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Top 5 Best Banking and PSU Debt Funds 2025 - Fincash

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Top 5 Best Banking and PSU Debt Funds 2025

Updated on June 5, 2025 , 20718 views

Banking and PSU Debt Funds are the new sub-category introduced by the Securities and Exchange Board of India (SEBI) in the debt Mutual Fund category. These funds predominantly invests in debt and money market instruments consisting of securities issued by entities such as Banks, Public Financial Institutions, Public Sector Undertakings, etc. This option is considered to maintain an optimum balance of liquidity, safety, and yield.

The Banking and PSU Debt fund belongs to the short term category of debt funds that aims to offer secured returns and minimise risk by Investing in good-quality debt instruments predominately issued by banks and public sector undertakings. Investors who are keen to invest for a short duration, ideally for 2-3 years can invest in this scheme.

Here are some of the best performing Banking and PSU debt Funds 2025 - 2026.

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Banking-PSU-Funds

Top Performing Banking and PSU Debt Funds

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
HDFC Banking and PSU Debt Fund Growth ₹23.1733
↑ 0.05
₹6,0074.25.6107.87.96.93%3Y 11M 1D5Y 6M 18D
UTI Banking & PSU Debt Fund Growth ₹22.0272
↑ 0.07
₹7923.85.49.67.87.66.75%2Y 7D2Y 3M 25D
DSP BlackRock Banking and PSU Debt Fund Growth ₹24.2507
↑ 0.01
₹3,6664.35.310.37.88.66.86%5Y 1M 17D9Y 10M 2D
Kotak Banking and PSU Debt fund Growth ₹65.8834
↑ 0.18
₹6,0134.25.610.2886.97%3Y 8M 16D5Y 5M 23D
Aditya Birla Sun Life Banking & PSU Debt Fund Growth ₹369.461
↑ 0.78
₹8,8264.25.610.17.87.96.91%3Y 9M 18D5Y 7D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 6 Jun 25

Top 5 Best Performing Banking and PSU Debt Funds

1. HDFC Banking and PSU Debt Fund

To generate regular income through investments in debt and money market instruments consisting predominantly of securities issued by entities such as Scheduled Commercial Banks and Public Sector undertakings. There is no assurance that the investment objective of the Scheme will be realized.

HDFC Banking and PSU Debt Fund is a Debt - Banking & PSU Debt fund was launched on 26 Mar 14. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.8% since its launch.  Ranked 6 in Banking & PSU Debt category.  Return for 2024 was 7.9% , 2023 was 6.8% and 2022 was 3.3% .

Below is the key information for HDFC Banking and PSU Debt Fund

HDFC Banking and PSU Debt Fund
Growth
Launch Date 26 Mar 14
NAV (06 Jun 25) ₹23.1733 ↑ 0.05   (0.21 %)
Net Assets (Cr) ₹6,007 on 30 Apr 25
Category Debt - Banking & PSU Debt
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.79
Sharpe Ratio 1.86
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 6.93%
Effective Maturity 5 Years 6 Months 18 Days
Modified Duration 3 Years 11 Months 1 Day

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,733
31 May 22₹11,015
31 May 23₹11,714
31 May 24₹12,511
31 May 25₹13,726

HDFC Banking and PSU Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for HDFC Banking and PSU Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.4%
3 Month 4.2%
6 Month 5.6%
1 Year 10%
3 Year 7.8%
5 Year 6.6%
10 Year
15 Year
Since launch 7.8%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.9%
2023 6.8%
2022 3.3%
2021 3.7%
2020 10.6%
2019 10.2%
2018 5.9%
2017 6.3%
2016 10.8%
2015 9.8%
Fund Manager information for HDFC Banking and PSU Debt Fund
NameSinceTenure
Anil Bamboli26 Mar 1411.19 Yr.
Dhruv Muchhal22 Jun 231.94 Yr.

