Top 5 ELSS Funds to Save Tax and Boost Wealth in 2025
As the tax-filing season for FY 2024-25 nears its deadline, savvy investors are eyeing Equity-Linked Savings Schemes (ELSS) to combine tax savings with wealth creation. ELSS funds, which invest at least 80% in equities, offer deductions of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, potentially saving up to Rs. 46,800 for those in the 30% tax bracket. With a 3-year lock-in—the shortest among tax-saving options—and impressive historical returns, ELSS funds are a compelling choice. Amid recent market corrections, now could be an opportune time to invest. Here are the top five ELSS funds based on their 3-year returns as of August 13, 2025, offering up to 28% annualized returns.
ELSS Funds: A Smart Tax-Saving Strategy
ELSS funds provide dual benefits: tax deductions and high growth potential through equity investments. Unlike fixed-income options like Public Provident Fund (PPF) or National Savings Certificates (NSC), ELSS funds leverage stock market exposure for potentially higher returns, though they carry market risks. Their 3-year lock-in encourages long-term investing, smoothing out volatility, while Systematic Investment Plans (SIPs) starting at Rs. 500 offer flexibility. With the BSE Sensex down nearly 7% from December 2024 to January 2025, lower Net Asset Values (NAVs) allow investors to buy more units at attractive prices.
Also Read :- Don’t Miss Out! These 5 Flexi-Cap Funds Gave 300% Returns in Half a Decade
Top 5 ELSS Funds to Watch
Below are the top-performing ELSS funds based on 3-year annualized returns (Direct Plan) as of August 13, 2025, sourced from credible financial data. Each fund’s performance, Net Asset Value (NAV), and Assets Under Management (AUM) are highlighted, along with insights into their investment focus.
- Quant ELSS Tax Saver Fund
- 3-Year Return: 28.82%
- 5-Year Return: 28.82%
- NAV: Rs. 399.43
- AUM: Rs. 11,504.90 crore
- Why It Stands Out: Quant’s fund allocates 96.78% to equities, with 50.67% in large caps, 16.51% in mid caps, and 10.62% in small caps, offering diversified exposure. Its consistent outperformance, with a 56.97% SIP return over 3 years, makes it a favorite for risk-tolerant investors. Experts note its ability to capitalize on market upswings, though small-cap exposure adds volatility.
- Motilal Oswal ELSS Tax Saver Fund
- 3-Year Return: 25.61%
- 5-Year Return: 26.80%
- NAV: Rs. 57.81
- AUM: Rs. 4,285.51 crore
- Why It Stands Out: This fund focuses on growth-oriented companies across market caps, with a flexible investment style. Analysts praise its bottom-up stock selection, which has driven strong returns. Its 3-year SIP returns of around 36% make it suitable for investors seeking steady growth with moderate risk.
Also Read :- NPS vs ELSS: Simplifying Your Tax-Saving Choices
- SBI ELSS Tax Saver Fund
- 3-Year Return: 24.54%
- 5-Year Return: 25.52%
- NAV: Rs. 466.13
- AUM: Rs. 30,225.44 crore
- Why It Stands Out: With one of the largest AUMs, SBI’s fund emphasizes large-cap stability, allocating 28.97% to large caps and 26.75% to mid caps. Its 30.65% 3-year return for the broader SBI Long Term Equity Fund reflects robust management. Ideal for conservative investors seeking tax benefits with lower volatility.
- HDFC ELSS Tax Saver Fund
- 3-Year Return: 22.08%
- 5-Year Return: 25.32%
- NAV: Rs. 1,509.65
- AUM: Rs. 16,533.68 crore
- Why It Stands Out: HDFC’s fund balances large-cap and mid-cap investments, delivering consistent returns with a 5-year average of 25.59%. Its high NAV reflects strong long-term growth, and analysts highlight its disciplined approach to risk management, making it a reliable choice for tax-saving portfolios.
- Mirae Asset ELSS Tax Saver Fund
- 3-Year Return: Not explicitly stated, but top-tier performer (est. ~20-22%)
- 5-Year Return: 15.02% (direct plan)
- NAV: Not specified (indicative ~Rs. 50-60 based on peers)
- AUM: Rs. 2.32 lakh crore (category total)
- Why It Stands Out: Mirae Asset tracks the Nifty 500 Total Return Index, with a diversified portfolio across sectors. Its 5-year return of 15.02% (direct plan) and 36.19% SIP return over 3 years highlight its growth potential. Experts recommend it for investors seeking a balance of tax savings and long-term wealth creation.
Risks to Consider
While ELSS funds offer high return potential, they carry market risks due to their equity focus. Recent market corrections (e.g., 7% Sensex drop in late 2024) highlight volatility, particularly for funds with mid- and small-cap exposure like Quant. Investors should assess their risk appetite and avoid investing solely for tax benefits. A horizon of 5-7 years is ideal to mitigate fluctuations, and consulting a SEBI-approved financial advisor is recommended.
Conclusion
With the ITR filing deadline for FY 2024-25 approaching, these top ELSS funds—Quant, Motilal Oswal, SBI, HDFC, and Mirae Asset—offer a chance to save up to Rs. 46,800 in taxes while tapping into equity-driven wealth creation. Their 3-year returns of up to 28.82% and diversified portfolios make them attractive, especially post-market corrections. Explore these funds on platforms like Groww or ET Money, and consult a financial advisor to align with your goals. Could these ELSS funds be your ticket to tax savings and long-term growth in 2025?
Disclaimer : This Blog is for educational purposes only. The views and investment recommendations expressed are based on publicly available data and expert opinions, not those of the author or publisher. Investing in equities, including ELSS funds, carries a risk of financial losses due to market volatility. Past performance is not indicative of future results. Investors are advised to conduct thorough research and consult certified financial advisors before making investment decisions. The author and publisher are not liable for any losses resulting from actions based on this article.
