+91-22-489139096 Best Debt Mutual Funds for Lump sum Investments 2026
Debt Mutual Fund schemes in India have grown over the years. As a result, the best performing mutual debt funds in the market keep on changing. There are various rating systems in place to judge a mutual fund scheme, namely CRISIL, Morning Star, ICRA. These systems evaluate a mutual fund in terms of returns, standard deviation, credit quality of securities, rate movement guidance by RBI, etc.
Why To Invest Lump Sum in Debt Mutual Funds?
- Better return than prevailing Fixed Deposit (FD) & Recurring deposit (RD) rates across banks
- Returns are linked to debt markets
- Immediate (T+1) redemption online
- Indexation (Debt Taxation benefits) benefits on returns over three years
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Best Lumpsum Debt Mutual Funds FY 26 - 27
Below are the top ranked funds from Debt Categories primarily funds having AUM > 500 Crore & are in Ultra-short, Corporate bond, Credit Risk, Low Duration sub categories && Having maturity of less than 3 years and providing highest yields.
Fund Selection Methodology used to find 6 funds
Top 6 Lump sum Debt Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2024 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Nippon India Credit Risk Fund Growth ₹38.1174
↑ 0.01 ₹1,556 500 2.5 3.6 7.4 8.2 8.9 8.54% 1Y 11M 5D 2Y 3M 14D Kotak Credit Risk Fund Growth ₹31.9599
↑ 0.01 ₹770 5,000 2.8 3.4 7.1 7.7 9.1 8.36% 1Y 9M 11D 2Y 8M 12D Aditya Birla Sun Life Credit Risk Fund Growth ₹25.4345
↑ 0.00 ₹1,532 1,000 2.9 4.5 12.2 12.2 13.4 7.98% 2Y 29D 2Y 9M 4D Aditya Birla Sun Life Savings Fund Growth ₹591.267
↑ 0.21 ₹18,189 1,000 2.2 3.5 6.5 7.3 7.4 7.45% 5M 26D 6M 18D Aditya Birla Sun Life Low Duration Fund Growth ₹701.042
↑ 0.35 ₹9,914 1,000 2 2.9 5.6 6.6 7 7.45% 1Y 4D 1Y 1M 24D Nippon India Low Duration Fund Growth ₹4,016.6
↑ 1.76 ₹7,804 500 2.1 3.2 6 6.9 7.2 7.44% 11M 15D 1Y 3M 13D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Sep 26 Research Highlights & Commentary of 6 Funds showcased
Commentary Nippon India Credit Risk Fund Kotak Credit Risk Fund Aditya Birla Sun Life Credit Risk Fund Aditya Birla Sun Life Savings Fund Aditya Birla Sun Life Low Duration Fund Nippon India Low Duration Fund Point 1 Lower mid AUM (₹1,556 Cr). Bottom quartile AUM (₹770 Cr). Bottom quartile AUM (₹1,532 Cr). Highest AUM (₹18,189 Cr). Upper mid AUM (₹9,914 Cr). Upper mid AUM (₹7,804 Cr). Point 2 Established history (21+ yrs). Established history (16+ yrs). Established history (11+ yrs). Established history (23+ yrs). Oldest track record among peers (28 yrs). Established history (19+ yrs). Point 3 Rating: 2★ (bottom quartile). Rating: 3★ (upper mid). Not Rated. Top rated. Rating: 3★ (upper mid). Rating: 3★ (lower mid). Point 4 Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderately Low. Risk profile: Moderately Low. Point 5 1Y return: 7.35% (upper mid). 1Y return: 7.11% (upper mid). 1Y return: 12.20% (top quartile). 1Y return: 6.50% (lower mid). 1Y return: 5.60% (bottom quartile). 1Y return: 6.02% (bottom quartile). Point 6 1M return: 0.49% (bottom quartile). 1M return: 0.60% (upper mid). 1M return: 0.58% (upper mid). 1M return: 0.66% (top quartile). 1M return: 0.47% (bottom quartile). 1M return: 0.58% (lower mid). Point 7 Sharpe: 0.92 (upper mid). Sharpe: 0.55 (lower mid). Sharpe: 1.77 (top quartile). Sharpe: 0.81 (upper mid). Sharpe: -0.25 (bottom quartile). Sharpe: 0.15 (bottom quartile). Point 8 Information ratio: 0.00 (top quartile). Information ratio: 0.00 (upper mid). 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): 8.54% (top quartile). Yield to maturity (debt): 8.36% (upper mid). Yield to maturity (debt): 7.98% (upper mid). Yield to maturity (debt): 7.45% (lower mid). Yield to maturity (debt): 7.45% (bottom quartile). Yield to maturity (debt): 7.44% (bottom quartile). Point 10 Modified duration: 1.93 yrs (bottom quartile). Modified duration: 1.78 yrs (lower mid). Modified duration: 2.08 yrs (bottom quartile). Modified duration: 0.49 yrs (top quartile). Modified duration: 1.01 yrs (upper mid). Modified duration: 0.96 yrs (upper mid). Nippon India Credit Risk Fund
Kotak Credit Risk Fund
Aditya Birla Sun Life Credit Risk Fund
Aditya Birla Sun Life Savings Fund
Aditya Birla Sun Life Low Duration Fund
Nippon India Low Duration Fund
*List of Debt Mutual Funds having net assets > 500 Crore and Fund have assets under manegement for atleast 3 years.
