Best Credit Risk Debt Mutual Funds

These funds show similar action like Debt – Dynamic by investing in debt ranging from short to long term with an objective to generate high-interest income, but the investment goes to low-grade corporate bonds. If you are willing to take the risk for higher gains, then this category is something you should look at. These funds are suitable for Monthly Income Plans(MIP) funds to invest in Medium to Long term bonds.

Purpose: Invest in these funds when you are ready to risk your monthly income generation plan. The category can be clubbed with debt- dynamic to lower down the risk factor.

Top 10 Credit Risk Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
SBI Credit Risk FundDebtModerate5.8%4star5,368
Franklin India Credit Risk Fund DebtModerate7.0%4star7,007
BOI AXA Credit Risk FundDebtModerate-0.9%4star1,421
Baroda Pioneed Credit Risk FundDebtModerate5.9%3star946
Reliance Credit Risk FundDebtModerate5.8%3star10,580
Aditya Birla Sun Life Credit Risk FundDebtModerate6.4%3star7,896
Kotak Credit Risk FundDebtModerately Low5.9%3star4,927
L&T Credit Risk FundDebtModerate5.0%3star3,757
UTI Credit Risk FundDebtModerate5.6%3star5,093
DHFL Pramerica Credit Risk FundDebtModerate5.8%3star985
DSP BlackRock Credit Risk FundDebtModerate1.3%2star5,571
Invesco India Credit Risk FundDebtModerate3.6%2star365
ICICI Prudential Credit Risk FundDebtModerate6.6%2star11,356
Sundaram Short Term Credit Risk FundDebtModerately Low7.4%2star431
Axis Credit Risk FundDebtModerate5.9%2star1,664
View All Top 10 Credit Risk Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

SBI Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.48% annualized returns in the last 3 years. In the last 1 year, it gave 5.79% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.79% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Lokesh Mallya, Mansi Sajeja

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating4star
AUM5,368Cr
1Y Returns5.8%

Franklin India Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.78% annualized returns in the last 3 years. In the last 1 year, it gave 7.04% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.04% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Santosh Kamath, Sumit Gupta

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM7,007Cr
1Y Returns7.0%

BOI AXA Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided -100% annualized returns in the last 3 years. In the last 1 year, it gave -0.89% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -0.89% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Alok Singh

Launch Date26 Feb 2015
Min Investment Amt5,000
Groww Rating4star
AUM1,421Cr
1Y Returns-0.9%

Baroda Pioneed Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 9.56% annualized returns in the last 3 years. In the last 1 year, it gave 5.9% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.9% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Alok Kumar Sahoo, Karn Kumar

Launch Date22 Jan 2015
Min Investment Amt5,000
Groww Rating3star
AUM946Cr
1Y Returns5.9%

Reliance Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.49% annualized returns in the last 3 years. In the last 1 year, it gave 5.8% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.8% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Prashant R.Pimple

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating3star
AUM10,580Cr
1Y Returns5.8%

Aditya Birla Sun Life Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 9.17% annualized returns in the last 3 years. In the last 1 year, it gave 6.39% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.39% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Maneesh Dangi, Sunaina da Cunha

Launch Date16 Apr 2015
Min Investment Amt1,000
Groww Rating3star
AUM7,896Cr
1Y Returns6.4%

Kotak Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.83% annualized returns in the last 3 years. In the last 1 year, it gave 5.87% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.87% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Deepak Agrawal

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating3star
AUM4,927Cr
1Y Returns5.9%

L&T Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 7.96% annualized returns in the last 3 years. In the last 1 year, it gave 5.04% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.04% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Shriram Ramanathan, Vikas Garg

Launch Date31 Dec 2012
Min Investment Amt10,000
Groww Rating3star
AUM3,757Cr
1Y Returns5.0%

UTI Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.6% annualized returns in the last 3 years. In the last 1 year, it gave 5.57% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.57% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Ritesh Nambiar

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating3star
AUM5,093Cr
1Y Returns5.6%

DHFL Pramerica Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided -100% annualized returns in the last 3 years. In the last 1 year, it gave 5.77% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.77% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Kumaresh Ramakrishnan

Launch Date28 Sep 2014
Min Investment Amt5,000
Groww Rating3star
AUM985Cr
1Y Returns5.8%

DSP BlackRock Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 6.81% annualized returns in the last 3 years. In the last 1 year, it gave 1.33% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 1.33% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Laukik Bagwe, Pankaj Sharma

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating2star
AUM5,571Cr
1Y Returns1.3%

