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Best ELSS Funds vs PPF — 2026 Guide

The ultimate tax saving showdown. Compare top ELSS mutual funds with PPF for returns, risk, and tax efficiency under Section 80C.

Updated: March 2026

Our Top Picks

Most Consistent
#2 Pick
Axis Long Term Equity Fund
~15.2% 5Y CAGR (not guaranteed)

Known for delivering consistent risk-adjusted returns with lower volatility than peers. Strong stock selection across large and mid-cap segments. A solid choice for investors who want equity exposure without extreme fluctuations.

  • 3Y Returns: ~16% CAGR
  • 5Y Returns: ~15.2% CAGR
  • Expense Ratio: 0.69%
  • Min SIP: ₹500/month
  • Risk Level: Moderately High
Invest in Axis ELSS →
Most Trusted
#3 Pick
SBI Long Term Equity Fund
~16.8% 5Y CAGR (not guaranteed)

Backed by India's largest AMC with over ₹9.5 lakh crore AUM. One of the oldest ELSS funds with a proven track record across multiple market cycles. Best for investors who value brand trust and long-term stability.

  • 3Y Returns: ~18% CAGR
  • 5Y Returns: ~16.8% CAGR
  • Expense Ratio: 0.90%
  • Min SIP: ₹500/month
  • Risk Level: High (Equity)
Invest in SBI ELSS →

Full Comparison Table

ELSS returns are historical CAGR and not guaranteed. PPF offers guaranteed 7.1% p.a. which is fully tax-free under EEE status.

ELSS Fund3Y Returns5Y ReturnsExpense RatioMin SIPRisk Level
Mirae Asset Tax Saver Fund~20% CAGR~18.5% CAGR0.58%₹500/monthHigh
Axis Long Term Equity Fund~16% CAGR~15.2% CAGR0.69%₹500/monthModerately High
SBI Long Term Equity Fund~18% CAGR~16.8% CAGR0.90%₹500/monthHigh
Quant Tax Plan~25% CAGR~22% CAGR0.57%₹500/monthVery High
HDFC ELSS Tax Saver Fund~17% CAGR~15% CAGR1.04%₹500/monthHigh
Kotak Tax Saver Fund~16% CAGR~15.5% CAGR0.73%₹500/monthHigh
PPF (for reference)7.1% (guaranteed)7.1% (guaranteed)N/A (Govt scheme)₹500/yearZero

Calculate Your PPF Returns

See exactly how your PPF investment grows with guaranteed 7.1% tax-free returns. Compare with ELSS returns side by side.

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Frequently Asked Questions

Which is better for tax saving — ELSS or PPF?

It depends on your risk appetite. ELSS has delivered 12-20% historical returns with only a 3-year lock-in, but returns are not guaranteed and carry equity market risk. PPF offers guaranteed 7.1% fully tax-free returns with zero risk but has a 15-year lock-in. For maximum growth, choose ELSS. For safety, choose PPF. Many experts recommend investing in both.

Which ELSS fund has the best returns in 2026?

Based on trailing 5-year CAGR, Quant Tax Plan leads with ~22% CAGR, followed by Mirae Asset Tax Saver (~18.5%) and SBI Long Term Equity (~16.8%). However, past performance does not guarantee future returns. Look at consistency across 3Y, 5Y, and 10Y periods, not just recent returns.

Is ELSS fully tax-free like PPF?

No. While ELSS investments qualify for Section 80C deduction (up to ₹1.5 lakh), the returns are not fully tax-free. Long-term capital gains (LTCG) above ₹1.25 lakh per year are taxed at 12.5%. PPF has EEE status — investment, interest, and maturity are ALL tax-free.

Can I invest in both ELSS and PPF for tax saving?

Yes, and this is what most financial advisors recommend. The combined Section 80C limit is ₹1,50,000. A popular split is ₹75,000 in PPF (for safety and guaranteed returns) and ₹75,000 in ELSS (for higher growth potential). This gives you the best of both worlds.

What is the lock-in period for ELSS vs PPF?

ELSS has the shortest lock-in of any 80C investment at just 3 years. Each SIP installment has its own 3-year lock-in from the date of investment. PPF has a 15-year lock-in, though partial withdrawal is allowed from the 7th year and loans can be taken from the 3rd to 6th year.

Disclaimer: Investment details shown on this page are sourced from official government notifications and fund house websites. Returns for market-linked instruments (ELSS, NPS, ULIP) are historical and not guaranteed. PPF interest rate is subject to quarterly government review. We may earn a referral commission when you invest through links on this page, at no extra cost to you. This does not affect our rankings or recommendations. Last verified: March 2026.