(Erstwhile Reliance Regular Savings Fund - Debt Plan) The primary investment objective of this option is to generate optimal returns consistent with moderate level of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly investments shall predominantly be made in Debt & Money Market Instruments. Below is the key information for Nippon India Credit Risk Fund Returns up to 1 year are on (Erstwhile Kotak Income Opportunities Fund) The investment objective of the scheme is to generate income by investing in debt/ and money market securities across the yield curve and credit spectrum. The scheme will also seek to maintain reasonable liquidity within the fund. Research Highlights for Kotak Credit Risk Fund Below is the key information for Kotak Credit Risk Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Corporate Bond Fund) The investment objective of the Scheme is to generate returns by predominantly investing in a portfolio of corporate debt securities with short to medium term maturities across the credit spectrum within the investment grade. The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved. Research Highlights for Aditya Birla Sun Life Credit Risk Fund Below is the key information for Aditya Birla Sun Life Credit Risk Fund Returns up to 1 year are on The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents. Research Highlights for Aditya Birla Sun Life Savings Fund Below is the key information for Aditya Birla Sun Life Savings Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Cash Manager) An Open ended Income scheme with the objective to provide income which is consistent with a portfolio through investments in a basket of debt and money market instruments of very short maturities with a view to provide reasonable returns. Research Highlights for Aditya Birla Sun Life Low Duration Fund Below is the key information for Aditya Birla Sun Life Low Duration Fund Returns up to 1 year are on (Erstwhile Reliance Money Manager Fund) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities. Research Highlights for Nippon India Low Duration Fund Below is the key information for Nippon India Low Duration Fund Returns up to 1 year are on 1. Nippon India Credit Risk Fund
Nippon India Credit Risk Fund
Growth Launch Date 8 Jun 05 NAV (04 Sep 26) ₹38.1174 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹1,556 on 31 Jul 26 Category Debt - Credit Risk AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderate Expense Ratio 1.46 Sharpe Ratio 0.92 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 100 Exit Load 0-12 Months (1%),12 Months and above(NIL) Yield to Maturity 8.54% Effective Maturity 2 Years 3 Months 14 Days Modified Duration 1 Year 11 Months 5 Days Growth of 10,000 investment over the years.
Date Value Returns for Nippon India Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.5% 3 Month 2.5% 6 Month 3.6% 1 Year 7.4% 3 Year 8.2% 5 Year 7.1% 10 Year 15 Year Since launch 6.5% Historical performance (Yearly) on absolute basis
Year Returns 2024 8.9% 2023 8.3% 2022 7.9% 2021 3.9% 2020 13.5% 2019 -5.9% 2018 1.9% 2017 6.1% 2016 7% 2015 10% Fund Manager information for Nippon India Credit Risk Fund
Name Since Tenure Data below for Nippon India Credit Risk Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 2. Kotak Credit Risk Fund
Kotak Credit Risk Fund
Growth Launch Date 11 May 10 NAV (04 Sep 26) ₹31.9599 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹770 on 31 Jul 26 Category Debt - Credit Risk AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 1.71 Sharpe Ratio 0.55 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Years (1%),1 Years and above(NIL) Yield to Maturity 8.36% Effective Maturity 2 Years 8 Months 12 Days Modified Duration 1 Year 9 Months 11 Days Growth of 10,000 investment over the years.
