ELSS is an open-ended Equity Mutual Fund that not only is great for tax saving purposes but also creates growth opportunity for your investment. These schemes are promoted by the Government of India to inculcate a habit of long-term investment among people. As is evident from the name, the major portion of the fund in Equity Linked Savings Schemes is invested in equities or equity-related products. When you plan on making equity investments it is a wise decision to determine the performance of the investment prior to investing. This can be done by a tool referred to as an ELSS Calculator.
What is an ELSS Calculator?
An ELSS calculator is an extremely helpful tool that plays an important role in helping you make the right decisions with regards to choosing the best investment in an ELSS scheme. T=You will be able to evaluate how effective or not an investment will be. Depending on the type of scheme you choose, there are a number of ELSS Calculators that you can make use of.
ELSS Calculator: SIP
Systematic Investing in mutual funds is a great way of avoiding any pitfalls of investing in equities. It also serves well with high returns. Small investments over the course of regular intervals yield a good return over the longer period of time. In fact, SIP has become one of the more popular choices of investment with its disciplined format. It ensures a large investment corpus with very little investments made periodically where the funds are managed by professional managers. If you are interested in investing in SIP, it is crucial to understand and estimate what your investment will be worth at the end of the tenure of your SIP. This number can be obtained through an ELSS SIP calculator that gives you the returns offered by your SIP, be it equity, debt or hybrid funds. The ELSS SIP Calculator would require the investor to populate details like the amount of the investment, the tenure of the SIP, the expected rate of returns, etc. The calculator, based on these details, will be able to generate an estimated rate of return for your investment.
If you plan on investing INR 5000 a month for 12 months with an expected rate of return of 15%, the ELSS SIP Calculator will be able to calculate the maturity value of your SIP. Your cumulative investment will be worth INR 60,000 (INR 5000*12 months). The maturity value of this SIP will be INR 65106. The ELSS SIP calculator is very much dependent on the input that is provided by the user, therefore, it should be taken as an estimate and not as an absolute value. Factors like inflation also come into play in the determination of the maturity value of the SIP, nor is there a provision to factor in tax benefits. This tool nonetheless is a vital input in the getting an estimate for your investment.
ELSS Calculator: Lump Sum
Like an ELSS Calculator, the Lump Sum Calculator helps investors figure what a said amount of investment in an ELSS, given a certain time period and a specific rate of interest, would result in at maturity. The calculator takes into account the above mentioned data and gives you the expected value of your investment. Important aspects to take note of include is the lock in period of your investment which usually manadates a minimum of 3 years. The results you derive from the ELSS Lump SUm Calculator will not factor in the aspects of tax in the calculation.
If you wish to invest a lump sum amount of INR 50,000 for 60 months at an annualized interest rate of 15%, the calculator will generate a value of INR 1,00,568.
Again, it is important to note that the calculator generates results based on the input provided alone and does not factor in the market conditions.
ELSS Calculator: Past Performance of SIP work?
The Past Performance SIP Calculator is a significant tool in providing insights on the historical performance of your SIP. The calculator takes into account certain details like:
i. SIP investment amount
ii. Starting month and year of the SIP
iii. Maturity month and year of the SIP
iv. Valuation date
v. Name of the Asset Management Company
With the above details, an ELSS SIP Past Performance Calculator will generate an estimate of how much your SIP investment will be worth at the time of maturity. Such an evaluation is a good means to determining how a fund performs during different market cycles. The long run performance is also a good insight into gauging where the fund might be heading in terms of future prospects. Though it must be clarified that past performances are no guarantee to the returns in the future, they do however help by showing how the fund held up during adverse market conditions.
ELSS Calculator:Best ELSS: Tax Saving Funds Based on 5 Year Returns
The following table enlists some of the top Equity Linked Savings Schemes, based on their performance over the course of 5 years.
The returns are based as on June 7, 2018.
An ELSS calculator will provide you the estimation of how much your fund will be worth or how much you need to invest each month to reach a certain target. The past performance calculator will shed light on how the fund has fared historically, but neither of the calculators can be taken to be absolute in their value as the market conditions are not factored in the calculation. It is merely for the investor to gather insights to make investment decisions.
The list provided here has been compiled based on market research and is endorsed by Clear Tax Invest in any way. Users are recommended to seek financial guidance before making any investments.