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Top 5 Best Banking and PSU Debt Funds 2024

Updated on December 16, 2024 , 20432 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 2024 - 2025.

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Top Performing Banking and PSU Debt Funds

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2023 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity
HDFC Banking and PSU Debt Fund Growth	₹21.9869 ↑ 0.01	₹5,809	1.8	4.1	7.9	5.9	6.8	7.37%	3Y 7M 24D	5Y 1M 17D
UTI Banking & PSU Debt Fund Growth	₹20.9368 ↑ 0.00	₹820	1.7	3.9	7.7	8.2	6.7	7.28%	2Y 5M 23D	2Y 11M 12D
DSP BlackRock Banking and PSU Debt Fund Growth	₹23.087 ↑ 0.01	₹3,011	1.9	4.5	8.9	6.2	6.7	7.21%	5Y 9M	11Y 3M 18D
Kotak Banking and PSU Debt fund Growth	₹62.5018 ↑ 0.02	₹5,697	1.8	4.2	8.1	6.1	6.8	7.36%	3Y 5M 5D	5Y 3M 11D
Aditya Birla Sun Life Banking & PSU Debt Fund Growth	₹350.504 ↑ 0.09	₹9,507	1.8	4.1	8	6.1	6.9	7.4%	3Y 7M 2D	4Y 9M 25D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 18 Dec 24

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 7.6% since its launch. Ranked 6 in Banking & PSU Debt category. Return for 2023 was 6.8% , 2022 was 3.3% and 2021 was 3.7% .

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 (18 Dec 24)	₹21.9869 ↑ 0.01 (0.04 %)
Net Assets (Cr)	₹5,809 on 31 Oct 24
Category	Debt - Banking & PSU Debt
AMC	HDFC Asset Management Company Limited
Rating	☆☆☆☆☆
Risk	Moderately Low
Expense Ratio	0.79
Sharpe Ratio	1.7
Information Ratio	0
Alpha Ratio	0
Min Investment	5,000
Min SIP Investment	300
Exit Load	NIL
Yield to Maturity	7.37%
Effective Maturity	5 Years 1 Month 17 Days
Modified Duration	3 Years 7 Months 24 Days

Growth of 10,000 investment over the years.

Date	Value
30 Nov 19	₹10,000
30 Nov 20	₹11,023
30 Nov 21	₹11,461
30 Nov 22	₹11,805
30 Nov 23	₹12,578
30 Nov 24	₹13,590

HDFC Banking and PSU Debt Fund SIP 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 18 Dec 24

Duration	Returns
1 Month	0.6%
3 Month	1.8%
6 Month	4.1%
1 Year	7.9%
3 Year	5.9%
5 Year	6.5%
10 Year
15 Year
Since launch	7.6%

Historical performance (Yearly) on absolute basis

Year	Returns
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%
2014

Fund Manager information for HDFC Banking and PSU Debt Fund

Name	Since	Tenure
Anil Bamboli	26 Mar 14	10.69 Yr.
Dhruv Muchhal	22 Jun 23	1.45 Yr.

Data below for HDFC Banking and PSU Debt Fund as on 31 Oct 24

Asset Allocation

Asset Class	Value
Cash	4.96%
Debt	94.77%
Other	0.27%

Debt Sector Allocation

Sector	Value
Corporate	51.11%
Government	43.66%
Cash Equivalent	4.96%

Credit Quality

Rating	Value
AA	2.04%
AAA	97.96%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
7.18% Govt Stock 2033 Sovereign Bonds \| -	5%	₹300 Cr	29,500,000
Indian Railway Finance Corporation Limited Debentures \| -	5%	₹277 Cr	27,500
Small Industries Development Bank Of India Debentures \| -	4%	₹225 Cr	22,500
7.26% Govt Stock 2033 Sovereign Bonds \| -	4%	₹220 Cr	21,500,000
Indian Railway Finance Corporation Limited Debentures \| -	3%	₹202 Cr	20,000
State Bank Of India Debentures \| -	3%	₹176 Cr	175 ↑ 75
Bajaj Housing Finance Limited Debentures \| -	3%	₹151 Cr	15,000
Rural Electrification Corporation Limited Debentures \| -	3%	₹151 Cr	1,500
Small Industries Development Bank Of India Debentures \| -	2%	₹140 Cr	14,000
Housing And Urban Development Corporation Limited Debentures \| -	2%	₹130 Cr	1,250

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% since its launch. Ranked 3 in Banking & PSU Debt category. Return for 2023 was 6.7% , 2022 was 10.3% and 2021 was 2.8% .

