How does 3 year lock-in period work in ELSS when investing via SIP?

Mridul Agrawal

Equity Linked Savings Scheme or ELSS is a type of mutual fund wherein a major portion out of the total fund is invested in equity and related products. As evident from the name of the scheme, it comes with a benefits attached to it, in the form of tax savings.

Lock- in : Unlike other mutual fund schemes, ELSS is different from the sense that there is a minimum lock-in period of 3 years in any/all ELSS schemes. Under ELSS schemes, pre-mature withdrawal is not allowed before the completion of lock-in period. 

An investor must keep in mind that funds invested in ELSS scheme (via lump-sum or via SIP) can only be withdrawn after 3 years from the date of investment. Therefore investments in ELSS should be planned accordingly.

You can have a look at the top tax saving ELSS mutual funds here.

Pijush Kanti Biswas

ELSS is a dedicated mutual fund scheme that allows investors to save tax. It also provides an opportunity for long term capital appreciation.

An SIP is an option of investing a fixed sum in a mutual fund scheme on a regular basis i.e. predefined regular interval. It is similar to regular saving schemes like a recurring deposit.

ELSS, being a tax saver fund have 3 years of lock-in period. i.e., it will give you very low liquidity as you cannot redeem your money before 3 years. If you are investing in ELSS through SIP, each installment can be redeemed after 3 years in the similar fashion.

For example: Say you bought units of ELSS mutual fund in January 2017 then it can be sold only after January 2020, not before that.

If you want to invest in ELSS, these are popular ELSS for 2017:

Happy Investing!


ELSS has A lock-in period of 3 years. It is applicable on each instalment paid. So for example, let's say you started an SIP in August 2017. The units of mutual fund bought in August 2017 can be sold in or after August 2020, not before that. Likewise, the units of mutual fund bought when you made your SIP payment in December 2017 can be sold in or after December 2020.

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