How to redeem ELSS Mutual Fund? How To Redeem ELSS Mutual Fund?


  Mutual funds are a great way of investing. Investors who are new and do not have time to understand the market, then those investors can take advantage of the returns of the stock market by investing in mutual funds. There are many types of mutual funds , equity funds, debt funds, flexi cap funds and hybrid funds . We can invest in all these funds through SIP or LUMPSUM . In this article we will talk about redemption redemption of ELSS-Equity Linked Savings Schemes . Along with the benefits of investing in this fund, we can save tax under section 80C. If we make this investment in equity fund then the return can be even higher. This fund has a lock in of 3 years.But can you redeem it after 3 years? Let us know in detail, how to redeem our ELSS fund.

How to redeem lump sum investment?

When you invest with Lump Sum amount, your lock in time is calculated from the day you buy the fund. You can redeem your entire investment after 3 years. Let's understand it with an example.

If you have invested 1 lakh together on 10 August 2022, then your lock in time will end on 11 August 2025 and you can withdraw your entire money. You can redeem yours online from the website or from the app. Another way is that you can go to the branch of the mutual fund and give an application to redeem the fund.

The advantage of investing in LUM SUM or whole money together is that you can redeem the tax saving fund only after 3 years. The returns in Equity Funds will depend on the trend of the market at the time of your investment and what was the price of your NAV. SIP investment redemption process is completely different and its returns are also different from lump sum investments.

How to redeem mutual funds in SIP investment.

The process of redemption of SIP investment is a bit difficult to understand. If we compare it with LUMP SUM investment then its redemption will be completely different. In SIP each of your installments will be considered as a separate investment or each of your installments will be considered as a new investment. The lock in time for each installment will be 3 years. This time will be counted from the day you receive the Mutual Fund units.

Let us understand it with an example. Suppose your installment of 5000 goes to a tax saving mutual fund every month from 5th April 2019. So you can redeem your investment or this installment on 6th April 2022 only.

Let us understand this in detail with the example of monthly SIP.

Let's understand it in detail through this 5000 SIP. The calculation given below is for example only. The returns of mutual funds depend on the market.

Date of SIPunit priceUnits allottedDate of Redemption
Jan 5, 202045111.11Jan 6, 2023
Feb 5, 202046108.69Feb 6, 2023
Jan 5, 202047106.38Mar 6, 2023
Apr 5, 202048104.16Apr 6, 2023
May 5, 202049102.04May 6, 2023
Jul 5, 202050100Jun 6, 2023

Fund tax saving or any other benefit is always long term. If the fund is to be redeemed in a short period of time, it should always be in profit. In tax saving funds, this short period is more than 3 years. And the redemption time depends on whether the investment is through, LUMP SUM or SIP.


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