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

UTI Banking & PSU Debt Fund Growth
Launch Date	3 Feb 14
NAV (18 Dec 24)	₹20.9368 ↑ 0.00 (0.02 %)
Net Assets (Cr)	₹820 on 31 Oct 24
Category	Debt - Banking & PSU Debt
AMC	UTI Asset Management Company Ltd
Rating	☆☆☆☆☆
Risk	Moderate
Expense Ratio	0.55
Sharpe Ratio	1.5
Information Ratio	0
Alpha Ratio	0
Min Investment	5,000
Min SIP Investment	500
Exit Load	NIL
Yield to Maturity	7.28%
Effective Maturity	2 Years 11 Months 12 Days
Modified Duration	2 Years 5 Months 23 Days

Growth of 10,000 investment over the years.

Date	Value
30 Nov 19	₹10,000
30 Nov 20	₹10,890
30 Nov 21	₹11,194
30 Nov 22	₹12,332
30 Nov 23	₹13,094
30 Nov 24	₹14,133

UTI Banking & PSU Debt Fund SIP 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 18 Dec 24

Duration	Returns
1 Month	0.5%
3 Month	1.7%
6 Month	3.9%
1 Year	7.7%
3 Year	8.2%
5 Year	7.3%
10 Year
15 Year
Since launch	7%

Historical performance (Yearly) on absolute basis

Year	Returns
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%
2014

Fund Manager information for UTI Banking & PSU Debt Fund

Name	Since	Tenure
Anurag Mittal	1 Dec 21	3 Yr.

Data below for UTI Banking & PSU Debt Fund as on 31 Oct 24

Asset Allocation

Asset Class	Value
Cash	4.9%
Debt	94.79%
Other	0.31%

Debt Sector Allocation

Sector	Value
Government	48.33%
Corporate	46.46%
Cash Equivalent	4.9%

Credit Quality

Rating	Value
AAA	100%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
7.38% Govt Stock 2027 Sovereign Bonds \| -	11%	₹86 Cr	850,000,000
Axis Bank Limited Debentures \| -	7%	₹55 Cr	550
Export-Import Bank Of India Debentures \| -	6%	₹50 Cr	5,000
Small Industries Development Bank Of India Debentures \| -	6%	₹50 Cr	5,000
ICICI Bank Limited Debentures \| -	6%	₹48 Cr	500 ↓ -50
7.37% Govt Stock 2028 Sovereign Bonds \| -	6%	₹46 Cr	450,000,000
Power Finance Corporation Limited Debentures \| -	5%	₹40 Cr	400
Rural Electrification Corporation Limited Debentures \| -	4%	₹35 Cr	3,500
HDFC Bank Limited Debentures \| -	4%	₹35 Cr	350
Indian Railway Finance Corporation Limited Debentures \| -	4%	₹30 Cr	300

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 7.7% since its launch. Ranked 20 in Banking & PSU Debt category. Return for 2023 was 6.7% , 2022 was 3.2% and 2021 was 3.1% .

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 (18 Dec 24)	₹23.087 ↑ 0.01 (0.03 %)
Net Assets (Cr)	₹3,011 on 31 Oct 24
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	7.21%
Effective Maturity	11 Years 3 Months 18 Days
Modified Duration	5 Years 9 Months

Growth of 10,000 investment over the years.

