Banking and PSU

About

A Banking and PSU Debt Mutual Fund is a category of debt fund that primarily invests in debt instruments issued by Banks, Public Sector Undertakings (PSUs), and Public Financial Institutions (PFIs).

As per classification by the Securities and Exchange Board of India (SEBI), Banking & PSU Funds must invest at least 80% of total assets in debt instruments of Banks, PSUs, and PFIs.

These funds are considered relatively safer within corporate debt categories due to strong backing of issuers.

Fund Type

Debt

Key Features

Minimum 80% Investment in Banking & PSU Debt

Sector-Focused Strategy

Stable Return Profile Within Debt Category

High Credit Quality Portfolio

Taxation

STCG

Holding Period ≤ 36 months, As per Income Tax slap

LTCG

Holding Period > 36 months, As per Income Tax slap

Dividends Tax

Dividends are added to your income, Taxed as per your slab rate. TDS applicable as per rules

Exemption Limit

Basic exemption limit adjustment allowed if total income is below threshold

Indexation

No Indexation

Allocation

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Bonds issued by Banks, PSU and Public Financial Institutions

80%

Government Securities and Money Market Instruments

20%

Locked in Period

Nill

Exit Load

An exit load of 0 – 1% is generally applicable if units are redeemed within 30 days to 1 Years. However, the exact structure may vary based on the specific scheme

Risk Associated

Find the funds

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing. Past performance is not indicative of future performance.