ELSS funds are an advantageous way to use the Rs 1.5 lakh limit for tax saving investments under Section 80C

Advantages and disadvantages of online insurance plans

As you will have no agent to help you out, you should read the policy document carefully and understand its implications fully

LIC also has online insurance plans. However, LIC term plans are more expensive when compared to other insurers with a good claim settlement ratio. Purchasing insurance online is convenient and cheaper than using an agent. Pure term covers are also simple products. Websites of insurance aggregators also allow you to compare quotes from all leading brands and find the best deal. Online insurance purchases have their share of shortcomings, too. Since no agent is involved, you should read the policy document carefully and understand its implications fully.

Here are the top performing equity linked savings schemes, or tax-saving funds. Below are the filters used to arrive at them.

1. Top performers: 5-year annualized returns
2. Category: Equity Linked Savings Scheme (ELSS)
3. Schemes: Open ended
4. Growth plans (dividend plans excluded)
5. Regular plans (direct plans excluded)

Axis Long Term Equity: 19.70%

This fund made its mark in 2010 and 2011. It topped the chart in 2010 with a return of 30% and fell the lowest the very next year when the market tanked. Not only is it consistently a top quartile performer, it is often the best in its category (2010, 2011, 2013).

BNP Paribas Long Term Equity: 16.49%

From 2007 to 2010, the fund consistently underperformed the category average. Anand Shah joined the AMC in 2011 and the change was immediately evident. Since then the fund has delivered above average returns and is now quite a contender in the category.

Reliance Tax Saver (ELSS) Fund: 16.03%

You can expect volatility from this fund but it rewards investors who stay in for the long haul. Its 3-, 5-, and 10-year returns have not disappointed. Volatile performer but does deliver eventually. Currently, a little over half the portfolio is in mid, small and micro caps.

Franklin India Taxshield: 15.15%

This fund delivers by not losing ground when the market tanks. If one looks at the returns over the past decade, it has been known to underperform the category average in good markets. On the flip side, it has fallen much below the category average during bear phases. But, by and large, it is a steady performer. Its below-average performance is never abysmal and it manages to hold its own in a market carnage.

Religare Invesco Tax Plan: 14.97%

This one won't deliver an astounding return, but it is definitely stable and dependable. Over the past 9 calendar years, it underperformed the category average just once, that too by just 0.64%.

Birla Sun Life Tax Plan: 14.50%

This fund has a longer history than its sibling mentioned above, but underperformed the category average in its first four years (2007, 2008, 2009, 2010). Since then the fund has improved its performance and did well last year. The fund has a higher cash allocation than the above one but market cap allocations are similar and so are the top holdings in the portfolios.

Birla Sun Life Tax Relief 96: 14.06%

After a searing performance in 2009, the fund faltered the next two years. Since then it has been a fairly consistent performer.

DSP BlackRock Tax Saver: 13.97%

The fund tends to fall more than the category average during down markets (2008, 2011), but otherwise beats the average. However, last year Apoorva Shah, who was responsible for the fund's performance, relinquished fund management responsibility.

ICICI Prudential Long Term Equity: 13.93%

Sporadically, the fund puts up some excellent numbers as it did in 2009 (a return of 112%) and 2012 (37.63%). At other times, it also manages to do fairly well. This multi-cap offering is fairly stable and delivers.

IDFC Tax Advantage: 13.78%

In its track record of 7 years, the fund has periods where it underperforms the category average, that too by a noticeable margin. The fund shot to prominence in 2013 when it was the third best performer in the category. Unfortunately, the very next year it underperformed the category average by 8%. Thus far, the fund has not been consistent but delivers over the long term.