Date	Value
30 Nov 19	₹10,000
30 Nov 20	₹11,047
30 Nov 21	₹11,410
30 Nov 22	₹11,742
30 Nov 23	₹12,481
30 Nov 24	₹13,587

DSP BlackRock Banking and PSU Debt Fund SIP 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 18 Dec 24

Duration	Returns
1 Month	0.7%
3 Month	1.9%
6 Month	4.5%
1 Year	8.9%
3 Year	6.2%
5 Year	6.5%
10 Year
15 Year
Since launch	7.7%

Historical performance (Yearly) on absolute basis

Year	Returns
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%
2014	10.4%

Fund Manager information for DSP BlackRock Banking and PSU Debt Fund

Name	Since	Tenure
Sandeep Yadav	1 Aug 24	0.33 Yr.
Shantanu Godambe	1 Jun 23	1.5 Yr.

Data below for DSP BlackRock Banking and PSU Debt Fund as on 31 Oct 24

Asset Allocation

Asset Class	Value
Cash	16.9%
Debt	82.89%
Other	0.21%

Debt Sector Allocation

Sector	Value
Corporate	45.89%
Government	44.22%
Cash Equivalent	9.68%

Credit Quality

Rating	Value
AAA	100%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
7.3% Govt Stock 2053 Sovereign Bonds \| -	13%	₹399 Cr	37,500,000
7.34% Govt Stock 2064 Sovereign Bonds \| -	4%	₹130 Cr	12,500,000 ↑ 500,000
Small Industries Development Bank Of India Debentures \| -	4%	₹127 Cr	12,500
GAil (India) Limited Debentures \| -	3%	₹107 Cr	1,000
Rural Electrification Corporation Limited Debentures \| -	3%	₹106 Cr	10,000
National Bank for Agriculture and Rural Development Domestic Bonds \| -	3%	₹105 Cr	10,000
Indian Railway Finance Corporation Limited Debentures \| -	3%	₹105 Cr	1,000
National Bank For Financing Infrastructure And Development Debentures \| -	3%	₹104 Cr	10,000
State Bank Of India Debentures \| -	3%	₹103 Cr	100
National Bank For Agriculture And Rural Development Debentures \| -	3%	₹80 Cr	7,500

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 2023 was 6.8% , 2022 was 3.6% and 2021 was 3.9% .

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 (18 Dec 24)	₹62.5018 ↑ 0.02 (0.03 %)
Net Assets (Cr)	₹5,697 on 31 Oct 24
Category	Debt - Banking & PSU Debt
AMC	Kotak Mahindra Asset Management Co Ltd
Rating	☆☆☆☆
Risk	Moderately Low
Expense Ratio	0.81
Sharpe Ratio	1.73
Information Ratio	0
Alpha Ratio	0
Min Investment	5,000
Min SIP Investment	1,000
Exit Load	NIL
Yield to Maturity	7.36%
Effective Maturity	5 Years 3 Months 11 Days
Modified Duration	3 Years 5 Months 5 Days

Growth of 10,000 investment over the years.

Date	Value
30 Nov 19	₹10,000
30 Nov 20	₹11,027
30 Nov 21	₹11,470
30 Nov 22	₹11,878
30 Nov 23	₹12,638
30 Nov 24	₹13,676

Kotak Banking and PSU Debt fund SIP 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 18 Dec 24

Duration	Returns
1 Month	0.6%
3 Month	1.8%
6 Month	4.2%
1 Year	8.1%
3 Year	6.1%
5 Year	6.6%
10 Year
15 Year
Since launch

Historical performance (Yearly) on absolute basis

Year	Returns
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%
2014	9.5%

Fund Manager information for Kotak Banking and PSU Debt fund

Name	Since	Tenure
Deepak Agrawal	1 Aug 08	16.35 Yr.
Abhishek Bisen	1 Nov 22	2.08 Yr.

