover.

Similarly, some mutual funds like ELSS funds also have a lock-in period of 3 years.

The annual amount deposited in it up to Rs 1.5 lakh is also exempt from income tax under section 80-C of Income Tax.

Benefits of ULIPs

  • These are called long term wealth creation funds.
  • Investing in it for a long period of time can give a return of 10 to 12% along with security cover.
  • In this, 10 times your annual premium gets Sum Assured or Jeevan Suraksha cover.
  • ULIPs also give you the option to switch to different investment plans as per your requirement.
  • Profits from ULIPs are tax free as per 80C and 10D of Income Tax.
  • Apart from switching from one plan to another, you can also partially withdraw your investment.
  • You can also increase your investment by opting for a single premium payment option.

Risk Factor about ULIP Risks of ULIP

You must have seen advertisements of insurance companies.

They say at the end that “this market is subject to risks, please read the policy document carefully before investing” so make sure to go through it thoroughly before investing in ULIPs.

The returns of your Unit Linked Insurance Plan are directly linked to the performance of the market. Therefore, it may also have to face its risk in future.

Top companies from where to invest in ULIPs

  • Life Insurance Company of India (LIC)
  • SBI Life
  • Bharti Aksa Life
  • PNB Met Life
  • Canara HSBC
  • HDFC Life
  • Bajaj Allianz
  • Kotak Mahindra Life
  • Aditya Birla Sunlife
  • Max Life Insurance
  • ICICI Prudential
  • Aviva Life Insurance

Best ULIP in 2021

Given below is a table of some Unit Linked Insurance Plans (ULIPs).

Based on their performance over the past few years, you will be able to take the right decision to invest in ULIPs.

ULIP
Table By- moneycontrol.com

Conclusion

An investor should always keep investment and insurance separate.

Many investors opt for ULIP or traditional insurance to get both insurance and investment together.

But by taking such a plan, you only get less insurance in comparison to your invested capital.

Through term insurance, you can get a protection cover of one crore in very less money.

Similarly, for investment, you can get good returns in the long run by investing in mutual funds etc.