Bank of India ELSS Mutual Funds

Investment Objective 

Bank of India ELSS mutual funds are designed to give investors a chance to accumulate wealth over time. The fund’s primary investment objective is to invest in equities and equity-related derivatives in a specific proportion. After doing thorough research, the fund manager will choose high-quality equities to guarantee that the Bank of India ELSS mutual fund performance continue to meet expectations. The lock-in period for these funds is three years. Under Section 80C of the Income Tax Act, investors are qualified for a tax deduction of up to INR 1.5 lakh when they invest in Bank of India ELSS mutual funds. Investment is deducted from the investor’s taxable income, in this case, thus, reducing overall tax obligations.

Risks Involved in Bank of India Mutual Fund ELSS

When compared to debt funds and balanced funds, Bank of India ELSS mutual fund risk ranges from fair to high. The value of the fund may change as and when the price of the underlying stock does. Changes in the stock market’s price and volume, interest rates, currency rates, governmental policies, tax regulations, and other economic developments could all have an impact on the Bank of India ELSS mutual fund performance. These funds are less risky than pure small-cap/mid-cap funds and sector/theme-based funds because of their well-diversified portfolios. Moreover, if you invest over extended periods of time, the risks may average out. Before investing in the plan, investors may take into account their individual risk appetite.

Return Potential of Bank of India Mutual Fund ELSS

Bank of India Mutual Fund ELSS returns in the form of recurring dividend payments and capital growth. Increases in the underlying stock prices over a specific investment horizon lead to capital appreciation. The three-year lock-in period enables the fund manager to decide on asset allocation without worrying about frequent fund redemptions. Long-term returns might be higher as a result of this comprehensive strategy. Historically, Bank of India Mutual Fund ELSS returns range from 12% to 15% on average over a period longer than five years. However, Bank of India does not promise certain returns, and the performance of the fund may change over time. An aggressive investor can think about including a few small-cap or mid-cap funds in the total portfolio to increase returns.

Who Should Invest in Bank of India Mutual Fund ELSS?

For investors willing to take more risk, Bank of India Mutual Fund ELSS is the best option. Comparing these funds to other tax-saving options, their three-year lock-in term is the shortest. They are, therefore, perfect for long-term, tax-efficient wealth growth aiding investors to make long-term investments like children’s education, retirement planning, and property purchases. The investment must be maintained throughout the period in order to realise the full potential of these funds. 

Things To Consider Before Investing in Bank of India Mutual Fund ELSS

The following points must be considered when investing in the Bank of India Mutual Fund ELSS scheme.

• The amount that can be invested in ELSS is limitless. However, under Section 80C of the Income Tax Act, only investments up to INR 1.5 lakh will be eligible for tax breaks each financial year.
• One of the key goals of investment diversification is risk reduction. Professional fund managers manage your money to provide optimum Bank of India ELSS mutual fund returns.
• An investment is locked for three years. Once the lock-in period is over, an investor can access their funds.
• An investor can either invest monthly or all together at once. There is an availability of lumpsum option.

Tax on Bank of India Mutual Fund ELSS

If the investment amount in any financial year does not exceed 1,50,000 rupees, ELSS funds are eligible for tax exemptions under Section 80C of the Income Tax Act. Additionally, the interest generated through ELSS funds would be tax-free, provided the capital gains on investments were less than INR 1 lakh in a year.