Introduction
ELSS, or Equity-Linked Savings Schemes, is an effective option for both tax savings and building wealth. It has a lock-in period of only three years but offers returns that beat inflation, making it a popular choice among wise investors. This post delves into the top ELSS funds for 2025 and the reasons they should be included in your portfolio for wealth creation.
Why Choose ELSS Funds?
Here’s why ELSS funds are the ultimate tax-saving investment:
Save Taxes
Get tax deductions of up to ₹1,50,000 under Section 80C of the Income Tax Act, 1961.
Shortest Lock-In
With only a three-year lock-in period, ELSS beats other 80C investments like PPF or FDs.
High Growth Potential
Invest in equities for returns that can outpace inflation.
Start Small: Begin your investment journey with just ₹100 per month through SIP.
Top ELSS Funds for 2025
Here are the standout ELSS funds that offer both high returns and tax benefits:
Quant ELSS Tax Saver Fund Direct-Growth
3-Year Return: 13.56%
5-Year Return: 30.21%
The Quant ELSS Tax Saver Fund is a promising investment option for 2025 as it diversifies its portfolio by focusing on high-growth sectors. Notable holdings include Reliance Industries, JIO Financial Services, Samvardhana Motherson, Adani Power, LIC, Larsen & Toubro, Grasim Industries, and Aurobindo Pharma.
Bank of India ELSS Tax Saver Direct-Growth
3-Year Return: 14.43%
5-Year Return: 23.53%
The fund is designed for moderate-risk investors, as it aims to achieve both growth and stability. It has prominent positions in companies such as HDFC Bank, State Bank of India, Vedanta, Coforge, Swan Energy, NTPC Green Energy, General Insurance Corporation, and ICICI Bank.
SBI Long Term Equity Fund Direct Plan-Growth·
3-Year Return: 21.33%
5-Year Return: 23.43%
This fund maintains a reliable track record and invests in companies such as HDFC Bank, Reliance Industries, ICICI Bank, Bharti Airtel, Torrent Power, Mahindra & Mahindra, Tata Steel, ITC, and Tech Mahindra. Its diverse portfolio promotes well-rounded progress.
Parag Parikh ELSS Tax Saver Fund Direct-Growth
3-Year Return: 16.33%
5-Year Return: 23.23%
The fund’s investment approach is focused on long-term growth and consists of a combination of large and mid-cap equities. Notable assets in the portfolio include Bajaj Holdings, HDFC Bank, Power Grid Corporation, Coal India, ITC, ICICI Bank, Maharashtra Scooters, HCL Technologies, Infosys, and Maruti Suzuki. This strategic approach guarantees consistent returns for investors.
Motilal Oswal ELSS Tax Saver Fund Direct-Growth
3-Year Return: 22.21%
5-Year Return: 22.61%
With a disciplined approach, this fund’s portfolio includes industry leaders such as Bajaj Holdings, HDFC Bank, Power Grid Corporation, Coal India, ITC, ICICI Bank, Maharashtra Scooters, HCL Technologies, Infosys, and Maruti Suzuki. It is a strong contender for long-term growth and tax savings. ELSS mutual fund schemes invest in a diverse range of stocks across different sectors and market capitalizations to ensure adequate diversification and risk management. Funds like Quant and Motilal Oswal ELSS strategically include top-performing companies such as HDFC Bank, Reliance Industries, Infosys, and ITC while also maintaining exposure to mid-cap and small-cap equities. This well-rounded strategy guarantees balanced growth and reliable returns.
How to Pick the Right ELSS Fund?
Historical Performance
Look at 3 and 5 year returns for consistency.
Experienced Managers
Opt for funds managed by seasoned professionals.
Expense Ratio
Lower expenses mean higher take-home returns.
Risk Appetite
Align the scheme fund strategy with your risk tolerance.
Investment Horizon
Aim for a horizon of at least 5 years to smooth market volatility.
Start Your ELSS Journey Today!
With ELSS funds, you can experience the best of both worlds – tax savings and long-term wealth creation. These funds, known to offer solid returns and diversified portfolios, are among the top choices for investors in 2025. Whether you are a beginner or an experienced investor, ELSS can help you reach your financial objectives. Don’t hesitate, take the first step towards securing your future with EquityBox!