Data below for HDFC Banking and PSU Debt Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash3.24%
Debt96.48%
Other0.28%
Debt Sector Allocation
SectorValue
Corporate52.68%
Government43.8%
Cash Equivalent3.24%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Indian Railway Finance Corporation Limited
Debentures | -
5%₹282 Cr27,500
Small Industries Development Bank Of India
Debentures | -
4%₹226 Cr22,500
Indian Railway Finance Corporation Limited
Debentures | -
3%₹205 Cr20,000
7.18% Govt Stock 2033
Sovereign Bonds | -
3%₹201 Cr19,000,000
7.26% Govt Stock 2033
Sovereign Bonds | -
3%₹180 Cr17,000,000
State Bank Of India
Debentures | -
3%₹177 Cr175
Housing And Urban Development Corporation Ltd.
Debentures | -
3%₹154 Cr15,000
Bajaj Housing Finance Limited
Debentures | -
3%₹153 Cr15,000
Rural Electrification Corporation Limited
Debentures | -
3%₹153 Cr1,500
Housing And Urban Development Corporation Limited
Debentures | -
2%₹132 Cr1,250

2. UTI Banking & PSU Debt Fund

The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of predominantly debt & money market securities by Banks and Public Sector Undertakings (PSUs).

UTI Banking & PSU Debt Fund is a Debt - Banking & PSU Debt fund was launched on 3 Feb 14. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.2% since its launch.  Ranked 3 in Banking & PSU Debt category.  Return for 2024 was 7.6% , 2023 was 6.7% and 2022 was 10.3% .

Below is the key information for UTI Banking & PSU Debt Fund

UTI Banking & PSU Debt Fund
Growth
Launch Date 3 Feb 14
NAV (06 Jun 25) ₹22.0272 ↑ 0.07   (0.31 %)
Net Assets (Cr) ₹792 on 30 Apr 25
Category Debt - Banking & PSU Debt
AMC UTI Asset Management Company Ltd
Rating
Risk Moderate
Expense Ratio 0.55
Sharpe Ratio 2.05
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 6.75%
Effective Maturity 2 Years 3 Months 25 Days
Modified Duration 2 Years 7 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,510
31 May 22₹11,376
31 May 23₹12,215
31 May 24₹12,975
31 May 25₹14,168

UTI Banking & PSU Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125
Invest Now

Returns for UTI Banking & PSU Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.4%
3 Month 3.8%
6 Month 5.4%
1 Year 9.6%
3 Year 7.8%
5 Year 7.3%
10 Year
15 Year
Since launch 7.2%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.6%
2023 6.7%
2022 10.3%
2021 2.8%
2020 8.9%
2019 -1%
2018 6.8%
2017 6.4%
2016 11.7%
2015 8.6%
Fund Manager information for UTI Banking & PSU Debt Fund
NameSinceTenure
Anurag Mittal1 Dec 213.5 Yr.

Data below for UTI Banking & PSU Debt Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash3.52%
Debt96.15%
Other0.33%
Debt Sector Allocation
SectorValue
Corporate52.89%
Government43.26%
Cash Equivalent3.52%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.38% Govt Stock 2027
Sovereign Bonds | -
12%₹93 Cr900,000,000
Axis Bank Limited
Debentures | -
7%₹56 Cr550
Export-Import Bank Of India
Debentures | -
6%₹51 Cr5,000
Small Industries Development Bank Of India
Debentures | -
6%₹51 Cr5,000
Power Finance Corporation Limited
Debentures | -
5%₹41 Cr400
Rural Electrification Corporation Limited
Debentures | -
5%₹36 Cr3,500
HDFC Bank Limited
Debentures | -
4%₹35 Cr350
Indian Railway Finance Corporation Limited
Debentures | -
4%₹31 Cr300
National Bank For Agriculture And Rural Development
Debentures | -
4%₹31 Cr3,000
National Bank For Agriculture And Rural Development
Debentures | -
3%₹26 Cr250

3. DSP BlackRock Banking and PSU Debt Fund

The investment objective of the Scheme is to seek to generate income and capital appreciation by primarily investing in a portfolio of high quality debt and money market securities that are issued by banks and public sector entities/undertakings.

DSP BlackRock Banking and PSU Debt Fund is a Debt - Banking & PSU Debt fund was launched on 14 Sep 13. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.8% since its launch.  Ranked 20 in Banking & PSU Debt category.  Return for 2024 was 8.6% , 2023 was 6.7% and 2022 was 3.2% .

