Best Tax Saving ELSS Mutual Funds to invest in 2024

Introduction to Best Tax-Saving ELSS Mutual Funds

Tax-Saving ELSS Mutual Funds offer a smart way to grow your money while enjoying tax benefits. These funds come under Section 80C of the Income Tax Act, making them a popular choice for tax-conscious investors. In this article we would talk about Best ELSS Mutual Funds to invest in 2024, how they work, who should invest and risk factors.

What is Tax Saving ELSS Mutual Fund?

ELSS stands for Equity Linked Saving Scheme. These ELSS or Tax Saving Mutual Funds invests in equity and provide income tax benefits u/s 80c. While there are many other tax saving instruments, ELSS has a unique feature of short lock-in period of 3 years.

Best ELSS Mutual Funds to invest in 2024 - Top 5 Tax Saving Funds in India

How Tax Saving ELSS Mutual Fund work?

  • These funds pool money from investors to create a diversified portfolio of stocks.
  • Fund managers strategically choose investments to maximize returns.
  • Investors enjoy tax benefits on the invested amount up to Rs. 1.5 lakh under Section 80C.

Benefits and advantages of investing in Best Tax Saving ELSS Mutual Funds

  • Short Lock-In Period: ELSS funds have a lock-in period of only three years, providing liquidity compared to other tax-saving options.
  • Diversification: They invest across market caps and sectors, reducing risks.
  • Potential for Better Returns: Historically, ELSS funds have outperformed traditional options like PPF or bank FD.

What are the risks of investing in ELSS Funds?

  • Market Volatility: ELSS funds, being equity-linked, can be subject to short-term market fluctuations.
  • Lock-in period: These ELSS funds come with 3 years lock-in period. Investors cannot do premature withdrawal from such funds.
  • Long-Term Focus: The potential for higher returns comes with the need for a more extended investment horizon.
  • How did we short list these Tax Saving ELSS Mutual Fund?
  • Rolling Returns: Consistency in returns over the last three years and last 5 years
  • Downside Risk: Funds that does not fall under negative returns category.
  • Asset Size: Considered funds with AUM above Rs. 100 crore.

Top 5 Tax Saving ELSS Mutual Fund for 2024

Here are the list of top 5 ELSS Fund and their annualised returns.

Funds 3 Yr 5 Yr 10 Yr
Quant ELSS Tax Saver Fund 34.9% 30.7% 25.9%
Bank of India Tax Advantage Fund 25.2% 24.8% 19.8%
Mirae Asset ELSS Tax Saver Fund 21.6% 20.6% NA
Canara Robeco ELSS Tax Saver Fund 20.7% 20.2% 17.6%
Union ELSS Tax Saver Fund 21.7% 19.4% 15.1%

These funds have been filtered based on the past performance, rolling returns, SIP returns and AUM above Rs 100 Crores. 

Who should invest in these Best Tax-Saving ELSS Mutual Funds for 2024?

  • Salaried Individuals: Ideal for balancing risk and returns, especially if you contribute to fixed income options like EPF and want to save tax u/s 80c.
  • First-Time Investors: Great for newcomers, providing exposure to equity investing along with tax benefits.

How to invest in Tax Saving ELSS Mutual Fund for 2024?

  • Register Online: Sign up on the AMC website or any other third party MF aggregator portals like Groww, ETMoney or Kuvera.
  • Choose ELSS Fund: Head to the Mutual Funds section and select the ELSS fund of your choice.
  • Invest: Specify the investment amount and mode (SIP or Lumpsum).
  • Provide KYC Details: Furnish your PAN number and bank details to complete the investment if you are first time investor. If you have already invested earlier, you would not be prompted with KYC info.

Comparison of ELSS Vs Other tax saving schemes

ELSS Funds vs. Tax Saving Fixed Deposits:

  • Returns: ELSS offers higher returns (15-18%) compared to fixed deposits (7-8%).
  • Lock-In Period: ELSS has a shorter lock-in of 3 years, while fixed deposits have 5 years.

ELSS Funds vs. Public Provident Fund (PPF):

  • Returns: PPF offers lower returns (7-8%) but it is tax-free income. Returns from ELSS Funds are taxable.
  • Lock-In Period: PPF comes with a longer lock-in of 15 years compared to ELSS lock in period of 3 years.

ELSS Funds vs. National Pension System (NPS):

  • Returns: NPS offers returns of 8-12% until retirement.
  • Lock-In Period: NPS has no specific lock-in; it continues until retirement compared to 3 years lock-in period of ELSS funds.

FAQs on Best Tax-Saving ELSS Mutual Funds for 2024

What is the lock-in period in ELSS?

Lock-in period refers to the time for which the investments would be locked and withdrawals / premature withdrawals not possible. In case of ELSS the lock-in period is 3 years.

What is the maximum tax benefit that can be availed by investing in ELSS?

By investing in ELSS funds, investors can avail tax benefit of Rs 1.5 lakhs u/s 80C of the income tax act. Any incremental amount above 1.5 lakh, would not quality for tax benefit.

Who should not invest in ELSS Funds?

If you are short term investor and looking for short term gains, then you cannot invest in such funds as such funds. While there is 3 years lock-in period, one may not get good returns during such period.

Should I invest in 2 or 3 ELSS Funds?

Not all ELSS funds are same. If you are not investing in any other mutual funds, you can consider investing in 2-3 ELSS funds. If you are already investing in other equity funds selecting 1-2 funds can make your mutual funds portfolio smaller.

Is ELSS Taxable after 3 years?

ELSS funds have lock-in period of 3 years and provide tax benefits u/s 80c. However after 3 years, after redemption, if there are any capital gains, such returns are taxable.

Best ELSS Funds as per Value Research

ValueResearch Online provides ratings for all mutual funds. Below are the top rated (5 Star and 4 Star) ELSS funds as per ValueResearch.

  • Bandhan ELSS Tax Saver Fund
  • Kotak ELSS Tax Saver Fund
  • Parag Parikh ELSS Tax Saver Fund
  • Quant ELSS Tax Saver Fund
  • Canara Robecco ELSS Tax Saver Fund
  • DSP ELSS Tax Saver Fund
  • Mirae Asset ELSS Tax Saver Fund
  • Motilal Oswal ELSS Tax Saver Fund
  • PGIM India ELSS Tax Saver Fund
  • SBI LT Equity Fund

Best ELSS Funds as per Monecontrol

While Moneycontrol does not provide direct ratings for the mutual funds, it provides Crisil ratings and various other metrics. Below are the top CRISIL rated (Rank-1) ELSS funds.

  • Bandhan Tax Advantage Fund
  • HDFC Tax Saver Fund
  • SBI Long Term Equity Fund
Suresh KP


  1. Can you please share the top recommended mutual funds to invest in 2024 from largecap/midcap/smallcap categories. Thanks Saikat

  2. Good .I like ur writing very much. Thank u sir. Kindly write about a comparison between small cap fund and small cap index fund. I want to know which is better. Small cap fund or small cap 250 or 50 small cap index fund.

    Thank u

Leave a Reply

Your email address will not be published. Required fields are marked *