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  • Banking and PSU Funds

Banking & PSU Debt Mutual Funds

  • Average Return 6.35%
  • No of Funds 19

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

19 funds
Show Returns for via
Shield Portfolio
Shield Portfolio

Min SIP

₹ 5,000

5 Yrs Return

+ 8.53 % p.a. + 9.03 % p.a. + 5.73 % + 6.49 % p.a. + 4.04 % p.a. + 11.61 % + 2.26 % p.a. + 4.98 %

Edelweiss
Edelweiss Banking and PSU Debt Fund

#15 of 16

Fund Size

₹379 Crs

Return (p.a)

N.A. + 7.6% N.A. + 9.05% N.A. + 5.77% + 17.12% + 4.5% + 4.57% + 18.27% + 8.01%

VRO rating

1

ETM Rank

#15 of 16

Invest
Kotak
Kotak Banking and PSU Debt Fund

#4 of 16

Fund Size

₹6,968 Crs

Return (p.a)

N.A. + 6.85% N.A. + 5.77% N.A. + 5.3% + 9.01% + 4.24% + 3.93% + 9.43% + 7.73%

VRO rating

4

ETM Rank

#4 of 16

Invest
Nippon India
Nippon India Banking & PSU Debt Fund

#11 of 16

Fund Size

₹4,242 Crs

Return (p.a)

N.A. + 6.82% N.A. + 5.08% N.A. + 5.16% + 8.02% + 3.95% + 3.55% + 7.29% + 7.26%

VRO rating

4

ETM Rank

#11 of 16

Invest
ICICI Prudential
ICICI Prudential Banking & PSU Debt Fund

#5 of 16

Fund Size

₹8,186 Crs

Return (p.a)

N.A. + 6.79% N.A. + 7.37% N.A. + 5.71% + 10.68% + 4.91% + 5.06% + 13.89% + 7.68%

VRO rating

4

ETM Rank

#5 of 16

Invest
IDFC
IDFC Banking & PSU Debt Fund

#1 of 16

Fund Size

₹15,787 Crs

Return (p.a)

N.A. + 6.78% N.A. + 4.25% N.A. + 4.92% + 5.71% + 3.69% + 3.41% + 5.76% + 7.44%

VRO rating

5

ETM Rank

#1 of 16

Invest
UTI
UTI Banking & PSU Debt Fund

#14 of 16

Fund Size

₹465 Crs

Return (p.a)

N.A. + 6.75% N.A. + 15.89% N.A. + 8.32% + 12.16% + 9.27% + 13.35% + 9.39% + 6.7%

VRO rating

N.A.

ETM Rank

#14 of 16

Invest
Aditya Birla SL
Aditya Birla Sun Life Banking & PSU Debt Fund

#5 of 16

Fund Size

₹9,611 Crs

Return (p.a)

N.A. + 6.71% N.A. + 5.29% N.A. + 5.24% + 7.53% + 4.13% + 3.93% + 7.38% + 7.86%

VRO rating

3

ETM Rank

#5 of 16

Invest
HDFC
HDFC Banking and PSU Debt Fund

#5 of 16

Fund Size

₹5,380 Crs

Return (p.a)

N.A. + 6.67% N.A. + 5.07% N.A. + 5.16% + 7.65% + 3.96% + 3.63% + 8.11% + 7.44%

VRO rating

3

ETM Rank

#5 of 16

Invest
PGIM India
PGIM India Banking & PSU Debt Fund

#1 of 16

Fund Size

₹67 Crs

Return (p.a)

N.A. + 6.57% N.A. + 4.57% N.A. + 4.97% + 6.04% + 3.89% + 3.49% + 4.97% + 7.47%

VRO rating

4

ETM Rank

#1 of 16

Invest
Axis
Axis Banking & PSU Debt Fund

#1 of 16

Fund Size

₹13,872 Crs

Return (p.a)

N.A. + 6.53% N.A. + 4.69% N.A. + 4.91% + 5.73% + 3.96% + 3.93% + 5.52% + 7.49%

VRO rating

5

ETM Rank

#1 of 16

Invest
Franklin Templeton
Franklin India Banking & PSU Debt Fund

#11 of 16

Fund Size

₹744 Crs

Return (p.a)

