Hello,
I am new to Zerodha & having the basic knowledge of trading/mutual funds.
I am having a confusion. While investing in ELSS funds for tax saving purpose whether it will be better to invest in SIP or should I do it in lump sum amount? Which among these two will be better?
Going the SIP route is always the better way for long-term wealth accumulation, whether ELSS or not. There are many articles online to give more insight on this, start here and look for more.
Going for an ELSS is good if you want to save tax. But for a long-term investment plan, I think you must have a SIP.
Keep aside a part of the money intended for mutual funds every month, either in a liquid fund or a money manager fund. And continue with your SIPs. Because SIPs are the kings of compounding and averaging. But a wise man will also make a lumpsum purchase along with his running SIPs whenever there is a big market fall. This gives you a much better average. Use the funds kept aside in the money manager funds to make this lumpsum purchase. Ofcourse, this requires you to be proactive and follow the markets a bit. But in the case of SIP, it will completely do the job for you.