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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information

Which statement about an Equity Linked Savings Scheme (ELSS) is correct?

ELSS units have a lock-in of three years from the date of allotment, and each SIP instalment is locked in separately. The five-year lock-in applies to tax-saving bank deposits, not ELSS, and ELSS has no requirement to invest only in large cap stocks.

  1. AIt has a lock-in period of 3 years from the date of allotment of each unitCorrect
  2. BIt has a lock-in of 5 years like the bank tax-saving fixed deposit
  3. CIt can be redeemed any time after 1 year with no restriction
  4. DIt must invest at least 80% in large cap stocks

Explanation

ELSS units carry a 3-year lock-in from the date of allotment, which applies to each SIP instalment separately. The 5-year lock-in belongs to tax-saving bank fixed deposits, and ELSS has no large-cap-only mandate; it must invest at least 80% in equity and equity-related instruments.

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