N.A. + 6.49% N.A. + 5.44% N.A. + 4.8% + 8.14% + 3.93% + 3.82% + 6.63% + 7.27%

VRO rating

3

ETM Rank

#11 of 16

Invest
DSP
DSP Banking & PSU Debt Fund

#5 of 16

Fund Size

₹2,562 Crs

Return (p.a)

N.A. + 6.29% N.A. + 4.48% N.A. + 4.64% + 6.35% + 3.46% + 3.24% + 4.64% + 7.24%

VRO rating

3

ETM Rank

#5 of 16

Invest
SBI
SBI Banking and PSU Fund

#5 of 16

Fund Size

₹5,731 Crs

Return (p.a)

N.A. + 6.15% N.A. + 4.01% N.A. + 4.38% + 6.28% + 3.16% + 2.8% + 6.18% + 7.35%

VRO rating

2

ETM Rank

#5 of 16

Invest
L&T
L&T Banking and PSU Debt Fund

#13 of 16

Fund Size

₹4,530 Crs

Return (p.a)

N.A. + 5.76% N.A. + 4.38% N.A. + 3.96% + 9.28% + 2.55% + 1.97% + 5.36% + 6.99%

VRO rating

2

ETM Rank

#13 of 16

Invest
Invesco
Invesco India Banking & PSU Debt Fund

#16 of 16

Fund Size

₹197 Crs

Return (p.a)

N.A. + 5.44% N.A. + 3.85% N.A. + 3.57% + 8.48% + 2.21% + 1.3% + 8.42% + 6.54%

VRO rating

1

ETM Rank

#16 of 16

Invest
Sundaram
Sundaram Banking & PSU Debt Fund

#5 of 16

Fund Size

₹461 Crs

Return (p.a)

N.A. + 5.31% N.A. + 4.58% N.A. + 3.74% + 7.38% + 2.93% + 3.03% + 5.79% + 6.41%

VRO rating

2

ETM Rank

#5 of 16

Invest
Canara Robeco
Canara Robeco Banking and PSU Debt Fund

Unranked

Fund Size

₹509 Crs

Return (p.a)

N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. + 7.09%

VRO rating

N.A.

ETM Rank

Unranked

Invest
Mirae Asset
Mirae Asset Banking And PSU Debt Fund

Unranked

Fund Size

₹107 Crs

Return (p.a)

N.A. N.A. N.A. + 4.33% N.A. N.A. + 6.74% + 3.33% + 2.96% + 5.64% + 3.37%

VRO rating

3

ETM Rank

Unranked

Invest
Tata
Tata Banking & PSU Debt Fund

Unranked

Fund Size

₹309 Crs

Return (p.a)

N.A. N.A. N.A. + 4.4% N.A. N.A. + 7.1% + 3.66% + 3.11% + 6.28% + 4.81%

VRO rating

2

ETM Rank

Unranked

Invest

Show all funds

Banking and PSU Funds Returns Calculator

See what your investment would have yielded in

Select fund
Edelweiss Banking and PSU Debt Fund
via in I want to invest of for a period of for
Invested Gains
₹ 6 Lakh
Profit ₹ 3.33 Lakh
₹ 9.33 Lakh
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This fund has given a CAGR of 7.6 % in last 5 years
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Genius Shield Portfolio strategies would have potentially delivered up to 8.53% returns! Know More

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How 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 2022?

These are top 5 Banking and PSU funds you can invest in 2022

Fund Name Fund Category ETM Rank Consistency 5 Year Return (Annualized)
Edelweiss Banking and PSU Debt Fund Debt # 15 of 16
7.94 % p.a.
Kotak Banking and PSU Debt Fund Debt # 4 of 16
7.27 % p.a.
Nippon India Banking & PSU Debt Fund Debt # 11 of 16
7.18 % p.a.
ICICI Prudential Banking & PSU Debt Fund Debt # 5 of 16
6.81 % p.a.
IDFC Banking & PSU Debt Fund Debt # 1 of 16
7.39 % p.a.

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.

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.

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.

Banking and PSU Funds have on an average delivered 3.17% p.a. returns in the last 1 year. Their 3 and 5 year annualized returns are 6.35% and 6.89%. p.a.

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