ELSS vs FD: Which is Better?

When planning tax-saving investments, ELSS and Fixed Deposits (FDs) are two popular options. But while both come under Section 80C, they cater to different investor profiles. ELSS is linked to the market and can generate higher long-term returns, while FDs prioritise capital safety and predictability.

Let’s simplify the decision—based on returns, risk, liquidity, and more.

Equity Linked Savings Scheme (ELSS) is a mutual fund that invests primarily in equity markets. These are eligible for tax deductions under Section 80C (up to Rs. 1.5 lakh per year) and have the shortest lock-in among tax-saving options—just 3 years.

But there’s a trade-off: ELSS returns are not guaranteed and depend on market movements. It’s ideal for investors comfortable with short-term volatility in exchange for the chance of long-term growth.

Key features of ELSS:

• 3-year lock-in period (lowest among 80C options)
• Market-linked returns
• Eligible for tax deduction under Section 80C
• Returns taxed at 12.5% (LTCG if gains exceed Rs. 1.25 lakh annually)

Prefer guaranteed returns over market risks?
Bajaj Finance Fixed Deposit offers predictable interest earnings with flexible tenure options. Your capital stays protected, and you earn steady returns—perfect for cautious investors. Open FD now and get up to 7.30% p.a. returns. 

A Fixed Deposit is one of the most trusted investment options for Indian households. You deposit a lump sum for a chosen tenure and earn fixed interest—unaffected by market changes. While tax-saving FDs have a 5-year lock-in, regular FDs offer flexible tenures with minimal risk.

Note: Bajaj Finance does not offer tax-saving FDs. However, its regular FDs can be structured to align with your goals using smart strategies like laddering and SDP.

Key features of FDs:

• Fixed interest rates, known at the time of booking
• Very low risk, with capital protection
• Interest income is taxable
• Lock-in (only for tax-saving FDs): 5 years

Want to build your savings monthly?
Try the monthly FD payout options from Bajaj Finance. Check latest rates.

Looking to balance safety and returns?
With Bajaj Finance FDs, you don’t need to compromise. Choose tenures that align with your short- and long-term goals, and enjoy assured returns with digital flexibility. Get up to 7.30% p.a. returns, Start an FD today!

If your top priority is protecting your capital and earning steady income, FDs are the safer bet. But if you can stay invested through market cycles and aim for inflation-beating returns, ELSS can work better in the long term.

ELSS suits goal-based investors who are okay with risk.
FDs are ideal for those who want stability without surprises.

Not sure how long to invest for?
With FD laddering, you can invest in multiple Bajaj Finance FDs with staggered maturities—giving you access to funds at different intervals while still earning attractive returns. Invest now!

• ELSS: Returns above Rs. 1.25 lakh per year are taxed at 12.5% as Long-Term Capital Gains (LTCG).
• FD: Interest is fully taxable as per your income slab. TDS applies if annual interest exceeds Rs. 50,000 (Rs. 1,00,000 for senior citizens).

While ELSS may offer better post-tax returns, especially for those in higher tax brackets, FDs offer peace of mind and guaranteed payouts.

Looking for a low-maintenance investment with stable returns?
Bajaj Finance FDs require zero active management. Choose your tenure and deposit amount once—and let your savings grow stress-free. Open FD.

When it comes to ELSS vs FD, there’s no one-size-fits-all. Choose ELSS if you're aiming for long-term growth and can handle market fluctuations. Choose an FD if capital safety, guaranteed returns, and low effort matter more to you.

And while tax-saving FDs come with a lock-in, regular fixed deposits from trusted NBFCs like Bajaj Finance offer flexibility, convenience, and stable returns—without the risk.