Mutual funds are a great way to make money while you sleep. Yes, you invest in these schemes and the fund manager has the job to increase your money at least by double digits if not more, depending on the tenure of the investment. Among them is ELSS or Equity-Linked Savings Scheme. This is a type of open-ended equity mutual fund. ELSS mutual fund AMCs invest in equity and equity-related securities of companies. Apart from better returns, the equity mutual fund allows investors to enjoy income tax exemption benefit on investment up to Rs 1.5 lakh in one financial year. it also allows an investor to invest through a Systematic Investment Plan or SIP. However, ELSS mutual fund has a lock-in period of thee years and hence the investor will have to pay 10 per cent LTCG Tax after maturity. But, is it wise to withdraw money after the three years lock-in period is over?

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Speaking on whether one should withdraw money after three years lock-in of the ELSS mutual fund, Alok Aggarwal, Head — Research & Advisory at Bajaj Capital said, "An investor should choose ELSS mutual funds for the long-term time horizon. In the long-term, it gives at least 12 per cent returns and hence it is not wise to withdraw money after the completion of three years lock-in period. In fact, one should continue investing as it is a combination of beneficial equities chosen by the fund manager."

Highlighting the compounding benefit that one would get after investing for the long-term in an ELSS mutual fund, Manikaran Singhal, a SEBI registered tax and investment expert said, "If investors invest for more than 10 years or may be 20 years or above, then they would get the benefit of compounding on mutual fund interests. This means they would get interest on interest that would help one's money grow many folds in the long-term. So, it's not wise to withdraw money after three years of lock-in period in ELSS mutual funds."

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Suggesting how to grow one's money by investing in ELSS mutual funds, Alok Aggarwal said, "If an investor is investing in ELSS mutual funds to save income tax then one to two ELSS funds are enough. However, if someone wants to double one's income by avoiding income tax and higher returns, then one should have 3-4 ELSS mutual funds in one's portfolio."