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Banking & PSU Debt Mutual Funds
- Average Return 7.4%
- 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 Returns
20 funds
ShowReturns for
via
#NA of NA
ETM Rank: Genius only 
Fund Size
₹785 Crs
Return (p.a)
+ 21.68%+ 1.63% + 15.07%+ 2.3% + 11.58%+ 3.2% + 9.78%+ 5.18% + 8.32%+ 13.35% + 7.98%+ 22.27%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹10,368 Crs
Return (p.a)
+ 24.09%+ 1.79% + 16.45%+ 2.5% + 12.58%+ 3.47% + 10.44%+ 5.52% + 8.72%+ 14.02% + 7.61%+ 21.15%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹6,011 Crs
Return (p.a)
+ 27.52%+ 2.02% + 17.95%+ 2.71% + 13.23%+ 3.64% + 10.88%+ 5.75% + 8.81%+ 14.17% + 7.5%+ 20.82%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹263 Crs
Return (p.a)
+ 29.83%+ 2.17% + 19.24%+ 2.89% + 13.76%+ 3.78% + 11.24%+ 5.94% + 8.87%+ 14.27% + 7.4%+ 20.51%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹5,702 Crs
Return (p.a)
+ 29.68%+ 2.16% + 19.09%+ 2.87% + 13.85%+ 3.8% + 11.1%+ 5.86% + 8.78%+ 14.11% + 7.4%+ 20.5%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹3,409 Crs
Return (p.a)
+ 31.86%+ 2.3% + 20.14%+ 3.02% + 14.0%+ 3.84% + 11.32%+ 5.98% + 8.97%+ 14.44% + 7.39%+ 20.47%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹5,996 Crs
Return (p.a)
+ 28.48%+ 2.08% + 18.11%+ 2.73% + 13.28%+ 3.65% + 10.83%+ 5.73% + 8.7%+ 13.98% + 7.38%+ 20.45%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹8,588 Crs
Return (p.a)
+ 27.23%+ 2.0% + 17.86%+ 2.7% + 13.16%+ 3.62% + 10.8%+ 5.71% + 8.66%+ 13.92% + 7.36%+ 20.39%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹1,702 Crs
Return (p.a)
+ 30.23%+ 2.2% + 19.31%+ 2.9% + 13.91%+ 3.82% + 11.18%+ 5.91% + 8.74%+ 14.06% + 7.21%+ 19.93%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹3,835 Crs
Return (p.a)
+ 27.05%+ 1.99% + 17.88%+ 2.7% + 13.26%+ 3.65% + 10.81%+ 5.71% + 8.58%+ 13.79% + 7.1%+ 19.6%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹547 Crs
Return (p.a)
+ 23.67%+ 1.76% + 16.52%+ 2.51% + 12.4%+ 3.42% + 10.32%+ 5.46% + 8.41%+ 13.5% + 7.09%+ 19.59%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹12,961 Crs
Return (p.a)
+ 24.29%+ 1.8% + 16.5%+ 2.5% + 12.58%+ 3.46% + 10.36%+ 5.48% + 8.24%+ 13.22% + 7.01%+ 19.32%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹13,397 Crs
Return (p.a)
+ 20.82%+ 1.57% + 15.18%+ 2.31% + 11.86%+ 3.27% + 9.99%+ 5.28% + 8.21%+ 13.16% + 7.0%+ 19.32%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹102 Crs
Return (p.a)
+ 28.88%+ 2.11% + 18.52%+ 2.79% + 13.46%+ 3.7% + 10.98%+ 5.8% + 8.7%+ 13.99% + 6.9%+ 19.01%
ETM Rank
#NA of NA
Genius only
#NA of NA
ETM Rank: Genius only
Fund Size
₹353 Crs
Return (p.a)
+ 25.72%+ 1.9% + 17.47%+ 2.64% + 12.97%+ 3.57% + 10.68%+ 5.65% + 8.49%+ 13.64% + 6.9%+ 18.99%
ETM Rank
#NA of NA
Genius only
Show all 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 7.98% over the past 5 Years
SIP Calculator
Mutual Fund Calculator
Lumpsum CalculatorHow to invest in Banking and PSU Funds?
Investing in Banking and PSU mutual funds on the ET Money app is simple. Follow these steps:
For Desktop Users:
- Click on the "Invest" button next to the scheme in the Banking and PSU fund list shown above.
- Scan the QR code to download the app.
For Mobile Users:
- Tap on the "Invest" button in the Banking and PSU fund list to download the app.
- Open the app, sign up, and complete your one-time KYC process, or log in if you're already registered.
- Search for the mutual fund you want to invest in and choose your investment mode (Lump sum investment or SIP).
- Enter your investment amount.
- Fill in the required details, including your bank account for payment, and confirm.
All set! Your investment is complete.
Frequently Asked Questions
Which are the best Banking and PSU Mutual Funds to invest in 2025?
These are top 5 Banking and PSU funds you can invest in 2025
| Fund Name | Fund Category | Consistency | 5.0 Year Return (Annualized) |
|---|---|---|---|
| HDFC Banking and PSU Debt Fund | Debt | 7.19 % p.a. | |
| ICICI Prudential Banking & PSU Debt Fund | Debt | 7.41 % p.a. | |
| Kotak Banking and PSU Debt Fund | Debt | 7.21 % p.a. | |
| Canara Robeco Banking and PSU Debt Fund | Debt | NA | |
| Invesco India Banking and PSU Fund | Debt | 6.4 % 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 9.71% p.a. returns in the last 1 year. Their 3 and 5 year annualized returns are 7.4% and 6.87%. p.a.
