Equity Savings Funds
Equity Saving Funds allocate a minimum of 30%-35% of their total assets to equity assets, with the remaining portion invested in debt income funds and arbitrages.
3 to 5 years
22 Funds
₹35,053 Cr Total AUM
Explore Equity Savings Mutual Funds
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| Fund name | Fund size | Expense Ratio | 3Y Returns  |
|---|---|---|---|
 HSBC Equity Savings Fund Direct Growth Equity Savings Moderately High risk | ₹344 Cr | 0.61% | 14.1% |
 Sundaram Equity Savings Fund Direct Growth Equity Savings Moderate Risk | ₹841 Cr | 0.5% | 14.0% |
 Kotak Equity Savings Fund Direct Growth Equity Savings Moderate Risk | ₹6,076 Cr | 0.69% | 13.7% |
 UTI Equity Savings Fund Direct Growth Equity Savings Moderate Risk | ₹382 Cr | 0.7% | 12.4% |
 Mahindra Manulife Equity Savings Fund Direct Growth Equity Savings Moderately High risk | ₹491 Cr | 0.73% | 12.3% |
 HDFC Equity Savings Fund Direct Growth Equity Savings Moderately High risk | ₹4,619 Cr | 0.98% | 11.9% |
 Mirae Asset Equity Savings Fund Direct Growth Equity Savings Moderately High risk | ₹1,126 Cr | 0.32% | 11.7% |
 SBI Equity Savings Fund Direct Growth Equity Savings Moderately High risk | ₹4,877 Cr | 0.66% | 11.4% |
 Invesco India Equity Savings Fund Direct Growth Equity Savings Moderately High risk | ₹208 Cr | 0.89% | 11.3% |
 Edelweiss Equity Savings Fund Direct Growth Equity Savings Moderate Risk | ₹441 Cr | 0.5% | 11.0% |
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All about Equity Savings Funds
What are Equity Savings Funds?
Equity savings funds are open-ended hybrid mutual funds that invest primarily in equity (minimum 65%), debt securities (minimum 10%), and arbitrage opportunities. This mix offers potential for capital appreciation with less volatility than pure equity funds, plus better tax efficiency than typical debt funds.
Fund managers can actively balance investments based on market conditions, helping manage risk. The arbitrage component seeks to profit from market price fluctuations.
Investors seeking moderate risk, short-term investment alternatives, and tax advantages may find equity savings funds suitable.
As of April 2024, this fund category has average assets under management (AUM) of Rs 31,281.86 crore with 22 schemes, the oldest being 27 years old, according to the Association of Mutual Funds in India (AMFI).
| Scheme Name | AUM (Cr.) |
| ICICI Prudential Equity Savings Fund | 10,104.96 |
| Kotak Equity Savings Fund | 5,112.61 |
| SBI Equity Savings Fund | 4,704.55 |
Source: AMFI website as of April 2024
Who Should Invest in Equity Savings Funds?
Equity savings funds in India offer a balanced investment experience, blending equity, debt, and arbitrage for investors seeking both growth potential and stability. This combination makes them a suitable option for a range of investor profiles.
Growth Oriented Conservative Investors
If you want growth potential but worry about market volatility, equity savings funds could be a suitable option. They balance the growth opportunities of equity and the reliable income and stability of debt instruments.
Suitable for Moderate Risk Tolerance
If you want the potential for better returns than pure debt funds but worry about the volatility of pure equity funds, equity savings funds could be your solution. They offer a mix of risk and return, with built-in diversification for stability, perfect for moderate risk-takers who value growth and capital protection.
Investors Seeking Tax Benefits
Equity savings funds can be a smart choice for tax-conscious investors since they are taxed as equity funds. They are especially beneficial for investors in higher tax brackets.
Portfolio Diversification
Equity savings funds offer convenient diversification across equities, debt, and arbitrage opportunities. This helps reduce overall portfolio risk compared to investing in any single asset class.
Taxation of Equity Savings Funds
| Short Term Capital Gains (STCG) Tax | Long Term Capital Gains (LTCG) Tax |
|---|---|
| Gains from an index fund held for up to 12 months are taxed at 20%. | Gains from an index fund held for more than 12 months are taxed at 12.5% with an exemption of up to Rs 1.25 lakh in a year. |
Dividend Taxation
Equity savings funds pay out dividends when you invest in their IDCW (Income Distribution Cum Withdrawal) option. Dividends are taxed at your marginal income tax rate, and TDS (Tax Deducted at Source) at 10% applies to dividends received more than Rs 5,000 per AMC per financial year.
Advantages of Equity Savings Funds
Equity savings funds offer a range of benefits, as shown below.
Professional Management
Equity savings funds put your investment in the hands of experienced professionals who actively adjust your asset mix based on market conditions, maximising your potential returns while carefully managing risk. For example, ICICI Prudential Equity Savings Fund is managed by Manish Banthia, who has 13 years of experience in fund management. (as of April 2024)
Downside Protection
Equity savings funds strike a balance between risk and stability. Their debt allocation acts as a shock absorber during market downturns, providing protection for your principal investment.
Tax Efficiency
Equity Savings Funds offer tax benefits, especially for high-income investors. Their classification as equity funds provides favourable tax treatment compared to other investment options.
Potential for Capital Appreciation
Equity savings funds aim to balance growth potential with risk management. Their equity investments provide exposure to higher-return assets, while allocations to other asset classes offer stability.
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Other Types of Mutual Funds
Equity Mutual Funds
Equity funds mainly invest in stocks of different companies, making investors partial owners of those companies when they invest in such funds.
Debt Mutual Funds
Debt Mutual Funds invest in fixed-income securities such as government bonds, corporate bonds, treasury bills, and other money market instruments.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Mutual Fund distribution services are offered through Dezerv Distribution Services Private Limited, a wholly owned subsidiary of Dezerv Investments Private Limited (collectively referred to as “Dezerv”) with AMFI Registration No.: ARN- 248439.
Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past Performance of the Scheme is neither an indicator nor a guarantee of future performance.
Mutual Fund distribution services are offered through Dezerv Distribution Services Pvt Limited with AMFI Registration No.: ARN -248439, a wholly owned subsidiary of Dezerv Investments Private Limited. Terms and conditions of the website are applicable. Privacy policy of the website is applicable.