Top Banking & PSU Mutual Funds (2026)
Ranked by 3 year return, Direct plans, as on the latest NAV · AUM as on 30-09-2026
There are 20 Banking & PSU mutual funds. Their average 3 year return is 6.9% a year, and +4.0% over the last year. The highest 3 year returns: UTI Banking & PSU Debt Fund 7.5%, Franklin India Banking & PSU Debt Fund 7.3%, LIC MF Banking & PSU Debt Fund 7.1%.
- Total AUM
- ₹72,672 Cr
- As on 30-09-2026
- Funds
- 20
- From 20 fund houses
- Expense ratio
- 0.23% to 0.42%
- Direct plans, lowest to highest
- Average 3Y return
- 6.9%
- A year, Direct plans
All Banking & PSU Funds
Ranked by 3 year return, highest first
Ranked by 3 year return, highest first
| Exit load | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| UTI Banking & PSU Debt Fund | 1 | 1,448 | +5.74% | +7.47% | +7.79% | +6.46% | Low to Moderate | 0.24% | None | 0.75% |
| Franklin India Banking & PSU Debt Fund | 2 | 565 | +5.39% | +7.31% | +6.42% | +7.17% | -- | 0.23% | Varies | 0.98% |
| LIC MF Banking & PSU Debt Fund | 3 | 1,598 | +4.25% | +7.11% | +6.22% | +6.91% | -- | 0.28% | -- | 1.06% |
| SBI Banking & PSU Debt Fund | 4 | 3,512 | +4.41% | +7.07% | +6.15% | +7.06% | Low to Moderate | 0.41% | None | 1.01% |
| Kotak Banking and PSU Debt Fund | 5 | 4,761 | +4.03% | +7.01% | +6.27% | +7.22% | Moderate | 0.40% | None | 1.14% |
| Bandhan Banking and PSU Debt Fund | 6 | 11,893 | +5.08% | +7.00% | +6.24% | +7.14% | Low to Moderate | 0.39% | None | 0.92% |
| Edelweiss Banking and PSU Debt Fund | 7 | 3,137 | +4.02% | +7.00% | +6.03% | -- | Low to Moderate | 0.40% | None | 1.23% |
| Nippon India Banking and PSU Debt Fund | 8 | 5,057 | +3.76% | +6.88% | +6.13% | +7.10% | Moderate | 0.39% | None | 1.20% |
| Invesco India Banking and PSU Debt Fund | 9 | 80 | +3.72% | +6.88% | +5.58% | +6.51% | Moderate | 0.26% | None | 1.20% |
| ICICI Prudential Banking and PSU Debt Fund | 10 | 8,041 | +4.12% | +6.87% | +6.46% | +7.07% | -- | 0.40% | -- | 1.06% |
| ITI Banking & PSU Debt Fund | 11 | 34 | +4.10% | +6.79% | +6.27% | -- | Low to Moderate | 0.23% | None | 0.83% |
| Aditya Birla Sun Life Banking & PSU Debt Fund | 12 | 8,439 | +3.49% | +6.75% | +6.12% | +6.97% | Moderate | 0.41% | None | 1.07% |
| HDFC Banking and PSU Debt Fund | 13 | 5,055 | +3.44% | +6.75% | +6.09% | +6.99% | Moderate | 0.35% | None | 1.13% |
| Axis Banking and PSU Debt Fund | 14 | 11,962 | +3.91% | +6.71% | +6.06% | +7.06% | Moderate | 0.36% | None | 0.94% |
| HSBC Banking and PSU Debt Fund | 15 | 3,722 | +3.81% | +6.70% | -- | -- | Moderate | 0.28% | None | 1.00% |
| Mirae Asset Banking and PSU Debt Fund | 16 | 39 | +3.46% | +6.67% | +5.83% | -- | -- | 0.37% | -- | 1.13% |
| DSP Banking and PSU Debt Fund | 17 | 2,590 | +2.97% | +6.60% | +5.87% | +6.73% | Moderate | 0.34% | None | 1.38% |
| Canara Robeco Banking and PSU Debt Fund | 18 | 164 | +3.23% | +6.32% | -- | -- | Moderate | 0.42% | None | 0.97% |
| Bajaj Finserv Banking and PSU Debt Fund | -- | 315 | +3.85% | -- | -- | -- | Moderate | 0.35% | None | -- |
| Sundaram Banking and PSU Debt Fund | -- | 258 | -- | -- | -- | -- | Low to Moderate | 0.27% | None | -- |
Returns of each fund's Direct plan (its only plan where it has one), as on the latest NAV. 3, 5 and 10 year figures are a rate a year. Std dev: how much the daily returns swung over 3 years, as a yearly figure; lower is steadier. Riskometer and exit load from the fund's scheme summary document; "Varies" means the load changes with how long you hold, and the fund page has the full wording. Expense ratio: Direct plan, from AMFI. AUM at the end of the fund's last reported month. A fund younger than 3 years has no rank and is listed after the ranked ones.
