Investors often seek investment opportunities that help generate wealth, provide regular returns, and offer tax savings. While numerous investment schemes are available in the market, many of them have returns that are subject to taxation according to Income Tax rules. This is where Equity-Linked Savings Schemes (ELSS) come in. ELSS mutual fund is a tax-saving equity mutual fund which offers significant advantages to investors. Here is a guide to investing in ELSS funds with the help of a mutual fund app.
What Are ELSS Funds?
ELSS funds are equity funds that invest a significant portion of their corpus in equity or equity-related instruments. These funds are also called tax-saving schemes since they offer tax exemption of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. An ELSS fund is an equity-oriented plan that requires a three-year lock-in period. To receive tax benefits, a large number of taxpayers have resorted to ELSS programs.
Choosing the Right Mutual Fund App
When selecting a mutual fund app to invest in ELSS, consider the following factors:
- User-Friendly Interface: The app should have a clean and intuitive interface, making it easy to navigate and understand.
- Range of Funds: Ensure the app offers a wide selection of ELSS mutual funds from various fund houses.
- Security: Look for apps with robust security features to protect your personal and financial information.
- Additional Features: Some apps provide additional features like portfolio tracking, personalised recommendations, and educational resources.
- Customer Support: Reliable customer support can help resolve any issues or queries you may have.
Top Mutual Fund Apps for Investing in ELSS
Here are some popular mutual fund apps that make investing in ELSS easy and convenient:
- Coin by Zerodha: This app allows you to purchase mutual funds directly from asset management companies without commission fees. It features a user-friendly interface and offers demat account opening with minimal documentation.
- ET Money App: ET Money provides a range of financial products, including ELSS mutual funds, insurance, and SIPs. The app offers personalized investment recommendations and integrates with popular payment apps like GPay, PhonePe, and Paytm.
- Paisa: An all-in-one platform for stock market trading, derivatives, commodities, mutual funds, and IPOs. It is suitable for both beginners and experienced traders, providing essential tools for staying ahead in the share market.
- Tata Capital Moneyfy: It is an app that allows users to invest in ELSS funds to avail of tax benefits and growth. It is a secure platform regulated by SEBI. With this mutual fund app, you can analyse, compare and track your investment easily.
- Groww: Known for its minimalistic design and user-friendly interface, Groww offers over 5000 mutual fund schemes along with additional investment options like digital gold, US stocks, and fixed deposits.
Step-by-Step Guide to Investing in ELSS Through an App
Mutual fund apps like SIP and ELSS can help you invest in the fund based on your investment goals and risk tolerance. To avail of ELSS fund benefits, you can invest in the fund by following the below-mentioned steps:
- Download and Install the App: Choose a mutual fund app from the list above and download it from the Google Play Store or Apple App Store. Install the app on your smartphone.
- Sign Up and Complete KYC: Open the app and sign up by providing your email address and creating a password. Complete the Know Your Customer (KYC) process by submitting the required documents such as your PAN card, Aadhaar card, and a passport-sized photograph. Most apps allow you to complete KYC online.
- Explore ELSS Funds: Once your account is set up, navigate to the mutual funds section and search for ELSS funds. You can filter the funds based on various criteria such as past performance, fund manager expertise, and risk profile.
- Select an ELSS Fund: Choose an ELSS fund that aligns with your investment goals and risk tolerance. Review the fund’s performance history, investment strategy, and other relevant details.
- Choose Investment Mode: Decide whether you want to make a lump sum investment or set up a Systematic Investment Plan (SIP). SIP allows you to invest a fixed amount regularly, making it easier to stay disciplined and benefit from rupee cost averaging.
- Make the Investment: Enter the amount you wish to invest and complete the payment process using your preferred payment method. The app will guide you through the steps to finalize the transaction.
- Stay Informed: Keep yourself updated with financial news, reports, and fund updates through the app. Regularly review your portfolio and make adjustments as needed to stay aligned with your investment goals.
Conclusion
Investing in ELSS mutual funds through a mutual fund app is a convenient and efficient way to grow your wealth while enjoying tax benefits. By understanding the basics of ELSS, choosing the right app, and following a disciplined investment approach, you can make well-informed decisions and build a robust investment portfolio. Embrace the power of technology and start your ELSS investment journey today to secure your financial future.