Below is the key information for DSP BlackRock Banking and PSU Debt Fund

DSP BlackRock Banking and PSU Debt Fund
Growth
Launch Date 14 Sep 13
NAV (06 Jun 25) ₹24.2507 ↑ 0.01   (0.06 %)
Net Assets (Cr) ₹3,666 on 30 Apr 25
Category Debt - Banking & PSU Debt
AMC DSP BlackRock Invmt Managers Pvt. Ltd.
Rating
Risk Moderate
Expense Ratio 0.58
Sharpe Ratio 1.65
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 500
Exit Load 0-1 Months (0.25%),1 Months and above(NIL)
Yield to Maturity 6.86%
Effective Maturity 9 Years 10 Months 2 Days
Modified Duration 5 Years 1 Month 17 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,592
31 May 22₹10,831
31 May 23₹11,526
31 May 24₹12,320
31 May 25₹13,561

DSP BlackRock Banking and PSU Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for DSP BlackRock Banking and PSU Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1%
3 Month 4.3%
6 Month 5.3%
1 Year 10.3%
3 Year 7.8%
5 Year 6.3%
10 Year
15 Year
Since launch 7.8%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.6%
2023 6.7%
2022 3.2%
2021 3.1%
2020 10.9%
2019 9.9%
2018 6.3%
2017 5.4%
2016 10.6%
2015 8.6%
Fund Manager information for DSP BlackRock Banking and PSU Debt Fund
NameSinceTenure
Sandeep Yadav1 Aug 240.83 Yr.
Shantanu Godambe1 Jun 232 Yr.

Data below for DSP BlackRock Banking and PSU Debt Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash12.12%
Debt87.67%
Other0.21%
Debt Sector Allocation
SectorValue
Government48.87%
Corporate48.8%
Cash Equivalent2.12%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
8.3% Govt Stock 2042
Sovereign Bonds | -
5%₹181 Cr15,000,000
7.3% Govt Stock 2053
Sovereign Bonds | -
5%₹175 Cr16,000,000
↓ -1,500,000
7.34% Govt Stock 2064
Sovereign Bonds | -
4%₹161 Cr15,000,000
7.81% Govt Stock 2033
Sovereign Bonds | -
4%₹158 Cr15,000,000
↑ 10,000,000
Small Industries Development Bank Of India
Debentures | -
3%₹133 Cr12,500
Power Grid Corporation Of India Limited
Debentures | -
3%₹113 Cr1,050
Indian Railway Finance Corporation Limited
Debentures | -
3%₹110 Cr1,000
State Bank Of India
Debentures | -
3%₹109 Cr100
Power Grid Corporation Of India Limited
Debentures | -
3%₹105 Cr10,000
↑ 5,000
GAil (India) Limited
Debentures | -
3%₹105 Cr1,000

4. Kotak Banking and PSU Debt fund

To generate income by predominantly investing in debt & money market securities issued by Banks & PSUs and Reverse Repos in such securities, sovereign securities issued by the Central Government and State Governments, and / or any security unconditionally guaranteed by the Govt. of India.

Kotak Banking and PSU Debt fund is a Debt - Banking & PSU Debt fund was launched on 29 Dec 98. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of since its launch.  Ranked 19 in Banking & PSU Debt category.  Return for 2024 was 8% , 2023 was 6.8% and 2022 was 3.6% .

Below is the key information for Kotak Banking and PSU Debt fund

Kotak Banking and PSU Debt fund
Growth
Launch Date 29 Dec 98
NAV (06 Jun 25) ₹65.8834 ↑ 0.18   (0.27 %)
Net Assets (Cr) ₹6,013 on 30 Apr 25
Category Debt - Banking & PSU Debt
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.81
Sharpe Ratio 1.94
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 6.97%
Effective Maturity 5 Years 5 Months 23 Days
Modified Duration 3 Years 8 Months 16 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,674
31 May 22₹10,987
31 May 23₹11,729
31 May 24₹12,523
31 May 25₹13,746

Kotak Banking and PSU Debt fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Kotak Banking and PSU Debt fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.4%
3 Month 4.2%
6 Month 5.6%
1 Year 10.2%
3 Year 8%
5 Year 6.7%
10 Year
15 Year
Since launch
Historical performance (Yearly) on absolute basis
YearReturns
2024 8%
2023 6.8%
2022 3.6%
2021 3.9%
2020 10.5%
2019 10.8%
2018 6.7%
2017 6.2%
2016 10%
2015 8.6%
Fund Manager information for Kotak Banking and PSU Debt fund
NameSinceTenure
Deepak Agrawal1 Aug 0816.84 Yr.
Dharmesh Thakar1 Jun 250 Yr.

