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Best Credit Risk Debt Funds in 2025

What are Debt: Credit Risk funds?


Funds Included All Fund Returns
(3Y annualised)		 Top 5 fund Returns
(3Y annualised)
14 9.7% 11.82%

This fund category is an example of Debt Scheme funds.

Debt funds invest primarily in fixed-income securities such as government bonds, corporate bonds, debentures, treasury bills, and money market instruments. They aim to provide steady income and capital preservation with lower volatility compared to equity funds. Depending on portfolio maturity and credit quality, debt funds range from liquid and short-duration funds to gilt and dynamic bond funds. Suitable for investors with moderate to low risk appetite seeking regular income.

Trailing returns for Debt: Credit Risk funds

These are average returns over the indicated period.

Monthly trailing returns:
Nov-2025Oct-2025Sep-2025Aug-2025Jul-2025Jun-2025
0.43%0.78%0.80%0.21%0.73%0.40%

Quarterly trailing returns:
2025Q42025Q32025Q22025Q12024Q42024Q3
1.21%1.75%3.29%3.81%1.82%2.38%

Yearly trailing returns:
202520242023202220212020
10.42%8.58%8.50%4.54%9.10%2.05%

Rolling returns for Debt: Credit Risk funds

SIP
10% Step-up SIP
Lump sum
SWP
10% Step-up SWP
Metric Any 1Y SIPAny 2Y SIPAny 3Y SIPAny 5Y SIPAny 7Y SIPAny 10Y SIP
Minimum1.66%6.57%5.7%6.39%7.45%7.48%
Median8.65%9.53%8.84%8.03%7.76%7.53%
Maximum14.44%11.96%11.65%9.33%8.02%7.57%
Risk2.4%1.33%1.45%0.83%0.16%0.02%
Sharpe Ratio68.43%189.77%127.06%124.7%462.44%2446.15%
Data as of 14-Dec-2025
Metric Any 1Y SIPAny 2Y 目↑ SIPAny 3Y 目↑ SIPAny 5Y 目↑ SIPAny 7Y 目↑ SIPAny 10Y 目↑ SIP
Minimum1.66%9.52%10.03%8.98%8.44%8.0%
Median8.65%10.45%10.17%9.05%8.49%8.04%
Maximum14.44%10.87%10.25%9.11%8.54%8.07%
Risk2.4%0.5%0.07%0.04%0.03%0.02%
Sharpe Ratio68.43%685.67%4713.83%5032.08%5113.16%5408.7%
Data as of 14-Dec-2025
Metric Any 1YAny 2YAny 3YAny 5YAny 7YAny 10Y
Minimum2.77%7.69%6.56%6.97%6.88%7.59%
Median8.7%9.4%8.7%8.0%7.23%7.63%
Maximum13.53%10.96%10.87%9.23%7.56%7.68%
Risk2.36%0.83%1.12%0.67%0.19%0.02%
Sharpe Ratio72.01%291.08%151.21%149.83%119.51%2785.19%
Data as of 14-Dec-2025
Metric Any 1Y SWPAny 2Y SWPAny 3Y SWPAny 5Y SWPAny 7Y SWPAny 10Y SWP
Minimum1.65%6.88%5.84%6.57%6.03%7.7%
Median8.81%8.87%8.57%8.0%6.69%7.77%
Maximum14.42%10.89%11.09%9.87%7.15%7.9%
Risk2.74%1.01%1.41%0.93%0.27%0.05%
Sharpe Ratio66.19%185.96%111.93%107.01%-112.92%1496.77%
Data as of 14-Dec-2025
Metric Any 1Y SWPAny 2Y 目↑ SWPAny 3Y 目↑ SWPAny 5Y 目↑ SWPAny 7Y 目↑ SWPAny 10Y 目↑ SWP
Minimum1.65%9.29%9.29%7.78%6.25%7.45%
Median8.81%9.5%9.34%7.83%6.3%7.46%
Maximum14.42%9.85%9.42%7.87%6.35%7.49%
Risk2.74%0.17%0.03%0.03%0.03%0.01%
Sharpe Ratio66.19%1463.18%6837.5%3085.71%-2270.0%3462.5%
Data as of 14-Dec-2025

