Top Mutual Funds for Monthly Investments of 5000 INR for 3 Years with Tax Exemption

Investing 5000 INR every month for a period of three years can be a wise choice for financial growth and tax savings. Given the nature of your investment horizon and the need for tax exemptions, it is important to carefully select the right mutual funds. In the subsequent sections, we will explore the best options available, considering both the shorter-term (3 years) and longer-term (10 years) outlooks. We will also discuss the best-performing funds in the past, along with specific recommendations for your monthly investment.

Choosing the Right Mutual Funds for Your Goals

Your investment should align with your future needs. If you need the corpus in the next three years, it is advisable to opt for low-volatility funds. For a longer period—10 years or more—equity funds like large-cap and multi-cap funds would be more suitable.

High-Performance ELSS Mutual Funds

For tax savings within the 3-year lock-in period, the following ELSS (Equity Linked Saving Schemes) mutual funds are highly recommended:

IDFC Tax Advantage ELSS Fund - Direct Plan G

Remarkable returns over 48% in the past four years Consistent performance since 2019

DSP BlackRock Tax Saver Fund - Regular G

Substantial returns of over 45% since 2014 Superstar fund with a solid track record

Aditya Birla Sun Life Tax Relief 96 G

Formerly known as Birla Sun Life Tax Relief Fund Consistent performance with returns over 45% since 2014

ICICI Prudential Long Term Equity Fund Tax Saving - Direct Plan G

Significant returns of over 42% in the last four years Strong performance

Investment Allocation Strategy

Given the varying performance of these funds in recent years, a balanced approach is recommended. You can allocate your monthly investment as follows:

Rs. 2000 in ICICI Prudential Rs. 1500 in IDFC Tax Advantage ELSS Fund Rs. 1500 in Aditya Birla Sun Life Tax Relief 96 G

ICICI Prudential has been the best performer off late, especially from September 2017 onwards. IDFC Tax Advantage ELSS Fund and Aditya Birla Sun Life Tax Relief 96 G have also shown consistent performance in this period.

Other Top ELSS Mutual Funds

While the above-mentioned funds are top-performing ELSS mutual funds, there are other high-performing options available in the market. Consider the following:

Axis Long Term Equity Fund - ELSS

Solid performance in the ELSS category Consistent returns in the long term

IDFC TAX ELSS

Strong performance in ELSS funds Competitive returns

Conclusion

Investing 5000 INR monthly for three years with a focus on tax savings can be highly beneficial with the right strategy. The funds mentioned above have demonstrated strong performance, ensuring a good chance of financial growth while providing tax relief. It is important to read the fund's historical performance, fees, and associated risks before making investment decisions. Mutual funds are subject to market risks, and past performance is not a guarantee of future returns.