Data below for Kotak Banking and PSU Debt fund as on 31 Oct 24

Asset Allocation

Asset Class	Value
Cash	3.41%
Debt	96.31%
Other	0.28%

Debt Sector Allocation

Sector	Value
Corporate	54.78%
Government	41.53%
Cash Equivalent	3.41%

Credit Quality

Rating	Value
AA	2.74%
AAA	97.26%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
7.18% Govt Stock 2033 Sovereign Bonds \| -	9%	₹514 Cr	50,443,730
National Bank For Agriculture And Rural Development Debentures \| -	6%	₹349 Cr	34,700
Power Finance Corp Ltd. 0.076% Debentures \| -	6%	₹333 Cr	33,000
National Housing Bank Debentures \| -	5%	₹276 Cr	27,500
7.93% Govt Stock 2033 Sovereign Bonds \| -	4%	₹242 Cr	23,432,280
7.1% Govt Stock 2034 Sovereign Bonds \| -	4%	₹229 Cr	22,536,520 ↓ -500,000
HDFC Bank Limited Debentures \| -	4%	₹212 Cr	21,000
Power Grid Corporation Of India Limited Debentures \| -	3%	₹184 Cr	20,002
Rural Electrification Corporation Limited Debentures \| -	3%	₹157 Cr	15,500
Rural Electrification Corporation Limited Debentures \| -	3%	₹154 Cr	15,000

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 7.8% since its launch. Ranked 9 in Banking & PSU Debt category. Return for 2023 was 6.9% , 2022 was 3.7% and 2021 was 3.6% .

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 (18 Dec 24)	₹350.504 ↑ 0.09 (0.02 %)
Net Assets (Cr)	₹9,507 on 31 Oct 24
Category	Debt - Banking & PSU Debt
AMC	Birla Sun Life Asset Management Co Ltd
Rating	☆☆☆☆
Risk	Moderate
Expense Ratio	0.7
Sharpe Ratio	1.9
Information Ratio	0
Alpha Ratio	0
Min Investment	1,000
Min SIP Investment	1,000
Exit Load	NIL
Yield to Maturity	7.4%
Effective Maturity	4 Years 9 Months 25 Days
Modified Duration	3 Years 7 Months 2 Days

Growth of 10,000 investment over the years.

Date	Value
30 Nov 19	₹10,000
30 Nov 20	₹11,067
30 Nov 21	₹11,480
30 Nov 22	₹11,868
30 Nov 23	₹12,645
30 Nov 24	₹13,666

Aditya Birla Sun Life Banking & PSU Debt Fund SIP 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 18 Dec 24

Duration	Returns
1 Month	0.6%
3 Month	1.8%
6 Month	4.1%
1 Year	8%
3 Year	6.1%
5 Year	6.6%
10 Year
15 Year
Since launch	7.8%

Historical performance (Yearly) on absolute basis

Year	Returns
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%
2014	12.5%

Fund Manager information for Aditya Birla Sun Life Banking & PSU Debt Fund

Name	Since	Tenure
Kaustubh Gupta	29 Sep 09	15.1 Yr.
Harshil Suvarnkar	22 Mar 21	3.61 Yr.

Data below for Aditya Birla Sun Life Banking & PSU Debt Fund as on 31 Oct 24

Asset Allocation

Asset Class	Value
Cash	10.09%
Debt	89.65%
Other	0.26%

Debt Sector Allocation

Sector	Value
Corporate	64.49%
Government	29.12%
Cash Equivalent	6.13%

Credit Quality

Rating	Value
AA	0.88%
AAA	99.12%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
Power Finance Corporation Ltd. Debentures \| -	3%	₹301 Cr	30,000
7.18% Govt Stock 2037 Sovereign Bonds \| -	3%	₹265 Cr	25,946,000 ↓ -3,000,000
Power Finance Corp Ltd. 7.6% Debentures \| -	3%	₹252 Cr	25,000
Small Industries Development Bank Of India Debentures \| -	3%	₹245 Cr	24,500
7.1% Govt Stock 2034 Sovereign Bonds \| -	2%	₹202 Cr	19,927,000 ↓ -500,000
National Bank For Agriculture And Rural Development Debentures \| -	2%	₹196 Cr	19,500
REC Ltd. 7.71% Debentures \| -	2%	₹196 Cr	19,500
Axis Bank Ltd. Debentures \| -	2%	₹193 Cr	4,000 ↑ 4,000
National Bank For Agriculture And Rural Development Debentures \| -	2%	₹185 Cr	18,500
7.18% Govt Stock 2033 Sovereign Bonds \| -	2%	₹184 Cr	18,058,800 ↓ -10,360,000

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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.