Table of Contents
Accrual Mutual Funds
Accrual funds are a type of debt Mutual Funds which usually invest in short to medium maturity papers. These papers are of medium to high quality, while focusing on holding securities until the maturity. The fund ideally focuses to earn interest Income in terms of coupon offered by Bonds. Accrual funds adopt buy & hold strategy and emphases on delivering better returns compared to Bank FDs. These funds take a credit-risk and invest in slightly lower-rated securities, in order to generate higher yields. Moreover, accrual funds can make returns from the Capital gains too, but this tends to be a small portion of their total returns.
How Does Accrual Mutual Funds Work?
In the open-end Debt fund category, there are two types of long term bond funds —
1. Credit Opportunity Funds
Credit opportunities funds adopt the Accrual strategy in order to provide better returns. Typically, they invest across the credit spectrum, at times invest in bonds rated lower than “AA”. With investments in slightly lower rated securities (ensuring due-diligence is done) they are able to extract higher yields. Thereby, enabling a better return for the investors, in fact most times beating a bank FDs, in terms of returns. So, the lower the credit rate, the higher the return. They take the credit risk for the sake of generating high yields, due to which the risk of Default also increases.
Ideally, fund managers not only look for a current credit rating, but also at the fundamentals of a company. If the company has a huge opportunity to grow, then it can be the best choice for a fund manager.
2. Corporate Bond Funds
Corporate bond funds have a lower risk in comparison to credit opportunity funds. These funds invest only in the higher quality papers. Also, corporate bond funds don’t take any credit risks like credit opportunity funds. These funds can be an ideal investment at the end of the rate cut cycle or when a rate cut is expected.
Corporate bond funds are typically used for playing out a view in interest rates. Typically, the yield (ytm- Yield to Maturity) of corporate bond funds are lower than that of accrual funds. Investors who look for yield and would like to hold for long periods (i.e., 3 years or more) should go for an accrual fund. Investors who have a view on interest rates and can keenly monitor the fund’s performance can go for a corporate bond fund, taking the advantage of yield plus the returns made on Capital Gains (due to interest rate movements).
Talk to our investment specialist
Who should Invest?
These funds are suitable for investors who want to earn desire stable returns. But, an investor should have a view on interest rates. One should also keenly monitor the fund performances. It is advised to invest in accrual funds for least a 1-3-year horizon.
Accrual Debt Funds Taxation
Taxation for accrual funds is same like debt funds, which is computed in the following manner-
Short Term Capital Gains (STCG)
If the holding period of a debt investment is less than 36 months, then it is classified as a short-term investment and these are taxed as per individual's tax slab.
Long Term Capital Gains (LTCG)
If the holding period of debt investment is more than 36 months, then it is classified as a long-term investment and is taxed at 20% with an indexation benefit.
| Capital Gains | Investment Holding Gains | Taxation |
|---|---|---|
| Short Term Capital Gains | Less than 36 months | As per individual's tax slab |
| Long Term Capital Gains | More than 36 months | 20% with indexation benefits |
Top 5 Best Accrual Funds FY 25 - 26
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2024 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity IDFC Corporate Bond Fund Growth ₹18.7256
↑ 0.01 ₹14,053 2 3.6 8.1 6 7.7 7.33% 3Y 3Y 10M 28D ICICI Prudential Corporate Bond Fund Growth ₹29.0518
↑ 0.02 ₹29,290 2 3.8 8.1 7.2 8 7.63% 2Y 7M 28D 4Y 8M 8D BNP Paribas Corporate Bond Fund Growth ₹26.6268
↑ 0.01 ₹210 1.9 3.5 8 6 8.3 7.4% 3Y 5M 12D 4Y 8M 26D Franklin India Corporate Debt Fund Growth ₹95.8844
↑ 0.10 ₹754 1.8 3.7 7.8 6.1 7.6 7.62% 2Y 5M 16D 3Y 9M 14D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Mar 25
