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Banking & PSU Debt Mutual Funds
- Average Return 4.92%
- No of Funds 20
What is Banking and PSU Mutual Fund
Banking and PSU funds are debt funds that lend only to banks and public sector companies. The high quality of borrowers allows these loans mean the risk of default is very less. However, they do get affected if interest rates in the economy go up.
Advantages of Banking and PSU Funds
- Ideal for at least 2-3-year investment horizon
- Most borrowers are government-backed or are big banks which means near-zero risk of non-payment
- Tend to give higher returns than Bank Fixed Deposits of similar duration without taking higher risk
Top schemes of Banking and PSU Mutual Funds sorted by last 5 year returns
20 funds
ShowReturns for
via
Min SIP
₹ 5,000
5 Yrs Return
+ 7.44 % p.a. + 8.54 % p.a. + 5.92 % + 5.13 % p.a. + 4.98 % p.a. + 2.03 % + 6.52 % p.a. -1.19 %
#14 of 17
Fund Size
₹967 Crs
Return (p.a)
+ 6.89% + 18.96% N.A. N.A. + 1.83% + 1.83% + 7.55% + 12.05% + 0.66% + 0.66% + 8.17% + 8.60% + 3.56% + 3.56% + 0.37% + 0.37%
ETM Rank
#14 of 17
Fund Size
₹8,146 Crs
Return (p.a)
+ 6.78% + 18.64% + 7.57% + 47.65% + 2.30% + 2.30% + 6.13% + 9.73% + 1.18% + 1.18% + 6.66% + 6.99% + 4.14% + 4.14% + 0.61% + 0.61%
ETM Rank
#4 of 17
#12 of 17
Fund Size
₹356 Crs
Return (p.a)
+ 6.75% + 18.57% N.A. N.A. + 1.61% + 1.61% + 5.22% + 8.25% + 0.27% + 0.27% + 5.56% + 5.82% + 3.49% + 3.49% + 0.12% + 0.12%
ETM Rank
#12 of 17
#3 of 17
Fund Size
₹6,343 Crs
Return (p.a)
+ 6.60% + 18.12% + 7.53% + 47.33% + 2.15% + 2.15% + 5.66% + 8.95% + 1.05% + 1.05% + 6.11% + 6.41% + 3.91% + 3.91% + 0.62% + 0.62%
ETM Rank
#3 of 17
#10 of 17
Fund Size
₹5,440 Crs
Return (p.a)
+ 6.52% + 17.86% N.A. N.A. + 2.02% + 2.02% + 5.42% + 8.57% + 0.85% + 0.85% + 5.87% + 6.15% + 3.84% + 3.84% + 0.44% + 0.44%
ETM Rank
#10 of 17
#8 of 17
Fund Size
₹6,373 Crs
Return (p.a)
+ 6.45% + 17.66% N.A. N.A. + 2.09% + 2.09% + 5.44% + 8.60% + 0.98% + 0.98% + 5.90% + 6.18% + 3.85% + 3.85% + 0.49% + 0.49%
ETM Rank
#8 of 17
Fund Size
₹8,400 Crs
Return (p.a)
+ 6.44% + 17.64% + 7.55% + 47.55% + 2.06% + 2.06% + 5.47% + 8.65% + 0.97% + 0.97% + 5.92% + 6.21% + 3.81% + 3.81% + 0.49% + 0.49%
ETM Rank
#2 of 17
#6 of 17
Fund Size
₹15,017 Crs
Return (p.a)
+ 6.41% + 17.54% + 7.29% + 45.50% + 1.94% + 1.94% + 5.26% + 8.31% + 0.84% + 0.84% + 5.75% + 6.03% + 3.71% + 3.71% + 0.45% + 0.45%
ETM Rank
#6 of 17
Fund Size
₹46 Crs
Return (p.a)
+ 6.15% + 16.79% + 7.20% + 44.85% + 1.85% + 1.85% + 5.07% + 8.00% + 0.79% + 0.79% + 5.41% + 5.67% + 3.50% + 3.50% + 0.38% + 0.38%
ETM Rank
#5 of 17
Fund Size
₹667 Crs
Return (p.a)
+ 6.13% + 16.73% N.A. N.A. + 2.00% + 2.00% + 5.24% + 8.27% + 0.94% + 0.94% + 5.73% + 6.00% + 3.73% + 3.73% + 0.46% + 0.46%
ETM Rank
#15 of 17
#1 of 17
Fund Size
₹14,606 Crs
Return (p.a)
+ 6.10% + 16.65% + 7.21% + 44.93% + 1.93% + 1.93% + 5.16% + 8.15% + 0.89% + 0.89% + 5.62% + 5.89% + 3.57% + 3.57% + 0.47% + 0.47%
ETM Rank
#1 of 17
#13 of 17
Fund Size
₹2,410 Crs
Return (p.a)
