3 Best Banking PSU Debt Funds for 2024

Banking & PSU Debt Funds, a sub-category of debt mutual funds, predominantly invest in top-rated corporate debt instruments issued by Banks, Public Sector Undertaking (PSUs), Public Financial Institutions (PFIs), Municipal bonds, and other such securities.

The regulatory guidelines make it mandatory to allocate a minimum of 80% of their assets into such debt instruments.

The Debt instruments from these entities are recognised for their robust credibility and liquidity compared to those from private issuers, making them a relatively safer investment option.

As regards the maturity of debt papers, Banking & PSU Debt Funds have the flexibility to diversify their exposure across the yield curve.

Banking & PSU Debt Funds, as a sub-category of debt funds, are moderately sensitive to interest rates.