+91-22-48913909Top 5 Best Banking and PSU Debt Funds 2025
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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Top Performing Banking and PSU Debt Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2024 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity UTI Banking & PSU Debt Fund Growth ₹22.4418
↑ 0.01 ₹813 1.4 3.5 8.1 7.6 7.6 6.61% 1Y 8M 12D 1Y 11M 8D HDFC Banking and PSU Debt Fund Growth ₹23.5114
↑ 0.01 ₹5,890 1.3 2.9 7.9 7.6 7.9 6.94% 3Y 5M 5D 4Y 11M 19D ICICI Prudential Banking and PSU Debt Fund Growth ₹33.4423
↑ 0.01 ₹9,788 1.3 3 7.9 7.6 7.9 6.98% 3Y 2M 12D 6Y 11D Kotak Banking and PSU Debt fund Growth ₹66.8221
↑ 0.02 ₹5,795 1.3 2.9 7.9 7.6 8 7.02% 3Y 4M 10D 5Y 7M 17D Aditya Birla Sun Life Banking & PSU Debt Fund Growth ₹374.656
↑ 0.08 ₹9,180 1.3 2.9 7.9 7.6 7.9 7.05% 3Y 9M 29D 5Y 3M 11D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 31 Oct 25 Research Highlights & Commentary of 5 Funds showcased
Commentary UTI Banking & PSU Debt Fund HDFC Banking and PSU Debt Fund ICICI Prudential Banking and PSU Debt Fund Kotak Banking and PSU Debt fund Aditya Birla Sun Life Banking & PSU Debt Fund Point 1 Bottom quartile AUM (₹813 Cr). Lower mid AUM (₹5,890 Cr). Highest AUM (₹9,788 Cr). Bottom quartile AUM (₹5,795 Cr). Upper mid AUM (₹9,180 Cr). Point 2 Established history (11+ yrs). Established history (11+ yrs). Established history (15+ yrs). Oldest track record among peers (26 yrs). Established history (17+ yrs). Point 3 Top rated. Rating: 5★ (upper mid). Rating: 4★ (lower mid). Rating: 4★ (bottom quartile). Rating: 4★ (bottom quartile). Point 4 Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderate. Point 5 1Y return: 8.09% (top quartile). 1Y return: 7.88% (lower mid). 1Y return: 7.94% (upper mid). 1Y return: 7.87% (bottom quartile). 1Y return: 7.86% (bottom quartile). Point 6 1M return: 0.61% (bottom quartile). 1M return: 0.84% (upper mid). 1M return: 0.74% (bottom quartile). 1M return: 0.88% (top quartile). 1M return: 0.83% (lower mid). Point 7 Sharpe: 1.46 (top quartile). Sharpe: 0.73 (bottom quartile). Sharpe: 0.98 (upper mid). Sharpe: 0.75 (lower mid). Sharpe: 0.73 (bottom quartile). Point 8 Information ratio: 0.00 (top quartile). Information ratio: 0.00 (upper mid). Information ratio: 0.00 (lower mid). Information ratio: 0.00 (bottom quartile). Information ratio: 0.00 (bottom quartile). Point 9 Yield to maturity (debt): 6.61% (bottom quartile). Yield to maturity (debt): 6.94% (bottom quartile). Yield to maturity (debt): 6.98% (lower mid). Yield to maturity (debt): 7.02% (upper mid). Yield to maturity (debt): 7.05% (top quartile). Point 10 Modified duration: 1.70 yrs (top quartile). Modified duration: 3.43 yrs (bottom quartile). Modified duration: 3.20 yrs (upper mid). Modified duration: 3.36 yrs (lower mid). Modified duration: 3.83 yrs (bottom quartile). UTI Banking & PSU Debt Fund
HDFC Banking and PSU Debt Fund
ICICI Prudential Banking and PSU Debt Fund
Kotak Banking and PSU Debt fund
Aditya Birla Sun Life Banking & PSU Debt Fund
Top 5 Best Performing Banking and PSU Debt Funds