The Fund seeks to provide steady income and capital appreciation by investing primarily in corporate debt securities across maturities and ratings. There is no assurance or guarantee that the objectives of the scheme will be realised. IDFC Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 12 Jan 16. It is a fund with Moderate risk and has given a Below is the key information for IDFC Corporate Bond Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Ultra Short Term Plan) ICICI Prudential Ultra Short Term Plan is an open-ended income fund that intends to generate regular income through investments in a basket of debt and money market instruments of very short maturities with a view to providing reasonable returns, while maintaining an optimum balance of safety, liquidity and yield. However, there can be no assurance that the investment objective of the scheme will be realized. ICICI Prudential Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 11 Aug 09. It is a fund with Moderately Low risk and has given a Below is the key information for ICICI Prudential Corporate Bond Fund Returns up to 1 year are on The investment objective of the Scheme is to generate income and capital gains through investments in a portfolio of debt and money market instruments. However, there can be no assurance that the investment objectives of the Scheme will be realized. The Scheme launched hereunder does not guarantee/indicate any returns. BNP Paribas Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 8 Nov 08. It is a fund with Moderate risk and has given a Below is the key information for BNP Paribas Corporate Bond Fund Returns up to 1 year are on (Erstwhile Franklin India Income Builder Account - Plan A) The investment objective of the Scheme is primarily to provide investors Regular income under the Dividend Plan and Capital appreciation under the Growth Plan. Franklin India Corporate Debt Fund is a Debt - Corporate Bond fund was launched on 23 Jun 97. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Corporate Debt Fund Returns up to 1 year are on 1. IDFC Corporate Bond Fund
CAGR/Annualized return of 7.1% since its launch. Return for 2024 was 7.7% , 2023 was 6.8% and 2022 was 2.6% . IDFC Corporate Bond Fund
Growth Launch Date 12 Jan 16 NAV (24 Mar 25) ₹18.7256 ↑ 0.01 (0.06 %) Net Assets (Cr) ₹14,053 on 15 Mar 25 Category Debt - Corporate Bond AMC IDFC Asset Management Company Limited Rating Risk Moderate Expense Ratio 0.61 Sharpe Ratio 0.77 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.33% Effective Maturity 3 Years 10 Months 28 Days Modified Duration 3 Years Growth of 10,000 investment over the years.
Date Value 29 Feb 20 ₹10,000 28 Feb 21 ₹10,857 28 Feb 22 ₹11,447 28 Feb 23 ₹11,762 29 Feb 24 ₹12,606 28 Feb 25 ₹13,558 Returns for IDFC Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Mar 25 Duration Returns 1 Month 0.8% 3 Month 2% 6 Month 3.6% 1 Year 8.1% 3 Year 6% 5 Year 7.1% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.7% 2023 6.8% 2022 2.6% 2021 3.7% 2020 11.6% 2019 8.5% 2018 6.3% 2017 6.2% 2016 2015 Fund Manager information for IDFC Corporate Bond Fund
Name Since Tenure Suyash Choudhary 28 Jul 21 3.59 Yr. Gautam Kaul 1 Dec 21 3.25 Yr. Brijesh Shah 10 Jun 24 0.72 Yr. Data below for IDFC Corporate Bond Fund as on 15 Mar 25
Asset Allocation
Asset Class Value Cash 4.59% Debt 95.11% Other 0.3% Debt Sector Allocation
Sector Value Government 51.24% Corporate 43.86% Cash Equivalent 4.59% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -17% ₹2,416 Cr 235,500,000
↓ -500,000 7.1% Govt Stock 2034
Sovereign Bonds | -8% ₹1,192 Cr 116,500,000 National Housing Bank
Debentures | -7% ₹922 Cr 92,000,000 Bajaj Housing Finance Ltd. 7.78%
Debentures | -6% ₹850 Cr 85,000,000 Export-Import Bank of India 7.4%
Domestic Bonds | -4% ₹501 Cr 49,850,000
↓ -2,500,000 Indian Railway Finance Corporation Limited
Debentures | -3% ₹423 Cr 42,500,000 Larsen And Toubro Limited
Debentures | -3% ₹359 Cr 35,500,000
↑ 1,000,000 Grasim Industries Limited
Debentures | -3% ₹352 Cr 35,000,000
↑ 10,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹289 Cr 29,000,000
↑ 2,500,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹274 Cr 27,500,000 2. ICICI Prudential Corporate Bond Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 7 in Corporate Bond category. Return for 2024 was 8% , 2023 was 7.6% and 2022 was 4.5% . ICICI Prudential Corporate Bond Fund
Growth Launch Date 11 Aug 09 NAV (24 Mar 25) ₹29.0518 ↑ 0.02 (0.08 %) Net Assets (Cr) ₹29,290 on 15 Mar 25 Category Debt - Corporate Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.57 Sharpe Ratio 1.96 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.63% Effective Maturity 4 Years 8 Months 8 Days Modified Duration 2 Years 7 Months 28 Days Growth of 10,000 investment over the years.
