There are 2 key reasons why investors must also focus on the tax implications of the investment. Firstly, assets like ELSS and PPF that can save tax tend to have a lock-in period. So, while they may be tax efficient, they are not exactly liquid due to the tax benefits that they offer. For example, ELSS funds have a lock in period of 3 years, ULIPs have a lock in period of 5 years and PPF has lock in period of 15 years. You need to factor these into your calculations. Secondly, when you are trying to calculate your accumulated amount after 2 years, calculate it on a post-tax basis. For example, interest on FDs is taxable at your peak rate. In case of debt mutual funds, long term gains are taxable. Therefore the returns in these cases need to be looked at on a post-tax basis to be more realistic vis-a-vis your financial liability. Also in case of equity and debt fund, there is the incidence of dividend distribution tax (DDT) and this reduces your effective return.