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Factors
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ELSS
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Tax Saving FD
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Investment
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ELSS is an equity mutual funds which invests primarily in shares or shares related investments
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It’s special fixed deposit made with any bank for at least 5 years.
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Returns
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The returns in ELSS is not fixed and is completely dependent on equity market’s performance.
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The returns obtained are fixed and known to an investor at the time of deposit. Each bank has their own interest rate. Generally it varies from 6.5%-7.5%.
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Risk
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There is no guarantee of principal safety in ELSS. However, equity investments generally give positive returns on the long-term. As per our research, BSE SENSEX has delivered an annual return of 12.78% in past 10 years.
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Tax saving FDs are as safe as Normal fixed deposit of banks.
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Liquidity
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Amount Invested in ELSS can be withdrawn any time.
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Tax saving FDs can’t be withdrawn within 5 years of investment
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Tenure
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The tenure ranges from three years till any time period as per choice of investor
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The minimum tenure is 5 years while the maximum tenure is 10 years.
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Lock in period
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There is a lock-in period of 3 years in ELSS
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There is a lock in period of 5 years involved.
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Online
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ELSS can be done Online. An investor can invest or sell ELSS fund any time
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Some private banks have started offering Tax saving FDs online, but a majority of banks don’t have online facilities.
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