What ELSS, if not fixed deposits?

Equity-linked savings schemes (ELSS) help you save tax. But, so do tax-saver fixed deposits (FDs). What should you opt for?

The answer depends on your risk profile. But, before that, let’s take a look at what each offers, and entails. Investments in both ELSS and tax-saving FDs of up to ₹1.5 lakh per financial year qualify for tax deduction under Section 80C. ELSS primarily invests in equities. On the other hand, tax-saving FDs are fixed income instruments offered by the post office and banks. Apart from being different asset classes, ELSS and tax-saving FDs also differ widely in terms of product features and taxation of returns.