What are Banking and PSU Funds?
Banking and PSU funds are short-term debt funds that offer a decent amount of returns and also minimise risk by investing in top-rated debt instruments containing securities that are issued by banks and public sector undertakings. Such listed companies are large-cap companies and have AAA ratings from the top credit rating agencies like CRISIL, etc. As per SEBI guidelines for mutual funds, banking, and PSU Funds have to invest at least 80% of their total proceeds in debt instruments issued by such institutions. As a result, these funds have high-ranking credit quality compared to other debt funds offered in the mutual fund market. Banking and PSU funds maintain a favourable balance between liquidity, safety, and yield. Banking and PSU funds hold the phrase “safe investment for conservative investors”.
Table of Content
- Features of Banking and PSU Funds
- Purpose of Banking and PSU Funds
- Who should Invest in Banking and PSU Funds?
- Factors to Consider Before Investing in Banking and PSU Funds
- Advantages of Banking and PSU Funds
- Disadvantages of Banking and PSU Funds