The number
The median floating rate fund returned 5.98% in the year to 6 October 2026, less than the median liquid fund's 6.47%. Over three years it returned 7.60% a year against 6.93%.
A floater fund keeps at least 65% of its money in floating rate instruments, whose interest resets as rates move; fixed-rate bonds swapped into floating exposure count towards that. The idea is to lose less than a fixed-coupon fund when rates rise.
All figures are for the Direct plan, Growth option, computed from daily NAVs to 6 October 2026. Returns over a year are compounded annual rates. All 12 funds have at least five years of history.
Against neighbouring categories
| Period | Floater | Liquid | Money market | Short duration | Corporate bond |
|---|---|---|---|---|---|
| 1 month | 0.06% | 0.46% | 0.46% | 0.02% | −0.04% |
| 3 months | 0.82% | 1.56% | 1.59% | 0.55% | 0.36% |
| 6 months | 3.33% | 3.25% | 3.65% | 3.32% | 3.32% |
| 1 year | 5.98% | 6.47% | 6.50% | 5.03% | 4.64% |
| 3 years (a year) | 7.60% | 6.93% | 7.37% | 7.48% | 7.25% |
| 5 years (a year) | 6.77% | 6.37% | 6.69% | 6.45% | 6.27% |
| Volatility | 0.81% | 0.17% | 0.42% | 0.96% | 1.13% |
| Worst 3-year fall | 0.47% | 0.01% | 0.15% | 0.53% | 0.63% |
Median Direct Growth figures. Over three years floaters have the third-highest median of SEBI's open-ended debt categories, after credit risk funds (8.94%) and medium duration funds (7.77%). Over the last three months they made about half what liquid funds did, 0.82% against 1.56%, though more than short-duration and corporate bond funds.
The 12 funds
| Fund | TER | 1 year | 3 years (a year) | 5 years (a year) | Volatility | Worst 3-year fall |
|---|---|---|---|---|---|---|
| Axis | 0.22% | 6.42% | 8.43% | 7.17% | 2.09% | 1.26% |
| ICICI Prudential | 0.29% | 6.37% | 7.76% | 7.03% | 0.76% | 0.45% |
| Bandhan | 0.14% | 6.31% | 7.82% | 6.80% | 0.99% | 0.47% |
| Franklin India | 0.38% | 6.22% | 8.00% | 7.15% | 0.81% | 0.52% |
| Aditya Birla Sun Life | 0.25% | 6.03% | 7.44% | 6.81% | 0.56% | 0.21% |
| UTI | 0.44% | 6.01% | 7.09% | 6.33% | 0.58% | 0.34% |
| Tata | 0.31% | 5.96% | 7.42% | 6.74% | 0.81% | 0.45% |
| SBI | 0.28% | 5.94% | 7.43% | 6.67% | 0.91% | 0.58% |
| HDFC | 0.27% | 5.67% | 7.53% | 6.84% | 0.71% | 0.35% |
| Kotak | 0.24% | 5.52% | 7.66% | 6.70% | 0.77% | 0.46% |
| DSP | 0.27% | 5.22% | 7.77% | 6.66% | 1.11% | 0.50% |
| Nippon India | 0.35% | 5.10% | 7.43% | 6.59% | 0.88% | 0.53% |
TER is the latest Direct-plan expense ratio. From first to last over one year is 1.32 points, about ₹13,200 on ₹10 lakh before tax.
What the table shows
Axis's fund is not like the others. It has the best one-, three- and five-year returns, and also about two and a half times the median volatility and the deepest three-year fall. Its August portfolio disclosure gives an average maturity of 7.73 years; the median for the twelve is 2.58. Longer paper moves more with interest rates, which fits both its higher returns and its bigger swings.
One year and three years rank differently. DSP is 11th of 12 over one year and 4th over three. UTI is 6th over one year and last over both three (7.09%) and five years (6.33%), the only fund below the liquid median over five.
Cost lines up only loosely. The two cheapest, Bandhan (0.14%) and Axis (0.22%), are third and first over one year, and the dearest, UTI (0.44%), has the weakest long record. In between, TERs of 0.24% to 0.38% sit beside every kind of result.
What this does not tell you
A floating coupon does not remove price risk. Funds that use swaps, or hold longer paper as Axis does, can still move with bond prices; the volatility column is the record of how much they did.
Yields are elsewhere. What these portfolios yield now is in our debt fund YTM post.
Returns are a record, not a forecast. The last three months favoured liquid funds; another stretch may not.
Where to go from here
For all debt categories side by side, see debt fund returns, overnight to gilt, and for the two closest alternatives, short-duration vs corporate bond funds. The guide to the debt fund duration ladder explains why floaters sit off the ladder, and debt funds explained separates duration risk from credit risk.
Frequently asked questions
How have floating rate debt funds performed in the last year?
The median floating rate fund (Direct plan, Growth option) returned 5.98% in the year to 6 October 2026. The 12 funds ranged from 5.10% (Nippon India) to 6.42% (Axis). Over three years the median was 7.60% a year.
Do floater funds beat liquid funds?
Not over the last year: none of the 12 reached the liquid median of 6.47%. Over three years all 12 beat the liquid median of 6.93% a year, and over five years 11 of 12 beat its 6.37%.
Are floater funds less risky than other debt funds?
On the three-year record they moved less than short-duration and corporate bond funds and more than liquid funds. Median volatility was 0.81%, against 0.96% for short-duration, 1.13% for corporate bond and 0.17% for liquid funds. Axis's floater was the exception at 2.09%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
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