How does lockin period work for SIP?
The lock-in period in mutual funds means the investor cannot redeem the units before completing a predetermined period from the date of investment. The redemption is based on the units invested. The lock-in period is for both lump sum and SIP investment.
Can ELSS be done in SIP?
ELSS is an investment vehicle in itself while SIP is not, it is instead a way of investing not only in ELSS but also in any other mutual fund. Therefore, ELSS cannot be compared with SIP as it’s not an apple to apple comparison.
Is there a lockin period in SIP?
SIPs provide complete flexibility on investment amount, choice of monthly and quarterly investing & tenure of investment. There are no lock-in periods for SIP route of investing. Expert tip: Only Tax Saving Mutual Funds have a lock-in period of 3 years and not other MFs.
Does all ELSS have lock in period?
All ELSS mutual funds come with a mandatory lock-in period of three years. You cannot withdraw your ELSS investment within the three years from the date of investment. There are no provisions of paying the penalty and redeeming your units within this period.
What is lock in period in ELSS?
Also, investments in ELSS are allowed deduction from taxable income for the purpose of Income Tax u/s 80C of the Income Tax Act, 1961 up to Rs 1,50,000 subject to certain conditions. One such condition is that investments in ELSS are subject to a lock-in period of three years from the date of allotment of ELSS units.
How is ELSS interest calculated?
For instance: If you plan on investing Rs 5000 a month for 12 months with an expected rate of return of 15\%, the ELSS SIP Calculator will be able to calculate the maturity value of your SIP. Your cumulative investment will be worth Rs 60,000 (INR 5000*12 months). The maturity value of this SIP will be Rs 65,106.
How is mutual fund locking period calculated?
Lock-in period in Mutual Funds refer to the period during which the investor is prohibited from redeeming the units of the fund, either partially or wholly. Usually, the lock-in period in case of the close-ended fund is 3 years. In India, most of the mutual funds do not have a lock-in period.
Does ELSS have lock in period?
Investments made in an ELSS fund are locked-in for a period of three years, and there are no provisions to pay the penalty and redeem your units within the lock-in period. Since ELSS funds are locked-in for three years, there is no possibility of realising short-term capital gains.
What is the lock in period for ELSS mutual funds?
A 3-year lock-in period is applicable on ELSS – as the schemes qualify for tax deductions u/s 80C, which is lowest among the tax-saving investments.
What is the lock-in period of ELSS for SIP?
The lock-in period for ELSS is three years from the date of allotment of mutual fund units and is calculated something as the FIFO (First In First Out) principle. Suppose you started doing SIP of Rs 5,000 in an ELSS fund whose NAV initially is Rs 10. You started on the 1st of January 2015.
What is the lock-in period for ELSS funds under Section 80C?
Many investments come with a lock-in period. This is the period when you are not allowed to sell the investment. Usually, it is some months/years from the date of purchase. In the case of ELSS funds, the lock-in period is three years. If we compare this to the other investments under Section 80C, ELSS funds have the lowest lock-in period:
Do I have to redeem my units once my ELSS lock-in period is completed?
Q1. Do I HAVE to redeem my units once my ELSS lock-in period is completed? It is not mandatory to redeem your ELSS units once the lock-in period is over. You can choose to redeem or stay invested based on the performance of the fund.
How do I invest in ELSS funds?
You can choose to invest in a lump sum or instalments via a SIP. All ELSS funds have a lock-in period of three years. Once the lock-in period ends for a particular instalment/lump sum investment, the ELSS becomes an open-ended equity-oriented investment scheme with full liquidity.