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). Below is the key information for UTI Banking & PSU Debt Fund Returns up to 1 year are on 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. Research Highlights for HDFC Banking and PSU Debt Fund Below is the key information for HDFC Banking and PSU Debt Fund Returns up to 1 year are on The investment objective of the Scheme is to generate regular income through investments in a basket of debt and money market instruments consisting predominantly of securities issued by entities such as Banks and Public Sector Undertakings (PSU) with a view to providing reasonable returns,while maintaining an optimum balance of safety, liquidity and yield. Research Highlights for ICICI Prudential Banking and PSU Debt Fund Below is the key information for ICICI Prudential Banking and PSU Debt Fund Returns up to 1 year are on 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. Research Highlights for Kotak Banking and PSU Debt fund Below is the key information for Kotak Banking and PSU Debt fund Returns up to 1 year are on (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. Research Highlights for Aditya Birla Sun Life Banking & PSU Debt Fund Below is the key information for Aditya Birla Sun Life Banking & PSU Debt Fund Returns up to 1 year are on 1. UTI Banking & PSU Debt Fund
UTI Banking & PSU Debt Fund
Growth Launch Date 3 Feb 14 NAV (31 Oct 25) ₹22.4418 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹813 on 31 Aug 25 Category Debt - Banking & PSU Debt AMC UTI Asset Management Company Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.54 Sharpe Ratio 1.46 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.61% Effective Maturity 1 Year 11 Months 8 Days Modified Duration 1 Year 8 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 20 ₹10,000 31 Oct 21 ₹10,298 31 Oct 22 ₹11,261 31 Oct 23 ₹12,014 31 Oct 24 ₹12,979 Returns for UTI Banking & PSU Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 31 Oct 25 Duration Returns 1 Month 0.6% 3 Month 1.4% 6 Month 3.5% 1 Year 8.1% 3 Year 7.6% 5 Year 7% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 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
Name Since Tenure Anurag Mittal 1 Dec 21 3.84 Yr. Data below for UTI Banking & PSU Debt Fund as on 31 Aug 25
Asset Allocation
Asset Class Value Cash 5.57% Debt 94.11% Other 0.33% Debt Sector Allocation
Sector Value Corporate 54.57% Government 39.54% Cash Equivalent 5.57% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.38% Govt Stock 2027
Sovereign Bonds | -11% ₹93 Cr 900,000,000 Axis Bank Limited
Debentures | -7% ₹56 Cr 550 Export Import Bank Of India
Debentures | -6% ₹51 Cr 5,000 Small Industries Development Bank Of India
Debentures | -6% ₹51 Cr 5,000 Power Finance Corporation Limited
Debentures | -5% ₹41 Cr 400 Rural Electrification Corporation Limited
Debentures | -4% ₹36 Cr 3,500 National Housing Bank
Debentures | -4% ₹36 Cr 3,500 HDFC Bank Limited
Debentures | -4% ₹35 Cr 350 National Bank For Agriculture And Rural Development
Debentures | -4% ₹31 Cr 3,000 Indian Railway Finance Corporation Limited
Debentures | -4% ₹31 Cr 300 2. HDFC Banking and PSU Debt Fund
HDFC Banking and PSU Debt Fund
Growth Launch Date 26 Mar 14 NAV (31 Oct 25) ₹23.5114 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹5,890 on 31 Aug 25 Category Debt - Banking & PSU Debt AMC HDFC Asset Management Company Limited Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.78 Sharpe Ratio 0.73 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load NIL Yield to Maturity 6.94% Effective Maturity 4 Years 11 Months 19 Days Modified Duration 3 Years 5 Months 5 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 20 ₹10,000 31 Oct 21 ₹10,439 31 Oct 22 ₹10,730 31 Oct 23 ₹11,440 31 Oct 24 ₹12,374 Returns for HDFC Banking and PSU Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 31 Oct 25 Duration Returns 1 Month 0.8% 3 Month 1.3% 6 Month 2.9% 1 Year 7.9% 3 Year 7.6% 5 Year 5.9% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 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