Fundwise SIP, Lumpsum and SWP returns


Rolling SIP returns (less than 1 year)
Fund Any 1M SIPAny 3M SIPAny 6M SIP
Franklin India Credit Risk Fund11.55%11.48%11.02%
HDFC Credit Risk Debt Fund7.19%8.44%7.58%
Invesco India Credit Risk Fund8.24%8.13%6.78%
Bandhan Credit Risk Fund6.61%6.75%5.6%
DSP Credit Risk Fund5.99%6.48%5.74%
HSBC Credit Risk Fund7.68%7.26%7.45%
UTI Credit Risk Fund7.03%7.83%7.06%
Kotak Credit Risk Fund6.34%9.62%9.24%
Baroda BNP Paribas Credit Risk Fund7.26%8.32%7.8%
Nippon India Credit Risk Fund7.7%8.57%8.41%
ICICI Prudential Credit Risk Fund10.04%11.33%10.13%
SBI Credit Risk Fund7.6%7.95%7.34%
Aditya Birla Sun Life Credit Risk Fund11.31%11.55%10.62%
Axis Credit Risk Fund9.31%9.74%9.01%
Data as of 14-Dec-2025

Note: Returns for less than one year are annualised. However, given the nature of the calculation, XIRR for such periods are not meaningful.

Rolling SIP returns (1 year or more):

Fund Any 1Y SIPAny 3Y SIPAny 5Y SIP
Franklin India Credit Risk Fund9.01%8.42%7.05%
HDFC Credit Risk Debt Fund8.58%8.05%7.87%
Invesco India Credit Risk Fund9.22%10.04%9.23%
Bandhan Credit Risk Fund7.0%7.53%6.68%
DSP Credit Risk Fund8.25%7.22%5.07%
HSBC Credit Risk Fund7.84%14.51%0%
UTI Credit Risk Fund7.94%8.29%8.82%
Kotak Credit Risk Fund8.47%8.18%8.13%
Baroda BNP Paribas Credit Risk Fund8.14%8.42%8.81%
Nippon India Credit Risk Fund9.54%9.5%9.01%
ICICI Prudential Credit Risk Fund9.02%9.67%8.76%
SBI Credit Risk Fund8.74%8.21%7.8%
Aditya Birla Sun Life Credit Risk Fund11.06%8.17%9.82%
Axis Credit Risk Fund8.23%7.57%7.38%
Data as of 14-Dec-2025
SIP Calculator


Rolling Lumpsum returns
Fund Any 1YAny 3YAny 5Y
Franklin India Credit Risk Fund9.06%8.91%7.32%
HDFC Credit Risk Debt Fund8.79%8.3%7.41%
Invesco India Credit Risk Fund10.62%10.66%7.8%
Bandhan Credit Risk Fund7.56%7.47%6.62%
DSP Credit Risk Fund8.02%6.43%5.43%
HSBC Credit Risk Fund7.68%12.03%0%
UTI Credit Risk Fund8.22%8.1%10.1%
Kotak Credit Risk Fund8.07%8.42%8.76%
Baroda BNP Paribas Credit Risk Fund8.29%8.63%7.54%
Nippon India Credit Risk Fund9.84%9.2%9.3%
ICICI Prudential Credit Risk Fund9.05%9.14%8.01%
SBI Credit Risk Fund8.98%8.13%7.77%
Aditya Birla Sun Life Credit Risk Fund9.73%8.97%10.11%
Axis Credit Risk Fund7.91%7.35%7.79%
Data as of 14-Dec-2025