Compare Banking & PSU Funds
The largest funds of the category, side by side
- Axis Banking and PSU Debt vs Bandhan Banking and PSU Debt
- Axis Banking and PSU Debt vs Aditya Birla Sun Life Banking & PSU Debt
- Axis Banking and PSU Debt vs ICICI Prudential Banking and PSU Debt
- Bandhan Banking and PSU Debt vs Aditya Birla Sun Life Banking & PSU Debt
- Bandhan Banking and PSU Debt vs ICICI Prudential Banking and PSU Debt
- Aditya Birla Sun Life Banking & PSU Debt vs ICICI Prudential Banking and PSU Debt
How Banking & PSU Funds Are Taxed
As debt funds: 65% or more of each fund is in bonds and money market papers
| When you sell | Tax on the gain |
|---|---|
| Units bought on or after 01-04-2023 | Your slab rate, however long you hold them |
| Units bought before 01-04-2023, within 2 years | Your slab rate |
| Units bought before 01-04-2023, after 2 years | 12.5% of the gain |
- IDCW (dividend) payouts are added to your income and taxed at your slab rate.
- A stamp duty of 0.005% is deducted when you invest.
Rules in force from 23-07-2024 (Finance Act 2024). Tax depends on your own income; this is general information, not tax advice.
What Is a Banking & PSU Fund?
At least 80% in debt of banks, public sector undertakings and public financial institutions. This is the rule SEBI sets for every fund in the category, so their portfolios can be compared.
Other debt categories: Overnight · Liquid · Ultra Short · Low Duration · Money Market · Short Duration · Medium Duration · Medium to Long Duration · Long Duration · Dynamic Bond · Corporate Bond · Credit Risk · Gilt · Floater
Banking & PSU Funds: Frequently Asked Questions
Which are the top Banking & PSU mutual funds?
By 3 year return, the top Banking & PSU funds are 1. UTI Banking & PSU Debt Fund (7.5% a year), 2. Franklin India Banking & PSU Debt Fund (7.3% a year), 3. LIC MF Banking & PSU Debt Fund (7.1% a year), 4. SBI Banking & PSU Debt Fund (7.1% a year), 5. Kotak Banking and PSU Debt Fund (7.0% a year). Past returns do not promise future returns, so also look at costs, risk and how long each fund has done well.
How many Banking & PSU funds are there?
20 Banking & PSU funds are open for investment, from 20 fund houses.
What is a Banking & PSU fund?
At least 80% in debt of banks, public sector undertakings and public financial institutions.
What is the average return of Banking & PSU funds?
1 year: 4.0%, 3 years: 6.9% a year, 5 years: 6.2% a year. The simple average of every Banking & PSU fund's Direct plan.
Which Banking & PSU fund has the lowest expense ratio?
Franklin India Banking & PSU Debt Fund, at 0.23% a year (Direct plan), as reported to AMFI.
Which is the largest Banking & PSU fund?
Axis Banking and PSU Debt Fund, with ₹11,962 Cr of investors' money on 30-09-2026.
How are Banking & PSU funds taxed?
As debt funds: for units bought on or after 01-04-2023, the gain is added to your income and taxed at your slab rate, however long you hold them.
This page is information, not investment advice. Mutual fund investments are subject to market risks; read all scheme related documents carefully. Past returns do not promise future returns. Figures come from AMFI, NSE, BSE and each fund house's own documents.