The lock-in period in Mutual funds means the investor cannot redeem their units before completing a predetermined period from the date of investment.

The two types of Mutual funds are open-ended and close-ended. Close-ended Mutual funds always have a lock-in period, whereas ELSS and solution-oriented funds may or may not have a lock-in period. The lock-in period is applicable to both lump sum and SIP investments. The lock-in period is essential for both investors as well as the Mutual fund. To reap the benefits of investing in Mutual funds, you should hold it for a long period of time. Hence, by sticking to the lock-in period you benefit from capital appreciation. In ELSS funds, you also get tax benefits.