Lock-in period

A lock-in period is a set time after each purchase during which units cannot be redeemed, switched or transferred.

Some funds do not let you take money out for a fixed time after each purchase. During the lock-in, units cannot be redeemed, switched or moved to another scheme.

Where lock-ins apply:

ELSS funds lock each purchase for three years.
Retirement and children's funds lock units for at least five years, or until retirement age or the child turns 18, whichever comes first.
Close-ended funds cannot be redeemed with the fund house until the scheme matures, though their units are listed on a stock exchange.

The lock-in runs from the date of each purchase. With an ELSS SIP started in January 2024, the January 2024 instalment is free to redeem in January 2027, and the December 2024 instalment in December 2027.

A lock-in is different from an exit load. An exit load lets you leave early for a fee. A lock-in does not let you leave at all until it ends.

When a lock-in ends, nothing happens automatically. The units stay invested until you redeem or switch them.

Related terms

ELSS Exit load SIP

Guides

ELSS funds: the tax deduction, the lock-in and the tax on gains

Money put into an ELSS can be deducted from taxable income under the old tax regime, up to ₹1.5 lakh a year with other eligible items. Each purchase is locked for three years.

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