Date Value 29 Feb 20 ₹10,000 28 Feb 21 ₹10,846 28 Feb 22 ₹11,350 28 Feb 23 ₹11,931 29 Feb 24 ₹12,877 28 Feb 25 ₹13,888 Returns for ICICI Prudential Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Mar 25 Duration Returns 1 Month 0.7% 3 Month 2% 6 Month 3.8% 1 Year 8.1% 3 Year 7.2% 5 Year 7.3% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 8% 2023 7.6% 2022 4.5% 2021 4.1% 2020 10.4% 2019 9.9% 2018 6.4% 2017 6.3% 2016 9.8% 2015 8.8% Fund Manager information for ICICI Prudential Corporate Bond Fund
Name Since Tenure Manish Banthia 22 Jan 24 1.11 Yr. Ritesh Lunawat 22 Jan 24 1.11 Yr. Data below for ICICI Prudential Corporate Bond Fund as on 15 Mar 25
Asset Allocation
Asset Class Value Cash 7.15% Debt 92.58% Other 0.27% Debt Sector Allocation
Sector Value Corporate 60.11% Government 32.47% Cash Equivalent 7.15% Credit Quality
Rating Value AA 0.57% AAA 99.43% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.1% Govt Stock 2034
Sovereign Bonds | -10% ₹2,968 Cr 290,127,880 7.93% Govt Stock 2033
Sovereign Bonds | -7% ₹2,059 Cr 200,204,630 National Bank For Agriculture And Rural Development
Debentures | -3% ₹963 Cr 96,500 National Bank For Agriculture And Rural Development
Debentures | -3% ₹882 Cr 88,050
↑ 30,000 Pipeline Infrastructure Private Limited
Debentures | -3% ₹818 Cr 80,500 Bharat Petroleum Corporation Limited
Debentures | -2% ₹591 Cr 59,000 INDIA UNIVERSAL TRUST AL1
Unlisted bonds | -2% ₹529 Cr 535 Small Industries Development Bank Of India
Debentures | -2% ₹525 Cr 5,250 LIC Housing Finance Ltd
Debentures | -2% ₹519 Cr 5,000 LIC Housing Finance Limited
Debentures | -2% ₹501 Cr 5,000 3. BNP Paribas Corporate Bond Fund
CAGR/Annualized return of 6.2% since its launch. Ranked 24 in Corporate Bond category. Return for 2024 was 8.3% , 2023 was 7% and 2022 was 1.6% . BNP Paribas Corporate Bond Fund
Growth Launch Date 8 Nov 08 NAV (24 Mar 25) ₹26.6268 ↑ 0.01 (0.05 %) Net Assets (Cr) ₹210 on 28 Feb 25 Category Debt - Corporate Bond AMC BNP Paribas Asset Mgmt India Pvt. Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 0.56 Sharpe Ratio 0.86 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load 0-12 Months (1%),12-24 Months (0.5%),24-36 Months (0.25%),36 Months and above(NIL) Yield to Maturity 7.4% Effective Maturity 4 Years 8 Months 26 Days Modified Duration 3 Years 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 29 Feb 20 ₹10,000 28 Feb 21 ₹10,676 28 Feb 22 ₹11,078 28 Feb 23 ₹11,276 29 Feb 24 ₹12,168 28 Feb 25 ₹13,115 Returns for BNP Paribas Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Mar 25 Duration Returns 1 Month 0.6% 3 Month 1.9% 6 Month 3.5% 1 Year 8% 3 Year 6% 5 Year 6.3% 10 Year 15 Year Since launch 6.2% Historical performance (Yearly) on absolute basis
Year Returns 2024 8.3% 2023 7% 2022 1.6% 2021 2.2% 2020 9.9% 2019 0.9% 2018 5.2% 2017 6.7% 2016 10.8% 2015 7.2% Fund Manager information for BNP Paribas Corporate Bond Fund
Name Since Tenure Gurvinder Wasan 21 Oct 24 0.36 Yr. Vikram Pamnani 10 Jul 24 0.64 Yr. Data below for BNP Paribas Corporate Bond Fund as on 28 Feb 25
Asset Allocation
Asset Class Value Cash 5.67% Debt 94.06% Other 0.27% Debt Sector Allocation
Sector Value Corporate 52.19% Government 39.48% Cash Equivalent 5.67% Securitized 2.39% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.1% Govt Stock 2034
Sovereign Bonds | -7% ₹15 Cr 1,500,000 Rec Limited
Debentures | -6% ₹12 Cr 1,200 Indian Railway Finance Corporation Limited
Debentures | -5% ₹11 Cr 110 Export Import Bank Of India
Debentures | -5% ₹11 Cr 100 7.32% Govt Stock 2030
Sovereign Bonds | -5% ₹10 Cr 1,000,000
↓ -500,000 Power Finance Corporation Ltd.