Date Value Returns for Kotak Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.6% 3 Month 2.8% 6 Month 3.4% 1 Year 7.1% 3 Year 7.7% 5 Year 5.8% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2024 9.1% 2023 7.1% 2022 6.4% 2021 0.9% 2020 5.3% 2019 6.6% 2018 9% 2017 6.2% 2016 6.6% 2015 10.4% Fund Manager information for Kotak Credit Risk Fund
Name Since Tenure Data below for Kotak Credit Risk Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 3. Aditya Birla Sun Life Credit Risk Fund
Aditya Birla Sun Life Credit Risk Fund
Growth Launch Date 17 Apr 15 NAV (04 Sep 26) ₹25.4345 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹1,532 on 31 Jul 26 Category Debt - Credit Risk AMC Birla Sun Life Asset Management Co Ltd Rating Risk Moderate Expense Ratio 1.54 Sharpe Ratio 1.77 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load 0-365 Days (1%),365 Days and above(NIL) Yield to Maturity 7.98% Effective Maturity 2 Years 9 Months 4 Days Modified Duration 2 Years 29 Days Growth of 10,000 investment over the years.
Date Value Returns for Aditya Birla Sun Life Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.6% 3 Month 2.9% 6 Month 4.5% 1 Year 12.2% 3 Year 12.2% 5 Year 10% 10 Year 15 Year Since launch 8.5% Historical performance (Yearly) on absolute basis
Year Returns 2024 13.4% 2023 11.9% 2022 6.9% 2021 7.1% 2020 6.4% 2019 9.4% 2018 2.1% 2017 6.6% 2016 8.1% 2015 10.3% Fund Manager information for Aditya Birla Sun Life Credit Risk Fund
Name Since Tenure Data below for Aditya Birla Sun Life Credit Risk Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 4. Aditya Birla Sun Life Savings Fund
Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (04 Sep 26) ₹591.267 ↑ 0.21 (0.04 %) Net Assets (Cr) ₹18,189 on 31 Jul 26 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.57 Sharpe Ratio 0.81 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.45% Effective Maturity 6 Months 18 Days Modified Duration 5 Months 26 Days Growth of 10,000 investment over the years.
Date Value Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.7% 3 Month 2.2% 6 Month 3.5% 1 Year 6.5% 3 Year 7.3% 5 Year 6.5% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.4% 2023 7.9% 2022 7.2% 2021 4.8% 2020 3.9% 2019 7% 2018 8.5% 2017 7.6% 2016 7.2% 2015 9.2% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Data below for Aditya Birla Sun Life Savings Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 5. Aditya Birla Sun Life Low Duration Fund
Aditya Birla Sun Life Low Duration Fund
Growth Launch Date 14 May 98 NAV (04 Sep 26) ₹701.042 ↑ 0.35 (0.05 %) Net Assets (Cr) ₹9,914 on 31 Jul 26 Category Debt - Low Duration AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 1.22 Sharpe Ratio -0.25 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.45% Effective Maturity 1 Year 1 Month 24 Days Modified Duration 1 Year 4 Days Growth of 10,000 investment over the years.
Date Value Returns for Aditya Birla Sun Life Low Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.5% 3 Month 2% 6 Month 2.9% 1 Year 5.6% 3 Year 6.6% 5 Year 5.9% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 7% 2023 7.1% 2022 6.7% 2021 4.3% 2020 3.5% 2019 7.7% 2018 8.2% 2017 7.2% 2016 6.4% 2015 8.5% Fund Manager information for Aditya Birla Sun Life Low Duration Fund
Name Since Tenure Data below for Aditya Birla Sun Life Low Duration Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 6. Nippon India Low Duration Fund
Nippon India Low Duration Fund
Growth Launch Date 20 Mar 07 NAV (04 Sep 26) ₹4,016.6 ↑ 1.76 (0.04 %) Net Assets (Cr) ₹7,804 on 31 Jul 26 Category Debt - Low Duration AMC Nippon Life Asset Management Ltd. Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.94 Sharpe Ratio 0.15 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.44% Effective Maturity 1 Year 3 Months 13 Days Modified Duration 11 Months 15 Days Growth of 10,000 investment over the years.
