Benefits of Investing in ELSS Funds through SIP’s

The Equity Linked Savings Schemes also popularly known as ELSS Funds are excellent tax saving options that are availed by salaried professionals as well as business people to enjoy a hassle free tax filing process at the end of every financial year.Such funds make it hugely possible for investors to earn a substantive amount of money through the growth in equity and the appreciation of capital while being able to save a considerable amount of money that would otherwise have been spent as income tax.

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The ELSS Funds are known to have takers from every age group and can be invested in through a procedure known as the Systematic Investment Plan. The SIP makes investing in ELSS Funds a lot more comfortable than what it would be as investors get to avoid lump sum investments by opting for such a scheme.

To know more about the benefits of investing in an ELSS Funds using SIP the following points need to be borne in mind.

What is SIP?

SIP is a quick method of investing money online, by which money from the bank account of the investor shall get debited on a regular basis and which shall then be credited to an ELSS Funds scheme. Once a certain amount of money has been debited as ELSS Fund investment, the investor will be accorded a certain number of units depending on the Net Asset Value of the particular ELSS Fund scheme that the investor has opted for.

The more money that is invested in the ELSS Fund using SIP the greater will be the number of units that is awarded to the investor. The manner in which the money is debited from the bank account of the investor is the Electronic Clearance System or ECS which is smooth and transparent and there are very few chances of any errors or mishaps taking place with such transactions online. 

Some Well Known Characteristics of ELSS Funds

  • The ELSS Funds are open ended equity funds that make it possible for investors to save a huge amount of money on the payment of income tax.
  • Those who choose to invest in ELSS Funds such as the Religare Invesco Tax Plan or the Axis Long Term Equity Fund can save as much as fifty percent that they would otherwise have had to disburse to the income tax department at the end of the financial year.
  • The ELSS Funds are typically characterised by a lock in period of three years.
  • As a result the ELSS Funds are able to ensure both long and short term gains for investors and fund managers alike.
  • The ELSS Funds are subject to market risks all through the year.
  • Yet these are funds that expose investors to long term financial growth through growth in equity and appreciation of capital.
  • The minimum of amount of money which investors are required to spend in order to benefit from the ELSS Funds is 5000 INR which can be easily afforded by people of every budget.
  • This makes ELSS Funds ideal for senior citizens as well as for salaried professionals.

Merits and De-merits of ELSS Funds Investments


De- Merits

Ideal for persons from every economic background including business persons, senior citizens and salaried employees

Paperwork associated with ELSS Funds investments can run into several months

Long term financial growth via appreciation of capital

Market related risks cannot be avoided

Can be invested using SIP with minimum investment amount being just 500 INR

Premature withdrawals cannot be made

Investment applications can be submitted online very quickly and easily

Too many choices of schemes for investment thus confusing investors

People Also Read: SIP Calculator

How can Investing in ELSS Funds be Beneficial Using SIP?

Starting an SIP Online can be done in Minutes

  • One of the most important benefits of using SIP for investing in ELSS Funds is the fact that the process of starting an SIP is very easy.
  • SIP’s can also be started at any point of time.
  • We make initiating SIP’s online a very convenient experience for our customers by implementing the procedure online.
  • All paperwork pertaining to the creation of SIP’s are undertaken by us including filling up forms online with personal and financial details provided by investors and submitting these on the website of the ELSS Funds company whose scheme is being opted for.
  • The average time taken by us to get an SIP started for our customers who invest in ELSS Funds is never more than one day.
  • Once we have initiated the SIP investment procedure online we give our customers the log in details using which they can log into their ELSS Funds account on a daily basis and monitor their investment with efficiency.

No Extra Money to pay for Starting SIP’s

 There are no additional charges that are to be incurred by ELSS Funds investors who are looking to use SIP. An SIP can be started entirely for free even if an individual happens to be investing in several ELSS Funds online and wishes to opt for SIP to invest in each and every one of these funds in order to give his investment a good amount of structure and discipline.

Indeed the SIP’s manage to make ELSS Funds investments online a very organized affair ensuring that investors incur minimal losses even though the market may be volatile.

Stopping an SIP can also be carried out easily

  • The Systematic Investment Plan can be stopped as easily as it was started. Investors who feel no incentive to continue with their investment in an ELSS Fund or are unable to do so any longer can immediately stop their SIP’s.
  • We provide efficient services for stopping SIP’s for our clients in a quick and easy manner.
  • We also try to carry out the procedure of concluding an SIP in a way that no penalties are imposed on our customers and they are freed from their investment obligations as quickly as possible.

 Investing in ELSS Funds becomes hugely Affordable with SIP

 A huge benefit associated with the Systematic Investment Plan or SIP is the fact that it makes investing in ELSS Funds highly affordable for one and all. The average ELSS Fund in the market requires investors to invest at least 5000 INR to begin with.

By opting for SIP, investors can make such an initial investment by paying just 500 INR every week, month or in every financial quarter, depending on their convenience. If investors are eager to make a higher weekly, monthly or quarterly investment through SIP then they can do so in denominations of 1000 INR.

SIP Perfect for First Time ELSS Funds Investors

Retail investors in ELSS Funds as well as those who invest in ELSS Funds for the very first time are likely to find the SIP mode of transaction to be the most beneficial. People who have very little of the financial markets are often wary about making investments that can otherwise prove to be useful for them in the long run, but with SIP the risks commonly associated with ELSS Funds are very clearly averted.

By opting for the use of SIP investors are able to start investing with very small sums of money and thus avoid incurring huge losses in the initial stages of their investment.

Payments made in a Smooth and Efficient Manner using ECS

  • Investments that are made in ELSS Funds using SIP are done through ECS or Electronic Clearing System.
  • This is one of the most hassle free methods of carrying out financial transactions online. Investors can make their investments from the comfort of their own home or office.
  • Investors who entrust us with this responsibility are guaranteed to have their ELSS Funds investments made using SIP every week or in every month via ECS with an acknowledgement receipt being sent to them over email.

Precautions to take when investing in ELSS Funds online using SIP

A lot of attention has to be paid to the details that are required when completing paperwork that is necessary for signing up for SIP. If there are errors made in this respect, the entire application can get stalled by several months thereby creating huge delays in the possible financial progress of the prospective investor.

Care needs to be taken not to provide details that are too personal when carrying out the formalities for starting an SIP for ELSS Funds investment. This is one of the reasons why we prefer to carry out such work for our customers as we can easily avoid the mistakes that they would otherwise likely make.

Thus, it can indeed be quite a beneficial thing to be investing in ELSS Funds using SIP. The Systematic Investment Plan makes it possible for people from every walk of life to be a beneficiary of ELSS Funds investments online by allowing them to make investments at affordable rates.

Helpful Resources: How To Calculate Income Tax

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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