Debentures | -5% ₹10 Cr 1,000 Hindustan Petroleum Corporation Limited
Debentures | -5% ₹10 Cr 100 Sundaram Bnp Paribas Home Finance Limited
Debentures | -5% ₹10 Cr 1,000 Tata Capital Limited
Debentures | -5% ₹10 Cr 1,000 GAil (India) Limited
Debentures | -5% ₹10 Cr 100 4. Franklin India Corporate Debt Fund
CAGR/Annualized return of 8.5% since its launch. Ranked 22 in Corporate Bond category. Return for 2024 was 7.6% , 2023 was 6.5% and 2022 was 3.2% . Franklin India Corporate Debt Fund
Growth Launch Date 23 Jun 97 NAV (24 Mar 25) ₹95.8844 ↑ 0.10 (0.10 %) Net Assets (Cr) ₹754 on 28 Feb 25 Category Debt - Corporate Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆ Risk Moderate Expense Ratio 0.77 Sharpe Ratio 0.86 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load 0-1 Years (0.5%),1 Years and above(NIL) Yield to Maturity 7.62% Effective Maturity 3 Years 9 Months 14 Days Modified Duration 2 Years 5 Months 16 Days Growth of 10,000 investment over the years.
Date Value 29 Feb 20 ₹10,000 28 Feb 21 ₹10,556 28 Feb 22 ₹11,057 28 Feb 23 ₹11,428 29 Feb 24 ₹12,226 28 Feb 25 ₹13,132 Returns for Franklin India Corporate Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Mar 25 Duration Returns 1 Month 0.7% 3 Month 1.8% 6 Month 3.7% 1 Year 7.8% 3 Year 6.1% 5 Year 6.4% 10 Year 15 Year Since launch 8.5% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.6% 2023 6.5% 2022 3.2% 2021 3.8% 2020 9% 2019 9.2% 2018 7.5% 2017 7.7% 2016 9% 2015 8.4% Fund Manager information for Franklin India Corporate Debt Fund
Name Since Tenure Rahul Goswami 6 Oct 23 1.4 Yr. Anuj Tagra 7 Mar 24 0.98 Yr. Chandni Gupta 7 Mar 24 0.98 Yr. Data below for Franklin India Corporate Debt Fund as on 28 Feb 25
Asset Allocation
Asset Class Value Cash 5.68% Debt 94.04% Other 0.28% Debt Sector Allocation
Sector Value Corporate 76.96% Government 17.08% Cash Equivalent 5.68% Credit Quality
Rating Value AA 20.34% AAA 79.66% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.53% Govt Stock 2034
Sovereign Bonds | -8% ₹57 Cr 5,500,000 ICICI Home Finance Company Limited
Debentures | -7% ₹54 Cr 5,000 Sikka Ports & Terminals Limited
Debentures | -7% ₹52 Cr 500 Mankind Pharma Ltd
Debentures | -7% ₹52 Cr 5,000 Pipeline Infrastructure Private Limited
Debentures | -7% ₹51 Cr 5,000 Summit Digitel Infrastructure Ltd
Debentures | -7% ₹51 Cr 5,000 Rural Electrification Corporation Limited
Debentures | -6% ₹49 Cr 9,000 Bajaj Finance Ltd. 8.1167%
Debentures | -4% ₹27 Cr 2,500 National Bank For Agriculture And Rural Development
Debentures | -4% ₹27 Cr 2,500 HDB Financial Services Ltd. 8.3324%
Debentures | -4% ₹27 Cr 2,500
How to Invest in Accrual Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
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.
AMFI Registration No. 112358 | CIN: U74999MH2016PTC282153
Shepard Technologies Pvt. Ltd. (with ARN code 112358) makes no warranties or representations, express or implied, on products offered through the platform. It accepts no liability for any damages or losses, however caused, in connection with the use of, or on the reliance of its product or related services. Terms and conditions of the website are applicable.
©2025 Shepard Technologies Private Limited. All Rights Reserved