Tax Saving Mutual Funds

Tax Saving Mutual Funds are a hot favourite among investors across ages when it’s time to filing taxes. Sadly,  working professionals often leave taxes to the last minute. This can be a costly mistake because it leads to poor investing decisions.

For example, it is a common tax-saving mistake to invest in a health or life insurance plan to save tax instead of choosing one based on personal needs.  Planning your tax-saving investments with the help of a professional wealth coach can be extremely useful.

In fact, tax-saving mutual funds can also create wealth over the long term. This is where Equity Linked Savings Schemes or ELSS funds come into the picture.

What Are Tax Saving Mutual Funds?

Equity Linked Savings Scheme or ELSS funds are tax saving mutual funds which offer a tax exemption of up to ₹1.5 lakhs under section 80C. ELSS funds are one of the best tax saving schemes because of their low lock-in period of 3 years. 

This is lower than the lock-in period of other tax saving options like PPF or Tax saving FDs. But ELSS funds go beyond saving tax. They are potentially one of the best options to create wealth over the long term.

How Do Tax Saving Mutual Funds Work?

ELSS funds invest in equity or stocks from across industries, sectors, and market caps. This allows for diversification, potentially high returns and reduced risk over the long term. 

The mandatory lock-in period of 3 years can help the investment grow and generate returns across different market phases. At the same time, there are tax benefits as well.

But it is important to invest ELSS funds based on your investment goals and risk appetite.

Benefits Of Tax Saving Mutual Funds

  • Low Lock-in Period: The 3-year lock-in period is better than other tax saving investment options. The dual benefit here is the magic of compound interest and tax exemptions.
  • Lucrative Post-tax Returns: Even after 10% taxation on returns above ₹1,00,000, ELSS funds give considerably better post-tax returns compared to PPF and Unit-linked Insurance Plans (ULIPs).
  • Comparatively High Returns: Since ELSS funds invest in equity, the returns range between 7-15%.
  • Ease Of Investing: With apps like Cube Wealth, you can invest in ELSS funds for as low as ₹1000.
  • Wealth Creation: ELSS funds create long term wealth with tax exemptions at the same time.

Top Tax Saving Mutual Funds In India

ELSS Tax Saving Mutual Funds

Mirae Asset Tax Saver Fund

Kotak Tax Saver Fund

(While we update our blogs regularly please refer to the Cube App)

ELSS Funds Vs PPF Vs Tax Saving FDs



ELSS Funds


Tax Saving FDs 

Lock-in Period

3 years

15 years

5 years






Tax-free up to ₹1 lakh

10% on gains above ₹1 lakhs

Principal, interest, and maturity amount exempted from tax (exempt, exempt, exempt category)

Tax-free up to ₹1.5 lakhs

Exemption Upto

₹1.5 lakhs

₹1.5 lakhs

₹1.5 lakhs

How To Invest In ELSS Funds Using Cube Wealth?

The Cube Wealth app gives you access to the best Tax saving ELSS funds. Our wealth advisor, Wealth First, curates a list of the best mutual funds every month for Cube users. 

Wealth First has a historical track record of beating the market by ~50% since 2002. WFs fund recommendations are based on the complex research of 12+ qualitative and quantitative parameters with a team of wealth professionals with over 250 years of combined experience. 

These recommendations ensure that you invest in options that can grow your wealth without wasting time. It also helps you avoid hard-selling agents or bank sales employees who care about their targets more than you.

But that’s not all. The Cube Wealth app also makes it easier for you to invest in ELSS funds through options like:

  • QuickSIP
  • SuperSIP

Your investments are not numbers on a spreadsheet or lines on a graph. They are your financial goals and efforts combined into one. So it's natural to have questions that only a human can understand and answer. 

That's why our wealth coaches have a 1-on-1 conversation with you. Once our wealth coaches understand your investment goals, risk appetite, timeframe, and other factors, they suggest investment options based on your needs. 

So Speak To A Wealth Coach today to know if you should invest in tax saving mutual funds or learn more yourself by Downloading the Cube Wealth App.

FAQs About Tax Saving Mutual Funds

  • Is there a minimum investment amount for ELSS funds?
    Ans. The minimum investment amount for ELSS funds on the Cube Wealth app is ₹1000
  • Are ELSS funds good for young investors?
    Ans. ELSS funds can be a tax-saving and wealth creation option for young investors. Speak to a wealth coach to know more.

  • Should investors beyond the age of 60 invest in ELSS funds?
    Ans. ELSS funds have tax exemption benefits and wealth creation perks which can be useful for investors over the age of 60.  

  • What is the minimum lock-in period for ELSS funds?
    Ans. 3 years. However, ELSS funds have known to give potentially high returns over 5+ years.

  • Are ELSS funds better than FDs?
    Ans. ELSS funds offer better post-tax returns compared to FD post-tax returns that barely beat inflation. The lock-in period is less but the risk is comparatively high. A Cube Wealth Coach can give you a better idea  

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