+ 6.07% + 16.55% N.A. N.A. + 1.99% + 1.99% + 5.05% + 7.97% + 0.85% + 0.85% + 5.59% + 5.86% + 3.70% + 3.70% + 0.41% + 0.41%
ETM Rank
#13 of 17
#9 of 17
Fund Size
₹4,740 Crs
Return (p.a)
+ 5.93% + 16.14% + 7.13% + 44.32% + 1.92% + 1.92% + 4.95% + 7.80% + 0.83% + 0.83% + 5.51% + 5.77% + 3.69% + 3.69% + 0.45% + 0.45%
ETM Rank
#9 of 17
#7 of 17
Fund Size
₹1,117 Crs
Return (p.a)
+ 5.77% + 15.68% + 6.81% + 41.91% + 1.99% + 1.99% + 5.04% + 7.95% + 0.85% + 0.85% + 5.66% + 5.93% + 3.72% + 3.72% + 0.44% + 0.44%
ETM Rank
#7 of 17
#17 of 17
Fund Size
₹4,612 Crs
Return (p.a)
+ 5.51% + 14.93% + 6.74% + 41.41% + 1.90% + 1.90% + 4.38% + 6.89% + 0.81% + 0.81% + 4.90% + 5.13% + 3.55% + 3.55% + 0.43% + 0.43%
ETM Rank
#17 of 17
Show all funds
Banking and PSU Funds Returns Calculator
See what your investment would have yielded in
Invested ₹ 6 Lakh
Profit ₹ 3.33 Lakh
₹ 9.33 Lakh
This fund has generated an XIRR of 6.89% over the past 5 Years
Genius Shield Portfolio strategies would have potentially delivered up to 7.44% returns! Know More 
SIP Calculator
Mutual Fund Calculator
Lumpsum CalculatorHow to invest in Banking and PSU Funds?
It is quite easy to invest in Banking and PSU mutual funds on ET Money. Here are the steps that you have to follow.
- Register online on ET Money app or website
- Head to Mutual Funds sections and choose the Banking and PSU fund you want to invest in.
- Click on invest and choose the amount and mode of investment (SIP or Lumpsum)
- Provide your KYC details (Pan number, Bank details) and complete your investment.
Frequently Asked Questions
Which are the best Banking and PSU Mutual Funds to invest in 2023?
These are top 5 Banking and PSU funds you can invest in 2023
| Fund Name | Fund Category | ETM Rank | Consistency | 5 Year Return (Annualized) |
|---|---|---|---|---|
| UTI Banking & PSU Debt Fund | Debt | # 12 of 19 | 5.74 % p.a. | |
| ICICI Prudential Banking & PSU Debt Fund | Debt | # 1 of 19 | 7.44 % p.a. | |
| Edelweiss Banking and PSU Debt Fund | Debt | # 19 of 19 | 8.19 % p.a. | |
| Kotak Banking and PSU Debt Fund | Debt | # 2 of 19 | 7.69 % p.a. | |
| Nippon India Banking & PSU Debt Fund | Debt | # 5 of 19 | 7.67 % p.a. |
How long should I stay invested in Banking and PSU Mutual Funds?
Since Banking and PSU Debt Funds lend to banks and PSUs for the medium duration, you should invest in these funds for at least 2-3 years.
Where do Banking and PSU Mutual Funds invest?
Banking and PSU Funds lend only to Banks and Public Sector Units. The lending duration is mostly in the 2-3 year duration. However, there are funds that lend for longer durations as well.
Are Banking and PSU Mutual Funds high risk?
The quality of borrowers these funds lend to is extremely good. Due to this, there is zero risk of the borrowers defaulting. However, they do get affected by interest rate movements in the economy as they lend for 2-3 years.
What kind of returns can i earn from Banking and PSU ?
Banking and PSU Funds have on an average delivered 6.49% p.a. returns in the last 1 year. Their 3 and 5 year annualized returns are 4.92% and 7.17%. p.a.
