LIC Scheme: LIC MF's scheme is amazing, those who do SIP get Rs 1 crore by saving Rs 120 per day..
Saving just Rs 120 per day opened the way to becoming a millionaire. This is not a fictional story, it is the true condition of investment made in a mutual fund scheme. We are talking about the returns of Life Insurance Corporation (LIC)'s Equity Linked Saving Scheme (ELSS).
Usually, as soon as LIC is mentioned, the thought of insurance comes to mind. But along with being a giant company in the insurance sector, LIC also runs many mutual fund schemes. The performance of many of its schemes has been excellent. One such scheme is the LIC MF ELSS Tax Saver Fund. This is a 27-year-old scheme, which has given great benefits to its investors since its launch, that too with tax savings.
The journey from saving Rs 120 to Rs 1 crore
IC MF ELSS Tax Saver Fund has given an annualized return of 13.05% to those doing SIP in the last 27 years. That is, if someone had made a lump sum investment of just Rs 40,000 in this scheme 27 years ago and then started a monthly SIP of Rs 3,600 by saving Rs 120 per day, then the total value of his investment till now would have been Rs 1,00,03,281, that is, more than Rs 1 crore. You can check the complete calculation here:
Scheme giving good returns for 27 years
LIC MF ELSS Tax Saver Fund has consistently given good returns on SIP investments since its launch. You can see here how much return this scheme has given on SIP in the last 3 years, 5 years, 10 years, 15 years, and 20 years.
Features of Tax Saving Scheme
As the name of this scheme suggests, the LIC MF ELSS Tax Saver Fund is a tax-saving scheme. This means that investing in it gives the benefit of tax savings along with returns. This means that investment up to Rs 1.5 lakh in a year is eligible for tax exemption under Section 80C. If the units of equity funds are sold after holding them for more than a year, then there is no tax on the profit of up to Rs 1.25 lakh earned during a financial year. If the profit is more than this, then long-term capital gains tax has to be paid at the rate of 12.5%. Being a tax saving scheme, a lock-in period of 3 years is applicable on investments made in LIC MF ELSS Tax Saver Fund.
As per the rules, it is necessary to invest at least 80% of the corpus of an equity-linked savings scheme in equity. However, this scheme's investment in equity is much more than that. According to the latest data, currently, 97.1% of this scheme is invested in equity and 2.87% in cash or cash-like assets.
Launched on March 31, 1997, this scheme of LIC was earlier named Dhan Tax Saver '97. The benchmark of the scheme is Nifty 500 Total Return Index and the expense ratio is 2.13%. According to the updated data till August 23, 2024, the asset under management (AUM) of this scheme is Rs 1,185.12 crore.
Be careful before investing.
Being an equity-linked scheme, market risk is always associated with the investment made in this scheme. That is, the fluctuations in the stock market have a direct impact on it. Therefore, before making any decision about investing in it, check your risk-taking capacity properly. Also, keep in mind that the past returns of equity mutual funds cannot be considered a guarantee of similar performance in the future. Do not forget to consult your investment advisor before investing.
