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Bandhan Banking & PSU Debt Fund - Direct Plan

An open ended debt scheme predominantly investing in debt instruments of banks, Public Sector Undertakings, Public Financial Institutions and Municipal Bonds. A scheme with relatively high interest rate risk and relatively low credit risk.

DebtInception Date:07/03/2013
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What is a Banking and PSU Debt Fund?

Banking & PSU debt funds (Public Sector Undertaking) are a type of a debt fund investment scheme that invests primarily in banking institutions and other public sector companies. They are mandated to invest at least 80% of their corpus in debt and money market instruments issued by PSUs, Banks or PFIs.

Bandhan Banking and PSU debt fund is a relatively liquid investment option as it is currently invested in AAA-rated debt instruments. The liquidity of banking and PSU funds may be beneficial for investors looking to build an emergency fund.

Banking & PSU debt funds are taxed similar to any other debt fund. The capital gains made on a banking and PSU fund are taxed depending on how long the investor holds the fund’s units. Units held for less than 3 years are categorised as short-term capital gains and are taxed as per the investors income tax slab. Units that are redeemed after 3 years are taxed at 20% and are classified as long-term capital gains.

Although Banking & PSU debt funds are classified as an investment with low to moderate risk, they are not risk free. They may be subject to inflation risk and interest rate risk.


 

  • Min Investment 1,000
  • Min SIP Amount 100
  • Exit Load
    Nil (w.e.f. June 12th 2017)
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Annualised Returns(as on 31st May, 2024)6.35%1yr5.15%3yr6.69%5yr
NAV 22.6852 as on 21/06/20241 Day Change: 0.01(0.04%)

Scheme is suitable as 'Core' debt allocation and is recommended for a minimum investment horizon of 3 years

Tier 1 Benchmark : Nifty Banking & PSU Debt Index A-IIAlternate Benchmark : CRISIL 10 Year Gilt Index

Performance as on 31st May 2024

Scheme NamesCAGR Returns (%)Current value of Investment of 10,000
1 year3 year5 year10 year07/03/2013 Since inception1 year3 year5 year10 year07/03/2013 Since inception
Bandhan Banking & PSU Debt Fund - Regular Plan - Growth6.355.156.697.317.5210,63611,62713,82920,26222,587
6.674.936.567.327.3810,66911,55513,74420,27422,127
6.594.085.756.986.3210,66111,27713,22919,65819,919
^ Tier 1 Benchmark   |   ^^ Alternate Benchmark   |   ^^^ Tier 2 Benchmark

This fund is managed by Mr. Suyash Choudhary (w.e.f 28/07/2021) & Mr. Gautam Kaul (w.e.f 01/12/2021)

View fund performance of other funds managed by Mr. Suyash Choudhary, Mr. Gautam Kaul

Past performance may or may not be sustained in future.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.

Taxation:

For taxation, please refer the link :  https://bit.ly/3spfzbo

Bandhan Banking and PSU Debt Fund

(Scheme Risk-o-meter)

Investors understand that their principal will be at Moderate Risk.

Nifty Banking & PSU Debt Index A-II

(Tier 1 Benchmark Risk-o-meter)

This product is suitable for investors who are seeking* :

  • To generate optimal returns over short to medium term.
  • Investments predominantly in debt & money market instruments issued by PSU, Banks & PFI.

Who Should Invest in Banking & PSU Debt Funds?

As banking & PSU debt funds invest in debt instruments which may be backed by the Government of India, they are categorised as a low to moderately risky investment option. They have the potential to generate returns in the short to medium term. This makes them potentially suitable for risk-averse investors with a short to medium term investment horizon.

Moreover, banking & PSU debt funds are relatively a highly liquid investment option. This fund may be suitable for investors seeking liquid funds in case of an emergency.

FAQs on Banking & PSU Debt Funds

What is a Banking and PSU debt fund?

A banking and PSU debt fund is a mutual fund scheme that is mandated to invest 80% of its corpus in debt and money market securities issued by banks, banking institutions and public sector undertakings .

Are banking and PSU debt funds safe?

Banking and PSU mutual funds are classified as a low to moderate-risk investment option as they invest in securities backed by the government. Moreover, they are less likely to be vulnerable to credit risk and may be suitable for risk-averse investors.

How are banking mutual funds taxed?

The taxation of banking & PSU debt funds depends on when the units are redeemed. Units redeemed under 3 years are taxed according to the investors income tax slab. Investments redeemed after 3 years are categorised as long term capital gains and are taxed at 20%.

What are the benefits of banking & PSU mutual funds?

Banking & PSU debt funds are classified as a low to moderate risk debt fund investment. They may be beneficial to risk-averse investors seeking returns. Moreover, they are a liquid investment option, and may be beneficial in case of emergencies.

What are the disadvantages of banking and PSU funds?

These funds are suitable for investors seeking potential returns. These funds are a short to mid-term investment option, and may not be suitable to meet long-term investment goals. As a debt MF, they may be subject to inflation risk and interest rate risk.

What do banking and PSU debt funds invest in?

Banking & PSU debt funds invest in debt and money market instruments. They are mandated to invest 80% of their corpus in debt instruments issued by PSU, banks and PFIs.

 

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.