Best Gilt Mutual Funds

Gilt mutual funds are schemes that invest in Government securities issued by the Reserve Bank of India (RBI) on behalf of the government. The RBI issues securities with varying tenures to raise money for the government from various entities such as banks, insurance companies, and other institutions. On maturity, the gilt fund will return the government security and receive money in return.

The best gilt mutual funds invest in fixed-interest generating securities of the Central and State Governments. Unlike conventional debt funds, gilt funds do not invest in corporate bonds reducing the risk involved. The government security market is largely dominated by institutional investors, but gilt funds allow retail investors to invest in it easily.

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Top 10 Gilt Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
IDFC Government Securities Fund Investment PlanDebtModerate15.6%5star480
Nippon India Gilt Securities FundDebtModerate15.2%5star1,135
SBI Magnum Constant Maturity FundDebtModerate14.7%5star551
DHFL Pramerica Gilt FundDebtModerate12.4%4star34
Edelweiss Government Securities FundDebtModerate13.8%4star71
DSP Government Securities FundDebtModerate15.9%4star523
SBI Magnum Gilt FundDebtModerate16.0%4star2,071
UTI Gilt FundDebtModerate13.7%4star503
Aditya Birla Sun Life Government Securities FundDebtModerate13.9%4star231
LIC MF G Sec FundDebtModerate13.9%4star40
ICICI Prudential Gilt FundDebtModerate13.0%3star1,272
Axis Gilt FundDebtModerate15.0%3star49
HDFC Gilt Fund DebtModerate10.3%3star1,202
Canara Robeco Gilt FundDebtModerate13.0%3star67
Tata Gilt Securities FundDebtModerate12.6%2star165
View All Top 10 Gilt Mutual Funds

Features of Gilt Mutual Fund

The purpose of these funds is to enable investors to invest in government securities that come with the least risk possible. The best gilt mutual funds in India generate higher returns in the falling interest rate environment. These funds are a perfect investment tool for investors seeking reasonable returns with low risk.

Some of these funds come with varying maturities, making them a lucrative investment option for a wide range of investors. Gilt funds enable investors to generate reasonable returns by anticipating interest rate movements. RBI provides repo rate signals based on macro-economic conditions such as GDP growth rate, inflation, commodity prices, etc. This signal drives the interest rate movements which is leveraged by these funds.

Some of these funds are short-term, thereby minimizing the interest rate risk and the associated vulnerabilities. For investors seeking long-term investment, government bonds with maturities from five to even thirty years are available. These funds will have a higher associated risk since the interest rate is bound to fluctuate over such a long timeframe.

Taxability

These funds invest only in government securities and receive the tax treatment of debt funds. If the funds are held for a period of fewer than 36 months, a short-term capital gain tax as per the applicable income tax slab will be levied. Investors who hold the gilt mutual funds for a period over 36 months, a long-term capital gain tax of 20% with indexation benefits will be levied. Additional cess as applicable will also be levied.

Who Are These Funds Suited For?

If you are looking for a low risk and higher returns investment with capital protection, then gilt fund investment is an ideal option for you. Gilt funds only invest in government securities from medium to long term periods, thus satisfying the security needs of the investors. Moreover, gilt funds ensure the safeguarding of the capital, unlike bond funds which may allocate a part of your assets to other private instruments.

These funds also have the edge over equity funds due to better asset quality since the chances of government going bankrupt are minimal. However, the returns that even best Gilt funds can provide are comparatively lower than other aggressive investment instruments. They are an ideal investment option for risk-averse investors.

Major Advantages

These funds provide many benefits to the investors in terms of cost, risk factor and the ease of investment.Best gilt mutual funds in India are actively traded and are highly liquid, enabling investors to exit seamlessly as per their requirement. One of the major advantages of these funds is low credit risk or practically no credit risk. Investors do not have to worry about the credit quality of these securities since the Government of India is liable to pay the interest.