Date Value Returns for Nippon India Low Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.6% 3 Month 2.1% 6 Month 3.2% 1 Year 6% 3 Year 6.9% 5 Year 6.1% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.2% 2023 7.4% 2022 6.7% 2021 4.2% 2020 4.1% 2019 7.3% 2018 7% 2017 7.4% 2016 6.6% 2015 8.5% Fund Manager information for Nippon India Low Duration Fund
Name Since Tenure Data below for Nippon India Low Duration Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity
Smart Tips to Look for in Debt Funds
1. Yield
The yield is a measure of the interest income generated by the Bonds in the Portfolio.
For instance, let's assume that a bond has a face value of INR 100 with an 8 percent coupon rate. This means that the investor will earn INR 8 p.a., on each bond that he invests in. As the bonds are traded in the open market, the price will fluctuate each Business Day. The interest rates rise and fall and demand for the bonds moves up and down. And this impacts the price of the bond. Let’s assume interest rates rise to 10 percent. Even then the investor will continue to earn INR 8. So to increase the yield to 10 percent, which is the current market rate of interest, the price of the bond will have to drop to INR 80.
In another instance, lets assume that the interest rates fall to 6 percent. Again, the investor will continue to earn INR 8. This time the price of the bond will have to go up to INR 133.
If we look at these assumptions, there are two aspects to it- the one is that the yield is not fixed, but fluctuates to changes in the interest rate. The second one is the price of the bond moves inversely to interest rates. It moves to maintain a level where it will attract buyers.
2. Yield to Maturity
The yield to maturity(YTM) of a debt mutual fund indicates the running yield of the fund. When comparing debt funds on the basis of YTM, one should also look at that fact that how is the extra yield being generated. Is this at the cost of as lower portfolio quality? Investing in not so good quality instruments has its own issues. You don't want to end up investing in a debt fund which has such bonds or securities that may default later on. So, always look at the portfolio yield and balance it off with the credit quality.
3. Modified Duration
Modified duration provides a fair indication of a bond’s sensitivity to a change in interest rates. The higher the duration, the more Volatility the bond exhibits with a change in interest rates
4. Credit Quality of Portfolio
In order to invest in Best Debt Funds, checking the credit quality of the bonds and debt securities is an essential parameter. Bonds are assigned a credit rating by various agencies based on their ability to pay the money back. A bond with AAA rating is considered to be the best credit rating and also implies a safe and secure investment. If one truly wants safety and considers this as the paramount parameter in selecting the best debt fund, then getting into a fund with very high-quality debt instruments (AAA or AA+) may be the desired option.
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FAQs
1. How do debt fund managers identify which is high-quality security?
A: Debt fund managers have their techniques for evaluating each bond and assessing the debtor's chances of defaulting to pay the bond. Usually, the higher the credit rating lesser is the chance for the creditor defaulting.
2. Why is debt mutual funds low-risk?
A: Debt mutual funds deal with securities and bonds along other money market instruments. The chances of these instruments failing are usually less, and hence, your investment will remain secure, thereby making debt mutual funds low-risk investments.
3. Do fund managers invest in low-quality securities?
A: Yes, sometimes fund managers do invest in low-quality securities if chances of good ROI exist. However, this will be a calculated risk taken by your fund manager and only if the portfolio of investment already has stable, high-quality securities.
4. Is there any short-term debt mutual fund?
A: Yes, if you opt for a Liquid Fund in which investments are made in money market instruments that have a maturity of 91 days, then you can realize your investment in a matter of three months. This is a short-term investment that you can undertake to get a better understanding of debt mutual funds.
5. Can I invest long-term in a debt mutual fund?
A: Yes, you can invest long-term in debt mutual funds. For example, suppose you invest in the Nippon India Credit Risk Fund or the ICICI Prudential Regular Savings Fund. In that case, it is better that you hold your investment at least for one year, 5 months, and 19 days and 2 years, one month, and 2 days respectively, to get maximum ROI. But you can keep investing beyond that for 3 years.
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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Research Highlights for Nippon India Credit Risk Fund