Fixed Deposit vs ELSS: A Risk Evaluation Fixed deposit vs ELSS: A risk evaluation

Fixed deposit vs ELSS: A risk evaluation
The fixed deposit (FD) and the equity-linked savings scheme (ELSS) are investment options.
But which is riskier? And which one brings better returns? Let’s take a look:
What is an FD?
– An FD is an investment scheme
– You deposit money in an FD account for a specific time
– The money earns a fixed rate of interest during the
investment period
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– At the end, you get your principal investment back
What is an ELSS?
– An ELSS is an equity-based mutual fund
– It invests in equities or equity-based products
– You can invest a lump sum or through a systematic
investment plan (SIP)
Which option saves tax?
– An ELSS is a tax-saving investment scheme
– You get a tax deduction of up to Rs.1.5 lakh
– You can also save tax using a tax-saver FD
– Get a tax deduction of up to Rs.1.5 lakh through 5-year FDs
Difference in lock-in periods
– Tax-saver FDs have a lock-in period of five years
– An ELSS has a shorter lock-in period of three years
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