ELSS funds offer tax benefits under Section 80C and strong long-term wealth-creation potential.
Top performers such as SBI ELSS and Motilal Oswal ELSS have delivered returns of over 24% over 3 years.
A 3-year lock-in period encourages disciplined investing while providing exposure to equity market growth.
Equity Linked Savings Scheme (ELSS) mutual funds are popular in India, as they allow investors to save on taxes under Section 80C of the Income Tax Act. These funds also have the potential to grow wealth over the long term. When you invest in ELSS funds, you mainly invest in equities, with a 3-year lock-in period. This term is the shortest for tax-saving options under Section 80C.
Many ELSS funds have performed well in early 2026. This article will list the top mutual funds based on 1-year, 3-year, and 5-year returns and may provide consistent growth.
SBI ELSS Tax Saver Fund Direct - Growth has reported a 1-year return of 11.58%, while the 3-year return stands at 25.16%. The fund offers a 5-year return of 20.43%. The strong 3-year and 5-year performance shows steady portfolio management and great stock selection. This fund is best suited for investors who want stability and long-term returns.
Motilal Oswal ELSS Tax Saver Fund Direct - Growth has provided a 1-year return of 10.22% and a 3-year return of 24.29%. The fund invests in high-conviction stocks and applies concentrated investment methods. Even though the fund posted a 5-year return of 19.39%, slightly lower than the 3-year return, its consistency makes it a valuable option for tax-saving investments.
WhiteOak Capital ELSS Tax Saver Fund Direct - Growth has posted a 1-year return of 10.97% and a 3-year return of 22.51%. The fund is relatively new and has no 5-year profit information. WhiteOak has shown great performance in a shorter period, highlighting a strong portfolio and discipline.
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HDFC ELSS Tax Saver Fund Direct - Growth has provided a 1-year return of 12.99%, a 3-year return of 22.31%, and a 5-year return of 20.28%. The 1-year profit is among the highest on the list, and its long-term performance highlights its balanced approach. This fund has a long track record and is managed by experts.
DSP ELSS Tax Saver Fund Direct - Growth has gained 14.48% in one year, 21.89% in 3 years, and 18.57% in 5 years. The strong 1-year performance shows that the fund can make earnings through market rallies. The 5-year returns are competitive, showing DSP is a dependable choice.
ITI ELSS Tax Saver Fund Direct - Growth has recorded a 1-year return of 10.42%. However, the scheme has offered 21.47% profit in 3 years and 15.64% gains in 5 years. While long-term returns are slightly lower than those of other options, steady 3-year performance suggests improving consistency and stock selection.
Baroda BNP Paribas ELSS scheme has provided a 1-year return of 13.03%, a 3-year return of 21.07%, and a 5-year return of 15.27%. The recent 1-year return stands out, as it shows the fund can perform well during favorable market conditions.
JM ELSS Tax Saver Fund Direct - Growth has delivered 1-year, 3-year, and 5-year returns of 8.09%, 21.03%, and 16.69%, respectively. Though the 1-year returns are moderate, the longer-term returns show steady growth, which is important for building wealth over the long term.
HSBC ELSS Tax Saver Fund Direct - Growth has posted a 1-year return of 12.57%. The fund provided a balanced performance through different time frames with a 3-year return of 20.89% and a 5-year return of 16.56%. This shows disciplined investment and improved diversification.
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Franklin India ELSS Tax Saver Fund Direct - Growth has generated 1-year, 3-year, and 5-year returns of 8.33%, 19.59%, and 17.13%, respectively. The long-term performance is solid even though short-term returns are moderate.
ELSS funds are among the most efficient ways to save on taxes while building long-term wealth. Tax deduction, equity exposure, and a relatively short lock-in period make them suitable for investors planning for financial growth.
You should also consider consistent performance for 3 years and 5 years. With disciplined investing and patience, ELSS funds offer strong potential for both tax savings and meaningful wealth creation.
1. What are ELSS funds?
ELSS (Equity Linked Savings Schemes) are tax-saving mutual funds that invest mainly in equities and qualify for deduction under Section 80C.
2. What is the lock-in period for ELSS?
ELSS funds have a mandatory lock-in period of 3 years from the date of investment.
3. How much tax benefit is available through ELSS?
Investments up to ₹1.5 lakh per financial year are eligible for deduction under Section 80C of the Income Tax Act.
4. Are ELSS funds risky?
Since ELSS funds invest in equities, they carry market risk but also offer higher long-term return potential.
5. Can ELSS be invested through SIP?
Yes, ELSS funds allow both lump sum and Systematic Investment Plan (SIP) modes of investment.