SIP (Systematic Investment Plan) is the investment option through which you can invest in mutual funds in regular installments, which can be made weekly, monthly, quarterly, or semi-annually.
ELSS (Equity Linked Saving Scheme) is a tax-saving equity mutual fund that invests mainly in equities. It qualifies for tax deductions under Income Tax Act, 1961, Section 80C.
n SIP, you can change the installment amount at any time, which means you can decrease or increase it based on your analysis.
ELSS helps you change the installment amount if you invest with SIP like any other mutual funds investment.
SIPs in mutual funds have varied risks; equity funds are riskier than debt and hybrid funds.
ELSS funds, like other equity funds, have similar risks such as market and concentration risks.
The returns provided by SIP are not fixed and are totally dependent on which type of fund it is.
ELSS funds can provide average returns of 12% to 15% over three years. But they do not provide guaranteed returns.
SIP is ideal for investors who have different financial goals ranging from short to long-term.
ELSS fund is ideal for investors looking to invest in a long-term investment.