I am currently a graduate student in India, who is a little concerned about his financial stability after the graduation, so decided to start investing some of his scholarship/stipend in Mutual Funds, this new year.
First, when I googled for modes of investment, the first few results were like Stock Market, Mutual Funds, Bank FDs, Real Estate, Gold/Silver. As far as my understanding is, investment in Stock Market requires a lot of effort (to continually watch the prices, etc) and also involves high risk.
I next turned to Mutual Funds. Most of the articles that I read, convinced me that Mutual Funds are low effort, stable option to invest money in and that today there are plenty of schemes where I could invest in some Equity/Debt/Hybrid Funds. I decided to go with this option.
Now, while I was going through schemes, there were far more options than I could understand, with my little knowledge of Mutual Funds. I told myself that I can start investing a little amount in some scheme and see how it goes, to learn from it or otherwise I will always be stuck in this learning curve.
So, I ended up investing a little amount in some Tax Saver Plan which consisted of 4 ELSS schemes investing 25% of my amount in each of them. Before, I made the final payment they asked me if I want one-time investment or a SIP (they said that SIP is recommended for this plan). Being a newbie, I chose SIP, because my understanding of SIP was that if I am investing, say $X in this plan, then the Fund Managers themselves will divide this $X into some parts like $X/12 and keep investing $X/12 in each month. So, I finalized this investment.
Meanwhile, I am reading articles/watching videos about ELSS funds, SIPs and everything. Now that I understand them better, I realized that I have made a lot of mistakes and hence can someone please help with these few questions:
I am not an income tax payer but this plan is "Tax Savings Pack" consisting of ELSS schemes. So am I even eligible to invest in these schemes?
Now that I have a better understanding of SIPs, I realized that I have to pay $X each month. And besides, ELSS schemes have a lock-in period of 3 years. So I am really confused now if I should continue with the SIP or just stop it and let that current money sit-in for 3 years?
As per my understanding, wouldn't it be better if I instead invest in some other plan because this plan is particularly geared towards saving income tax?