Data below for Kotak Banking and PSU Debt fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash2.44%
Debt97.3%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate55.75%
Government41.55%
Cash Equivalent2.44%
Credit Quality
RatingValue
AA2.54%
AAA97.46%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
8%₹522 Cr49,343,730
Power Finance Corp Ltd. 0.076%
Debentures | -
5%₹339 Cr33,000
7.1% Govt Stock 2034
Sovereign Bonds | -
5%₹288 Cr27,336,520
↓ -10,000,000
National Housing Bank 0.068%
Debentures | -
3%₹200 Cr20,000
Indian Oil Corporation Limited
Debentures | -
3%₹194 Cr19,000
↑ 19,000
Power Grid Corporation Of India Limited
Debentures | -
3%₹185 Cr20,002
7.81% Govt Stock 2033
Sovereign Bonds | -
3%₹181 Cr17,432,280
National Bank For Agriculture And Rural Development
Debentures | -
3%₹165 Cr16,200
↓ -5,000
HDFC Bank Limited
Debentures | -
3%₹157 Cr1,500
Rural Electrification Corporation Limited
Debentures | -
3%₹156 Cr15,000

5. Aditya Birla Sun Life Banking & PSU Debt Fund

(Erstwhile Aditya Birla Sun Life Treasury Optimizer Fund)

An Open-ended short term income scheme with the objective to generate income and capital appreciation by investing 100% of the corpus in a diversified portfolio of debt and money market securities with relatively low levels of interest rate risk.

Aditya Birla Sun Life Banking & PSU Debt Fund is a Debt - Banking & PSU Debt fund was launched on 9 May 08. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.9% since its launch.  Ranked 9 in Banking & PSU Debt category.  Return for 2024 was 7.9% , 2023 was 6.9% and 2022 was 3.7% .

Below is the key information for Aditya Birla Sun Life Banking & PSU Debt Fund

Aditya Birla Sun Life Banking & PSU Debt Fund
Growth
Launch Date 9 May 08
NAV (06 Jun 25) ₹369.461 ↑ 0.78   (0.21 %)
Net Assets (Cr) ₹8,826 on 30 Apr 25
Category Debt - Banking & PSU Debt
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderate
Expense Ratio 0.7
Sharpe Ratio 2
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 6.91%
Effective Maturity 5 Years 7 Days
Modified Duration 3 Years 9 Months 18 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,699
31 May 22₹11,009
31 May 23₹11,718
31 May 24₹12,505
31 May 25₹13,730

Aditya Birla Sun Life Banking & PSU Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Aditya Birla Sun Life Banking & PSU Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.4%
3 Month 4.2%
6 Month 5.6%
1 Year 10.1%
3 Year 7.8%
5 Year 6.6%
10 Year
15 Year
Since launch 7.9%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.9%
2023 6.9%
2022 3.7%
2021 3.6%
2020 10.9%
2019 9.9%
2018 6.6%
2017 5.6%
2016 12.3%
2015 8.5%
Fund Manager information for Aditya Birla Sun Life Banking & PSU Debt Fund
NameSinceTenure
Kaustubh Gupta29 Sep 0915.68 Yr.
Harshil Suvarnkar22 Mar 214.2 Yr.

Data below for Aditya Birla Sun Life Banking & PSU Debt Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash5.91%
Debt93.79%
Other0.3%
Debt Sector Allocation
SectorValue
Corporate64.92%
Government31.96%
Cash Equivalent2.82%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Power Finance Corporation Ltd.
Debentures | -
3%₹303 Cr30,000
Power Finance Corp Ltd. 7.6%
Debentures | -
3%₹256 Cr25,000
Small Industries Development Bank Of India
Debentures | -
3%₹246 Cr24,500
State Bank Of India
Debentures | -
2%₹214 Cr210
National Bank For Agriculture And Rural Development
Debentures | -
2%₹204 Cr20,000
7.48% National Bank For Agriculture And Rural Development
Debentures | -
2%₹203 Cr20,000
REC Ltd. 7.71%
Debentures | -
2%₹198 Cr19,500
7.1% Govt Stock 2034
Sovereign Bonds | -
2%₹195 Cr18,624,000
↓ -2,500,000
Small Industries Development Bank Of India
Debentures | -
2%₹177 Cr17,500
Rural Electrification Corporation Limited
Debentures | -
2%₹176 Cr17,500

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Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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