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Banking and PSU Mutual Funds

Banking and PSU Funds are investment vehicles that are safer than other types of mutual funds. These are open-ended debt mutual fund investment schemes that stand out from others owing to their investment pattern. These funds invest a minimum of 80 percent of assets in public financial institutions, banks, and PSUs (public sector undertaking) debt securities. View More

These mutual fund schemes generally invest a large part in debentures, bonds, and certificates of deposits issued by public sector banks working under the government. The focus is to invest in debt instruments with a low maturity period and high liquidity. These funds are ultra-short or short to medium-term investments with a lower risk than traditional debt funds.

While these schemes are much safer than private sector undertaking, it should be noted that they are not entirely free of risk. The funds also have the potential to offer high returns, but it depends on the market conditions. This means they are suitable for investors with a low-risk appetite, but it is essential to keep in mind the market volatility and your financial goals before investing in them.

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Banking and PSU Mutual Funds List

Filters
logo UTI-Banking & PSU Fund - Direct Growth

7.76%

Fund Size (Cr.) - 825

Invest
logo ICICI Pru Banking & PSU Debt Fund - Direct Growth

8.09%

Fund Size (Cr.) - 10,092

Invest
logo ITI Banking and PSU Debt Fund - Direct Growth

7.76%

Fund Size (Cr.) - 31

Invest
logo Kotak Banking and PSU Debt Fund - Direct Growth

8.12%

Fund Size (Cr.) - 5,762

Invest
logo Aditya Birla SL Banking&PSU Debt Fund-DirGrowth

8.12%

Fund Size (Cr.) - 9,586

Invest
logo HDFC Banking and PSU Debt Fund - Direct Growth

8.03%

Fund Size (Cr.) - 5,837

Invest
logo DSP Banking & Psu Debt Fund - Direct Growth

8.23%

Fund Size (Cr.) - 3,211

Invest
logo LIC MF Banking & PSU Fund - Direct Growth

8.17%

Fund Size (Cr.) - 1,882

Invest
logo Nippon India Banking & PSU Debt Fund - Dir Growth

8.03%

Fund Size (Cr.) - 5,708

Invest
logo Bandhan Banking & PSU Debt Fund - Direct Growth

8.01%

Fund Size (Cr.) - 13,421

Invest
View More

Who Should Invest in Banking & PSU Mutual Funds?

Banking and PSU funds are short-term investments considered to be on the safer side as compared to regular debt schemes. These funds are suitable for these types of investors: View More

  • Conservative or risk-averse investors looking for a comparatively safer mutual fund option in their portfolio can benefit from Banking & PSU funds. As they are not so market-volatile, they are perfect for investors who want ultra-short or short-term investments with minimal risk.
  • Experienced investors well-versed with the stock market function can allocate a portion of their portfolio to the best Banking & PSU funds. If the investor pools money in risky assets, these investments can balance the risk factor to a great extent. In any unforeseen situation like a downtrend in the stock market, such an investment can deliver returns compensating for the losses or low returns associated with risky assets.
  • These debt mutual funds are an ideal investment alternative for investors looking to put their surplus funds into a secure scheme to protect their portfolio while realizing considerable gains.
  • Investors interested in high returns should go for this type of mutual fund. They deliver better returns than any traditional savings scheme, like a fixed deposit. However, the risk is also comparatively higher. These schemes also suit you if you search for investments with high credit quality and liquidity.

Popular Banking and PSU Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 825
  • 3Y Return
  • 8.78%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 10,092
  • 3Y Return
  • 7.33%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 31
  • 3Y Return
  • 6.93%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 5,762
  • 3Y Return
  • 6.91%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 9,586
  • 3Y Return
  • 6.78%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 5,837
  • 3Y Return
  • 6.73%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 3,211
  • 3Y Return
  • 6.71%

  • Min SIP Investment Amt
  • ₹ ₹ 200
  • AUM (Cr.)
  • ₹ 1,882
  • 3Y Return
  • 6.68%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 5,708
  • 3Y Return
  • 6.67%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 13,421
  • 3Y Return
  • 6.60%

FAQs

Investing in Banking & PSU funds is simple and can be done online or offline. You can either visit the AMC physically or consult a broker to invest through offline mode. Alternatively, you can visit an online investment platform like 5Paisa.com and choose from many mutual funds available in one place. You can compare the funds you are interested in and use the lumpsum or SIP calculator to estimate your returns.

These funds are ideal for ultra-short to short-term investment with a maximum duration of three years. The ideal holding period for these schemes is between one to three years, so they are suitable for investors with short-term investment goals.

These are debt mutual fund schemes where almost 80% of the assets are invested in debentures, bonds, and certificates of deposits. The money is mainly invested in securities with low maturity periods and high liquidity.

It considers investing in public sector banks operating under the central government. It makes them much safer than private sector undertakings. These mutual funds are known to deliver high returns, but the returns depend a lot on market volatility.

As these funds invest in debt securities for a short duration, market volatility does not influence their returns, making them an ideal low-risk investment option. Though these funds are not entirely risk-free, they carry lesser risk than other debt funds.

The fund house specifies the scheme’s minimum investment amount for Banking & PSU funds. Generally, it can be anywhere from INR 1000, while the minimum SIP amount can start as low as INR 100.

According to the regulations of the SEBI, Banking & PSU funds must invest a minimum of 80% of assets in debt securities issued by public sector undertakings and banks.

There is no holding period for these mutual funds; investors are free to exit their positions anytime.

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