Invesco India Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 7.86% annualized returns in the last 3 years. In the last 1 year, it gave 3.65% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 3.65% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Nitish Sikand

Launch Date3 Sep 2014
Min Investment Amt5,000
Groww Rating2star
AUM365Cr
1Y Returns3.6%

ICICI Prudential Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.46% annualized returns in the last 3 years. In the last 1 year, it gave 6.58% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.58% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Manish Banthia, Akhil Kakkar

Launch Date1 Jan 2013
Min Investment Amt100
Groww Rating2star
AUM11,356Cr
1Y Returns6.6%

Sundaram Short Term Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.1% annualized returns in the last 3 years. In the last 1 year, it gave 7.42% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.42% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Sandeep Agarwal

Launch Date26 Feb 2015
Min Investment Amt5,000
Groww Rating2star
AUM431Cr
1Y Returns7.4%

Axis Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 8.52% annualized returns in the last 3 years. In the last 1 year, it gave 5.94% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.94% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Devang Shah

Launch Date14 Jul 2014
Min Investment Amt5,000
Groww Rating2star
AUM1,664Cr
1Y Returns5.9%

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When should I invest in credit opportunity mutual funds?

This is contextual. If you do not wish to invest directly in stocks (because you have better things to do or just don’t feel like it), you can choose equity mutual funds (defined below). If you would like to lower your tax outgo compared to a fixed or recurring deposit and if possible with better returns, you can choose debt mutual funds (defined below). The clearer you are about your need, the faster and confident you will be in taking decisions regarding mutual funds – well, this applies to anything in life!

Who issues credit opportunity mutual funds?

Asset management companies (or AMCs or fund houses) create mutual funds. All AMCs will have to be approved by the government body, Securities and Exchange Board of India (SEBI). All mutual funds have to be whetted by SEBI before it is open for the public to invest.

What does investing in credit opportunity mutual funds actually mean?

Suppose a mutual fund invests in ten stocks and total current market value of these stocks is 1.1 Crore. Out of this, the AMC deducts say, 0.1 Crore for operating the fund (this is known as the expense ratio). So the net value is 1 crore. Now the AMC will divide this 1 Crore into say, 10,000 parts. These parts are known as units. The cost of one unit is 1Cr/10,000 = Rs. 1000. This is known as the Net Asset Value (NAV) of the mutual fund. Suppose the AMC has set a minimum investment requirement of Rs. 500. Then if you pay Rs. 500, you will get 0.5 units of the fund. Remember that the cost of one unit is the cost when you made the purchase. Suppose after one year, the NAV has fallen to Rs. 700 per unit and you wish to exit the fund (also known as redemption), then you sell your 0.5 units back to the AMC and get 0.5 x Rs. 700 = Rs. 350 back. Yes, you invested Rs. 500 and got back Rs. 350 – a loss of 150 over a year. The point is, that you buy units at current NAV and sell units (fully or partially) at current NAV. This is what investing in mutual fund actually means.

How to invest in credit opportunity mutual funds on Groww?

One of the best ways to hedge against the small-cap volatility is to adopt a phased approach, also known as Systematic Investment Plan (SIP) approach. We are sure that you must be aware of SIP and its benefits. Buying in small quantity but buying regularly provides you with faster growth. On Groww.in, all transactions to and from AMC is done via BSE. When you decide to invest in a large cap mutual fund of your choice, you choose that mutual fund on the website and click ‘invest’. Following that, you are redirected to the BSE page where you make the payment. BSE then directs your money to the AMC managing your mutual fund. To be assured at your end, you can visit the individual AMC website after the payment. You would be able to see all your purchased units against your folio number.

How long does it take to start investing in credit opportunity mutual funds if I do not have a KYC?

It is not possible for any investor to start investing in mutual funds without having completed the KYC process. Under the Prevention of Money Laundering Act (PMLA), Know Your Customer (KYC) norms have been mandated to track the legality of funds used in an investment. KYC is a one-time process which every first-time mutual fund investor needs to follow, to be able to invest in a mutual fund. KYC process on Groww can be completed in 2-3 days. KYC can be completed online with the help of E-KYC or electronic KYC. E-KYC Aadhar (based on OTP) : Investor can use online KYC facility using just the aadhar card number and PAN number, by visiting the website and following the easy process. After entering relevant details like aadhar and PAN number, investor will receive an OTP and KYC will be completed instantly. However, one can invest only up to ₹50,000 per fund house per year under this method.

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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