Investing
ELSS vs Tax-Saving FD
Both save 80C tax. Only one beats inflation. Run a 5-15 year comparison and see the actual delta.
Your numbers
₹
years
%
% p.a.
% p.a.
Your result
₹82,643
Both ELSS and the 5-year tax-saving FD give you a ₹45,000 tax saving up front. Over 5 years on ₹1.5 lakh: ELSS grows to ₹2.76 lakh gross, net ₹2.76 lakh after LTCG tax. FD grows to ₹2.12 lakh gross, net ₹1.94 lakh after slab tax. ELSS wins by ₹82,643.
Tax-saving FD ends at₹1.94 lakh
ELSS ends at₹2.76 lakh
- Year 0 tax saved (both)
- ₹45,000
- ELSS net value
- ₹2.76 lakh
- Tax-saving FD net value
- ₹1.94 lakh
- ELSS advantage
- ₹82,643
- ELSS LTCG tax paid
- ₹171
- FD interest tax paid
- ₹18,665
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See PPF for the same money
PPF is the third 80C option: lower return than ELSS but fully tax-free and 15-year lock. Worth comparing if you can spare the long-term liquidity.
Open it
Side-by-side, the honest way
- ELSS: 3-year lock-in. Long-run returns 12-15% gross. LTCG at 12.5% above ₹1.25L exempt. Behaves like a flexi-cap fund inside the tax wrapper.
- Tax-Saving FD: 5-year lock-in. Returns 6.5-7.5% gross. Interest fully taxable at slab each year. No real-return cushion above inflation for high-bracket investors.
Picking the right ELSS fund
- Direct plan only. Expense ratio under 1% ideally.
- 10+ year track record, ideally across at least 2 bull-bear cycles.
- Top-quartile rolling 5-year returns, not just point-in-time NAV.
- AUM above ₹2,000 crore (avoid very small or very large funds).