Where should you Invest ELSS or BANK FD

Talking about the returns the returns on the FD's are guaranteed and in the case of the ELSS they are linked to the market and hence perform in line with the market.

A lot of people think the FD may be a wise investment because it has a guaranteed return but in case you have the appetite to wait for a five-year period I would urge you to consider making investment into the ELSS because your FD return would not possibly even beat inflation.

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The whole idea of making investment over a long period of time such as five years or beyond should be not only

to get good returns
but also primarily should be to beat inflation.

The tax efficiencyof each of these it is extremely important to note that your FD's if they are for a period of three years or five years or even beyond the interest is taxable every year which means at the time of filing your returns you have to declare the interest accumulated on your FD and it is taxed as per your regular tax lab in the case of ELSS any profits crossing one lakh rupees are taxableat ten percent irrespective of your age of your income or otherwise.

As per liquidity concern your ELSS investments are free for you to withdraw after a three-year period however I would insist that you at least hold on to it for five years to see one cycle performance in the case of FD's as mentioned earlier they have a lock-in period of five years.