Name Since Tenure Anil Bamboli 26 Mar 14 11.53 Yr. Dhruv Muchhal 22 Jun 23 2.28 Yr. Data below for HDFC Banking and PSU Debt Fund as on 31 Aug 25
Asset Allocation
Asset Class Value Cash 4.9% Debt 94.81% Other 0.3% Debt Sector Allocation
Sector Value Corporate 50.87% Government 41.79% Cash Equivalent 4.9% Securitized 2.15% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Indian Railway Finance Corporation Limited
Debentures | -5% ₹282 Cr 27,500 Small Industries Development Bank Of India
Debentures | -4% ₹226 Cr 22,500 Indian Railway Finance Corporation Limited
Debentures | -3% ₹205 Cr 20,000 7.18% Govt Stock 2033
Sovereign Bonds | -3% ₹172 Cr 16,500,000 Rec Limited
Debentures | -3% ₹153 Cr 1,500 Bajaj Housing Finance Limited
Debentures | -3% ₹153 Cr 15,000 Housing And Urban Development Corporation Limited
Debentures | -3% ₹152 Cr 15,000 7.26% Govt Stock 2033
Sovereign Bonds | -3% ₹151 Cr 14,500,000 State Bank Of India
Debentures | -2% ₹145 Cr 145 Housing And Urban Development Corporation Limited
Debentures | -2% ₹132 Cr 1,250 3. ICICI Prudential Banking and PSU Debt Fund
ICICI Prudential Banking and PSU Debt Fund
Growth Launch Date 1 Jan 10 NAV (31 Oct 25) ₹33.4423 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹9,788 on 15 Sep 25 Category Debt - Banking & PSU Debt AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.74 Sharpe Ratio 0.98 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 6.98% Effective Maturity 6 Years 11 Days Modified Duration 3 Years 2 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 20 ₹10,000 31 Oct 21 ₹10,502 31 Oct 22 ₹10,901 31 Oct 23 ₹11,670 31 Oct 24 ₹12,588 Returns for ICICI Prudential Banking and PSU Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 31 Oct 25 Duration Returns 1 Month 0.7% 3 Month 1.3% 6 Month 3% 1 Year 7.9% 3 Year 7.6% 5 Year 6.3% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.9% 2023 7.3% 2022 4.3% 2021 4.2% 2020 9.3% 2019 10.1% 2018 5.7% 2017 5.6% 2016 12.6% 2015 8.6% Fund Manager information for ICICI Prudential Banking and PSU Debt Fund
Name Since Tenure Manish Banthia 13 Sep 24 1.05 Yr. Rohit Lakhotia 12 Jun 23 2.31 Yr. Data below for ICICI Prudential Banking and PSU Debt Fund as on 15 Sep 25
Asset Allocation
Asset Class Value Cash 4.88% Debt 94.81% Other 0.3% Debt Sector Allocation
Sector Value Corporate 55.93% Government 34.72% Securitized 4.66% Cash Equivalent 4.39% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity LIC Housing Finance Ltd
Debentures | -5% ₹459 Cr 45,000 National Bank For Agriculture And Rural Development
Debentures | -4% ₹408 Cr 40,000 7.34% Govt Stock 2064
Sovereign Bonds | -4% ₹373 Cr 36,467,800 Small Industries Development Bank Of India
Debentures | -3% ₹331 Cr 32,500
↑ 5,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹306 Cr 30,000
↑ 5,000 SHIVSHAKTI SECURITISATION TRUST
Unlisted bonds | -2% ₹228 Cr 225 SIDDHIVINAYAK SECURITISATION TRUST
Unlisted bonds | -2% ₹227 Cr 225 Mahanagar Telephone Nigam Limited
Debentures | -2% ₹225 Cr 22,500 HDFC Bank Limited
Debentures | -2% ₹215 Cr 20,800 Small Industries Development Bank Of India
Debentures | -2% ₹204 Cr 20,000 4. Kotak Banking and PSU Debt fund
Kotak Banking and PSU Debt fund