Gilt mutual funds enable investors to invest in gilts which may otherwise require a minimum investment of crores. With best gilt mutual funds, investors can diversify their portfolio and time the interest rate movements. These funds allow investors to seek reasonable returns and achieve wealth accumulation over a medium to long-term investment horizon.

Funds managers of these funds will trade the underlying instrument based on the interest rate outlook. These trading in and out of gilts with different maturities generates additional returns besides the yield. Using these techniques, these funds can potentially generate high returns. As seen in the following table, one-year returns for some of the best gilt funds in India, 2019 were over 15 percent which is at par with some of the best equity-oriented funds.

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

IDFC Government Securities Investment Plan Direct Growth

Fund Performance: This fund has given 9.27% annualized returns in the last three years. In the last year, its returns were 15.61%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 15.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM480Cr
1Y Returns15.6%

Nippon India Gilt Securities Fund Direct Growth

Fund Performance: This fund has given 10.04% annualized returns in the last three years. In the last year, its returns were 15.18%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 15.18% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹5,000
AUM1,135Cr
1Y Returns15.2%

SBI Magnum Constant Maturity Fund Direct Growth

Fund Performance: This fund has given 10.33% annualized returns in the last three years. In the last year, its returns were 14.72%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 14.72% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM551Cr
1Y Returns14.7%

PGIM India Gilt Direct Plan Growth

Fund Performance: This fund has given 8.21% annualized returns in the last three years. In the last year, its returns were 12.42%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 12.42% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM34Cr
1Y Returns12.4%

Edelweiss Government Securities Fund Direct Growth

Fund Performance: This fund has given 8.84% annualized returns in the last three years. In the last year, its returns were 13.79%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.79% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM71Cr
1Y Returns13.8%

DSP Government Securities Direct Plan Growth

Fund Performance: This fund has given 9.28% annualized returns in the last three years. In the last year, its returns were 15.95%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 15.95% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹500
AUM523Cr
1Y Returns15.9%

SBI Magnum Gilt Fund Direct Growth

Fund Performance: This fund has given 8.89% annualized returns in the last three years. In the last year, its returns were 16.04%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 16.04% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM2,071Cr
1Y Returns16.0%

UTI Gilt Fund Direct Growth

Fund Performance: This fund has given 8.05% annualized returns in the last three years. In the last year, its returns were 13.66%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.66% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM503Cr
1Y Returns13.7%

Aditya Birla Sun Life Government Securities Fund Direct Plan Growth

Fund Performance: This fund has given 9.05% annualized returns in the last three years. In the last year, its returns were 13.86%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.86% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹1,000
AUM231Cr
1Y Returns13.9%

LIC MF Govt. Securities Fund Direct Growth

Fund Performance: This fund has given 8.79% annualized returns in the last three years. In the last year, its returns were 13.92%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.92% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹10,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹10,000
AUM40Cr
1Y Returns13.9%

ICICI Prudential Gilt Fund Direct Plan Growth

Fund Performance: This fund has given 8.74% annualized returns in the last three years. In the last year, its returns were 13.02%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.02% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM1,272Cr
1Y Returns13.0%

Axis Gilt Fund Direct Plan Growth

Fund Performance: This fund has given 8.07% annualized returns in the last three years. In the last year, its returns were 14.96%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 14.96% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM49Cr
1Y Returns15.0%

HDFC Gilt Fund Direct Plan Growth

Fund Performance: This fund has given 7.02% annualized returns in the last three years. In the last year, its returns were 10.27%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 10.27% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM1,202Cr
1Y Returns10.3%

Canara Robeco Gilt Fund Direct Growth

Fund Performance: This fund has given 7.57% annualized returns in the last three years. In the last year, its returns were 13.03%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 13.03% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM67Cr
1Y Returns13.0%

Tata Gilt Securities Fund Direct Growth

Fund Performance: This fund has given 7.84% annualized returns in the last three years. In the last year, its returns were 12.64%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 12.64% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM165Cr
1Y Returns12.6%

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