Rolling SWP returns
Fund Any 1Y SWPAny 3Y SWPAny 5Y SWP
Franklin India Credit Risk Fund8.95%9.22%8.55%
HDFC Credit Risk Debt Fund8.95%8.01%6.85%
Invesco India Credit Risk Fund10.24%11.27%6.2%
Bandhan Credit Risk Fund7.66%7.31%6.65%
DSP Credit Risk Fund7.68%7.12%6.87%
HSBC Credit Risk Fund7.67%9.3%0%
UTI Credit Risk Fund8.56%7.89%11.62%
Kotak Credit Risk Fund8.19%8.62%9.38%
Baroda BNP Paribas Credit Risk Fund8.19%7.58%7.01%
Nippon India Credit Risk Fund10.32%8.88%9.62%
ICICI Prudential Credit Risk Fund9.02%8.53%7.13%
SBI Credit Risk Fund8.6%8.45%7.86%
Aditya Birla Sun Life Credit Risk Fund11.19%10.07%8.47%
Axis Credit Risk Fund8.19%7.8%7.76%
Data as of 14-Dec-2025

SIP and SWP returns with step-up


Rolling SIP returns with 10% step-up
Fund Any 1Y SIPAny 3Y 目↑ SIPAny 5Y 目↑ SIP
Franklin India Credit Risk Fund9.01%7.66%6.68%
HDFC Credit Risk Debt Fund8.58%8.58%7.93%
Invesco India Credit Risk Fund9.22%10.04%9.3%
Bandhan Credit Risk Fund7.0%7.66%7.12%
DSP Credit Risk Fund8.25%16.77%14.66%
HSBC Credit Risk Fund7.84%14.64%0%
UTI Credit Risk Fund7.94%8.29%8.75%
Kotak Credit Risk Fund8.47%9.16%7.94%
Baroda BNP Paribas Credit Risk Fund8.14%8.98%9.03%
Nippon India Credit Risk Fund9.54%9.51%9.05%
ICICI Prudential Credit Risk Fund9.02%9.69%8.84%
SBI Credit Risk Fund8.74%8.76%8.23%
Aditya Birla Sun Life Credit Risk Fund11.06%13.37%11.73%
Axis Credit Risk Fund8.23%9.2%8.41%
Data as of 14-Dec-2025

Rolling SWP returns with 10% step-up
Fund Any 1Y SWPAny 3Y 目↑ SWPAny 5Y 目↑ SWP
Franklin India Credit Risk Fund8.95%10.75%5.78%
HDFC Credit Risk Debt Fund8.95%8.03%6.87%
Invesco India Credit Risk Fund10.24%11.29%6.37%
Bandhan Credit Risk Fund7.66%7.42%5.67%
DSP Credit Risk Fund7.68%14.46%9.35%
HSBC Credit Risk Fund7.67%9.41%0%
UTI Credit Risk Fund8.56%7.91%11.46%
Kotak Credit Risk Fund8.19%8.03%5.81%
Baroda BNP Paribas Credit Risk Fund8.19%8.55%11.58%
Nippon India Credit Risk Fund10.32%8.9%9.54%
ICICI Prudential Credit Risk Fund9.02%8.56%7.19%
SBI Credit Risk Fund8.6%8.95%6.62%
Aditya Birla Sun Life Credit Risk Fund11.19%10.18%8.62%
Axis Credit Risk Fund8.19%8.38%6.94%
Data as of 14-Dec-2025

Note:N.A. in returns indicate that the fund does not have sufficient history.

Tables have been updated on 14-Dec-2025

How are Debt: Credit Risk funds taxed on selling?

Debt Funds
Tax for FY2025-26		 STCG Rate LTCG Eligibility LTCG Rate
Bought Before
1 Apr 2023		 Slab After 2Y 12.5%
Bought After
31 Mar 2023		 Slab Always STCG Slab

Note:

  • Dividends from mutual funds (called IDCW or Income Distribution cum Capital Withdrawal funds), are added to the income of the investor and taxed at their highest applicable (slab) rate.
  • Cess and surcharge (if applicable) is to be applied to taxes from mutual funds from selling and dividends.
  • Switches, SWP and selling any lump sum amount are taxable as per the table above.

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Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme.

Note: NAVs and returns updated on 14-Dec-2025.

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