Growth Launch Date 29 Dec 98 NAV (31 Oct 25) ₹66.8221 ↑ 0.02 (0.03 %) Net Assets (Cr) ₹5,795 on 31 Aug 25 Category Debt - Banking & PSU Debt AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.76 Sharpe Ratio 0.75 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.02% Effective Maturity 5 Years 7 Months 17 Days Modified Duration 3 Years 4 Months 10 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 20 ₹10,000 31 Oct 21 ₹10,456 31 Oct 22 ₹10,769 31 Oct 23 ₹11,470 31 Oct 24 ₹12,430 Returns for Kotak Banking and PSU Debt fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 31 Oct 25 Duration Returns 1 Month 0.9% 3 Month 1.3% 6 Month 2.9% 1 Year 7.9% 3 Year 7.6% 5 Year 6% 10 Year 15 Year Since launch Historical performance (Yearly) on absolute basis
Year Returns 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
Name Since Tenure Deepak Agrawal 1 Aug 08 17.18 Yr. Dharmesh Thakar 1 Jun 25 0.33 Yr. Data below for Kotak Banking and PSU Debt fund as on 31 Aug 25
Asset Allocation
Asset Class Value Cash 3.68% Debt 96.01% Other 0.3% Debt Sector Allocation
Sector Value Credit Quality
Rating Value AA 2.66% AAA 97.34% Top Securities Holdings / Portfolio
Name Holding Value Quantity Power Finance Corporation Limited
Debentures | -6% ₹338 Cr 33,000 7.09% Govt Stock 2054
Sovereign Bonds | -4% ₹244 Cr 24,300,000 National Housing Bank
Debentures | -4% ₹223 Cr 22,500 6.68% Govt Stock 2040
Sovereign Bonds | -4% ₹208 Cr 21,000,000
↑ 10,000,000 7.18% Govt Stock 2033
Sovereign Bonds | -3% ₹201 Cr 19,343,730
↓ -10,000,000 Indian Oil Corporation Limited
Debentures | -3% ₹195 Cr 19,000 Power Grid Corporation Of India Limited
Debentures | -3% ₹164 Cr 20,004
↑ 02 HDFC Bank Limited
Debentures | -3% ₹157 Cr 1,500 Rec Limited
Debentures | -3% ₹155 Cr 15,000 State Bank Of India
Debentures | -2% ₹143 Cr 1,450 5. Aditya Birla Sun Life Banking & PSU Debt Fund
Aditya Birla Sun Life Banking & PSU Debt Fund
Growth Launch Date 9 May 08 NAV (31 Oct 25) ₹374.656 ↑ 0.08 (0.02 %) Net Assets (Cr) ₹9,180 on 31 Aug 25 Category Debt - Banking & PSU Debt AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.73 Sharpe Ratio 0.73 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.05% Effective Maturity 5 Years 3 Months 11 Days Modified Duration 3 Years 9 Months 29 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 20 ₹10,000 31 Oct 21 ₹10,420 31 Oct 22 ₹10,745 31 Oct 23 ₹11,454 31 Oct 24 ₹12,398 Returns for Aditya Birla Sun Life Banking & PSU Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 31 Oct 25 Duration Returns 1 Month 0.8% 3 Month 1.3% 6 Month 2.9% 1 Year 7.9% 3 Year 7.6% 5 Year 6% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 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
Name Since Tenure Kaustubh Gupta 29 Sep 09 16.02 Yr. Harshil Suvarnkar 22 Mar 21 4.53 Yr. Data below for Aditya Birla Sun Life Banking & PSU Debt Fund as on 31 Aug 25
Asset Allocation
Asset Class Value Cash 3.97% Debt 95.74% Other 0.3% Debt Sector Allocation
Sector Value Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Power Grid Corporation Of India Limited
Debentures | -4% ₹344 Cr 34,500 Power Finance Corporation Limited
Debentures | -3% ₹303 Cr 30,000 Small Industries Development Bank Of India
Debentures | -3% ₹246 Cr 24,500 Power Finance Corporation Limited
Debentures | -3% ₹231 Cr 22,500 7.1% Govt Stock 2034
Sovereign Bonds | -2% ₹226 Cr 21,789,000 National Housing Bank
Debentures | -2% ₹223 Cr 22,500 National Bank For Agriculture And Rural Development
Debentures | -2% ₹219 Cr 21,500
↑ 2,500 State Bank Of India
Debentures | -2% ₹212 Cr 210 Indian Railway Finance Corporation Limited
Debentures | -2% ₹198 Cr 20,000 HDFC Bank Limited
Debentures | -2% ₹188 Cr 1,800
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Research Highlights for UTI Banking & PSU Debt Fund