Best Gilt Debt Mutual Funds

If you are a kind of a person who would want to go for funds that are safe and provide high returns than Debt Gilt is something which you shouldn’t avoid. These funds invest in the fixed income securities issued by Government of India with almost zero risks to the investor. The returns range from anything between 10 percent to 13 percent or more depending on the area of investment.

In gilt funds, investors invest their money in securities issued by both central and state government. There no risk associated with gilt funds as these are backed by the government. However, these not completely risk-free and are vulnerable to change in interest rates.

In fact, for long-term investing, they are the riskiest of all other debt funds available in the market due to their sensitivity to change in interest rates.

Gilt funds are those mutual fund schemes which are floated by asset management companies or AMCs with exclusive investments in various government securities only. Government securities include central government securities, state government securities and treasury bills.

The first gilt fund in India was set up in December 1998. The gilt funds provide to the investors, the safety of investments made in government securities and better returns than direct investments in these securities through investing in a variety of government securities yielding varying rate of returns.

Returns are taxed as per your income slab if sold before three years and post that negligible tax (20% indexation benefit) post three years.

Gilt funds are the most liquid of all instruments in the debt market and have very low credit risk. However, they do carry an interest rate risk. A gilt fund ensures better asset quality but with comparatively lower returns. Gilt funds are suitable for those investors who understand the debt markets well and are risk averse. These funds can be of two types- conventional gilts and index linked gilts.

Purpose: Invest to gain good returns without taking much of risks.

Top 10 Gilt Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
SBI Magnum Constant Maturity FundDebtModerately Low6.5%4star334
IDFC Government Securities Fund - PF PlanDebtModerate2.4%4star101
IDFC Government Securities Fund Investment PlanDebtModerate4.1%4star358
SBI Magnum Gilt FundDebtModerate2.4%4star1,609
ICICI Prudential Gilt Fund - Investment Plan - PF OptionDebtModerate4.0%4star860
Aditya Birla Sun Life Government Securities FundDebtModerate2.6%4star158
ICICI Prudential Short Term Gilt FundDebtModerate4.0%4star146
Reliance Gilt Securities FundDebtModerate5.0%4star870
Reliance Gilt Securities FundDebtModerate5.0%4star870
ICICI Prudential Gilt FundDebtModerate4.6%4star1,024
L&T Gilt FundDebtModerate3.8%4star130
Edelweiss Government Securities FundDebtModerate4.4%3star130
HDFC Gilt Fund - Short TermDebtModerately Low4.7%3star372
HDFC Gilt Fund DebtModerate3.4%3star2,182
DSP BlackRock Government Securities FundDebtModerate3.9%3star414
View All Top 10 Gilt Mutual Funds

Let's have a closer look

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

SBI Magnum Constant Maturity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 9.01% annualized returns in the last 3 years. In the last 1 year, it gave 6.55% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.55% 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: Dinesh Ahuja

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating4star
AUM334Cr
1Y Returns6.5%

IDFC Government Securities Fund - Investment Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.86% annualized returns in the last 3 years. In the last 1 year, it gave 2.44% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.44% 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: Suyash Choudhary

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating4star
AUM101Cr
1Y Returns2.4%

IDFC Government Securities Fund Investment Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.48% annualized returns in the last 3 years. In the last 1 year, it gave 4.06% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.06% 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: Suyash Choudhary

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM358Cr
1Y Returns4.1%

SBI Magnum Constant Maturity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.82% annualized returns in the last 3 years. In the last 1 year, it gave 2.41% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.41% 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: Dinesh Ahuja

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating4star
AUM1,609Cr
1Y Returns2.4%

ICICI Prudential Gilt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 8.78% annualized returns in the last 3 years. In the last 1 year, it gave 4.04% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.04% 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: Manish Banthia, Anuj Tagra

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM860Cr
1Y Returns4.0%

Aditya Birla Sun Life Government Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 8.15% annualized returns in the last 3 years. In the last 1 year, it gave 2.63% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.63% 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: Pranay Sinha, Ashish Kela

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating4star
AUM158Cr
1Y Returns2.6%

ICICI Prudential Gilt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 8.01% annualized returns in the last 3 years. In the last 1 year, it gave 4% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4% 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: Rahul Goswami, Anuj Tagra

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating4star
AUM146Cr
1Y Returns4.0%

Reliance Gilt Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 9.36% annualized returns in the last 3 years. In the last 1 year, it gave 5.02% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.02% 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: Prashant R.Pimple

Launch Date22 Jul 2013
Min Investment Amt5,000
Groww Rating4star
AUM870Cr
1Y Returns5.0%

Reliance Gilt Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 9.17% annualized returns in the last 3 years. In the last 1 year, it gave 5.02% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.02% 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: Prashant R.Pimple

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM870Cr
1Y Returns5.0%

ICICI Prudential Gilt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 8.38% annualized returns in the last 3 years. In the last 1 year, it gave 4.56% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.56% 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: Rahul Goswami, Anuj Tagra

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM1,024Cr
1Y Returns4.6%

L&T Gilt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.88% annualized returns in the last 3 years. In the last 1 year, it gave 3.83% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 3.83% 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: Shriram Ramanathan, Jalpan Shah

Launch Date31 Dec 2012
Min Investment Amt10,000
Groww Rating4star
AUM130Cr
1Y Returns3.8%

Edelweiss Government Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided -100% annualized returns in the last 3 years. In the last 1 year, it gave 4.44% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.44% 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: Dhawal Dalal, Gautam Kaul

Launch Date12 Feb 2014
Min Investment Amt5,000
Groww Rating3star
AUM130Cr
1Y Returns4.4%

HDFC Corporate Bond Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.89% annualized returns in the last 3 years. In the last 1 year, it gave 4.72% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.72% 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: Anil Bamboli

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating3star
AUM372Cr
1Y Returns4.7%

HDFC Gilt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.23% annualized returns in the last 3 years. In the last 1 year, it gave 3.36% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 3.36% 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: Anil Bamboli

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating3star
AUM2,182Cr
1Y Returns3.4%

DSP BlackRock Government Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.46% annualized returns in the last 3 years. In the last 1 year, it gave 3.87% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 3.87% 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: Vikram Chopra, Saurabh Bhatia

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating3star
AUM414Cr
1Y Returns3.9%

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When should I invest in gilt debt 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 gilt 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.

How to invest in gilt 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.

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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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