ELSS - Equity Linked Savings Scheme

This is the fourth post of the series and covers ELSS.

1. What is ELSS?

ELSS stands for Equity Linked Savings Scheme.

Unlike PF, PPF and FDs, ELSS invests money in equity market.

ELSS are almost same as Mutual Funds.

Dividend reinvestment option should be avoided as every time dividend is reinvested, dividend's lock in period starts from there.

Dividend payout option can be useful because dividend paid out is actually tax free.

SIP can be done for ELSS.

2. What is interest rate of ELSS?
As ELSS invests in Equity market, there is no guaranteed return. Return varies depending on Fund's performance and investment has risk.

3. What is the lock in Period?
Lock in period is 3 years.

4. How to get the money back?
After lock in period money can be refunded back to main account.

5. Is interest accrued on savings is Taxed?
Dividend paid out is tax free but other gains are taxed.

Further Reading:
List of ELSS Funds