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
Features of Banking & PSU Mutual Funds
The SEBI introduced Banking & PSU fund category a few years back. These are debt schemes that mainly invest in government-backed banks and PSUs. Let’s look at the main features of Banking & PSU funds- View More
Taxability of Banking & PSU Funds
Banking & PSU funds are taxed according to the taxation rules that apply to debt funds. If investments are held for over three years, the earnings are considered long-term capital gains and attract a tax of 20 percent. View More
Risk Involved with Banking & PSU Funds
Banking & PSU funds invest in debt securities of businesses operating under the public sector and high-performance banking organizations. The risks associated with such investments are minimal because the government backs the amount. Moreover, debt funds are low-risk in nature as compared to equities. View More
Advantages of Banking & PSU Funds
Following are the primary benefits associated with Banking & PSU funds.
- Low risk – As these investments are short-term, the market volatility does not affect the returns, making them ideal for investors looking for low-risk options. While they are not entirely free of risk, they carry lesser risk than other debt funds.
Who are these Funds Suited for?
Public sector undertakings and centralized banks are government-backed, so they have a minimum risk. Moreover, as this scheme largely focuses on debt securities, the risk factor is lower than equities as they are a liability to the issuing company. Banks and PSUs should pay interest to debenture holders before distributing profits among shareholders. View More
Popular Banking and PSU Mutual Funds
- Fund Name
- Min SIP Investment Amt
- AUM (Cr.)
- 3Y Return
AXIS Banking & PSU Debt Fund – Direct Growth is an Banking and PSU scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Aditya Pagaria. With an impressive AUM of ₹14,327 Crores, this scheme's latest NAV is ₹2389.7131 as of 01-12-23.
AXIS Banking & PSU Debt Fund – Direct Growth scheme has delivered a return performance of 6.4% in the last 1 year, 4.6% in the last 3 years, and an 7.8% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹5,000
- AUM (Cr.)
- ₹14,327
- 3Y Return
- 6.4%
SBI Banking and PSU Fund – Direct Growth is an Banking and PSU scheme that was launched on 08-01-13 and is currently under the management of our experienced fund manager Rajeev Radhakrishnan. With an impressive AUM of ₹4,419 Crores, this scheme's latest NAV is ₹2899.9697 as of 01-12-23.
SBI Banking and PSU Fund – Direct Growth scheme has delivered a return performance of 6.7% in the last 1 year, 4.3% in the last 3 years, and an 7.9% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹5,000
- AUM (Cr.)
- ₹4,419
- 3Y Return
- 6.7%
ICICI Pru Banking & PSU Debt Fund – Direct Growth is an Banking and PSU scheme that was launched on 13-03-13 and is currently under the management of our experienced fund manager Rahul Goswami. With an impressive AUM of ₹8,282 Crores, this scheme's latest NAV is ₹29.9447 as of 01-12-23.
ICICI Pru Banking & PSU Debt Fund – Direct Growth scheme has delivered a return performance of 7.4% in the last 1 year, 5.6% in the last 3 years, and an 8.2% since its launch. With a minimum SIP investment of just ₹500, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹500
- AUM (Cr.)
- ₹8,282
- 3Y Return
- 7.4%
HDFC Banking and PSU Debt Fund – Direct Growth is an Banking and PSU scheme that was launched on 26-03-14 and is currently under the management of our experienced fund manager Anil Bamboli. With an impressive AUM of ₹6,427 Crores, this scheme's latest NAV is ₹20.9666 as of 01-12-23.
HDFC Banking and PSU Debt Fund – Direct Growth scheme has delivered a return performance of 6.9% in the last 1 year, 4.9% in the last 3 years, and an 7.9% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹100
- AUM (Cr.)
- ₹6,427
- 3Y Return
- 6.9%
Nippon India Banking & PSU Debt Fund – Dir Growth is an Banking and PSU scheme that was launched on 15-05-15 and is currently under the management of our experienced fund manager Pranay Sinha. With an impressive AUM of ₹5,278 Crores, this scheme's latest NAV is ₹18.836 as of 01-12-23.
Nippon India Banking & PSU Debt Fund – Dir Growth scheme has delivered a return performance of 6.9% in the last 1 year, 4.8% in the last 3 years, and an 7.7% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹5,000
- AUM (Cr.)
- ₹5,278
- 3Y Return
- 6.9%
Aditya Birla SL Banking&PSU Debt Fund-DirGrowth is an Banking and PSU scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Kaustubh Gupta. With an impressive AUM of ₹8,150 Crores, this scheme's latest NAV is ₹333.3214 as of 01-12-23.
Aditya Birla SL Banking&PSU Debt Fund-DirGrowth scheme has delivered a return performance of 6.9% in the last 1 year, 4.9% in the last 3 years, and an 8.5% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹1,000
- AUM (Cr.)
- ₹8,150
- 3Y Return
- 6.9%
PGIM India Banking&PSU Debt Fund-Dir Growth is an Banking and PSU scheme that was launched on 10-03-13 and is currently under the management of our experienced fund manager Puneet Pal. With an impressive AUM of ₹45 Crores, this scheme's latest NAV is ₹22.3443 as of 29-09-23.
PGIM India Banking&PSU Debt Fund-Dir Growth scheme has delivered a return performance of 8% in the last 1 year, 16.1% in the last 3 years, and an - since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹5,000
- AUM (Cr.)
- ₹45
- 3Y Return
- 8%
DSP Banking & Psu Debt Fund – Direct Growth is an Banking and PSU scheme that was launched on 14-09-13 and is currently under the management of our experienced fund manager Vikram Chopra. With an impressive AUM of ₹2,545 Crores, this scheme's latest NAV is ₹21.7301 as of 01-12-23.
DSP Banking & Psu Debt Fund – Direct Growth scheme has delivered a return performance of 6.5% in the last 1 year, 4.4% in the last 3 years, and an 7.9% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹100
- AUM (Cr.)
- ₹2,545
- 3Y Return
- 6.5%
Kotak Banking and PSU Debt Fund – Direct Growth is an Banking and PSU scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Deepak Agrawal. With an impressive AUM of ₹6,015 Crores, this scheme's latest NAV is ₹59.589 as of 01-12-23.
Kotak Banking and PSU Debt Fund – Direct Growth scheme has delivered a return performance of 6.8% in the last 1 year, 5% in the last 3 years, and an 8.2% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Banking and PSU funds.
- Min SIP Investment Amt
- ₹100
- AUM (Cr.)
- ₹6,015
- 3Y Return
- 6.8%
Frequently Asked Questions
How to invest in Banking & PSU mutual funds?
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.
How do Banking & PSU mutual funds work?
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.
What minimum amount do you require to invest in Banking & PSU 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.
Do Banking & PSU funds have a lock-in period?
There is no holding period for these mutual funds; investors are free to exit their positions anytime.
What is the ideal investment horizon for Banking & PSU funds?
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.
What is the risk rating for Banking & PSU funds?
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.
Do Banking & PSU funds have any limitations for asset allocation?
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.