Best Credit Risk Mutual Funds
Credit risk funds must keep at least 65% in corporate bonds rated AA and below. The lower rating is what pays the extra yield, and it is also the risk — a downgrade or default hits the NAV directly, which is not a thing that happens in a gilt fund.
Top credit risk mutual funds by 3Y returns
12Direct plan, Growth option — ranked by 3-year CAGR. Open a fund for NAV history, rolling returns, risk metrics and peer rank.
As of 05 Oct 2026, DSP Credit Risk Fund (Direct plan, Growth option) leads credit risk mutual funds on 3-year CAGR at +16.68%, followed by Aditya Birla Sun Life Credit Risk Fund at +13.04% and HSBC Credit Risk Fund at +11.68%. Across 12 credit risk mutual funds the category averaged +9.88% over three years, at an average expense ratio of 0.73%. All figures are computed from public AMFI NAV history and recomputed daily; past returns do not predict future ones.
| 1 | DSP Credit Risk Fund DSP | ★★★★☆ | +10.8% | +16.7% | +13.4% | 0.43% | ₹250.18Cr |
| 2 | Aditya Birla Sun Life Credit Risk Fund Aditya Birla Sun Life | ★★★★★ | +12.0% | +13.0% | +10.9% | 0.80% | ₹1,337Cr |
| 3 | HSBC Credit Risk Fund HSBC | ★★★★☆ | +6.4% | +11.7% | — | 0.84% | ₹473.50Cr |
| 4 | Bank of India Credit Risk FundSmall fund Bank of India | ★★★☆☆ | +17.2% | +10.1% | +27.8% | 0.61% | ₹94.09Cr |
| 5 | Invesco India Credit Risk Fund Invesco | ★★★☆☆ | +7.5% | +9.4% | +8.4% | 0.28% | ₹160.21Cr |
| 6 | ICICI Prudential Credit Risk Fund ICICI Prudential | ★★★★★ | +7.5% | +9.0% | +7.9% | 0.80% | ₹6,000Cr |
| 7 | Axis Credit Risk Fund Axis | ★★★☆☆ | +7.8% | +8.7% | +7.6% | 0.82% | ₹354.86Cr |
| 8 | Kotak Credit Risk Fund Kotak Mahindra | ★★☆☆☆ | +6.6% | +8.5% | +6.7% | 0.81% | ₹739.85Cr |
| 9 | SBI Credit Risk Fund SBI | ★★☆☆☆ | +7.8% | +8.5% | +7.7% | 0.90% | ₹2,138Cr |
| 10 | HDFC Credit Risk Fund HDFC | ★★★☆☆ | +6.9% | +8.1% | +7.1% | 1.01% | — |
| 11 | UTI - Credit Risk Fund. UTI | ★☆☆☆☆ | +6.3% | +7.7% | +7.1% | 0.76% | ₹252.19Cr |
| 12 | Bandhan Credit Risk Fund Bandhan | ★☆☆☆☆ | +5.6% | +7.2% | +6.3% | 0.66% | ₹229.77Cr |
NAV data as of 05 Oct 2026. Returns are CAGR for periods ≥1 year, computed from AMFI NAV history. Ratings are WealthTicker’s own, ranked within sub-category peers — not a SEBI or agency rating. See our methodology for every formula. This is data, not investment advice.
Popular comparisons
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From the blog
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To 1 October 2026 the median credit risk fund returned 7.55% in a year, against 4.78% for corporate bond funds. The 12 funds ranged from 5.58% to 17.20%.
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The median credit risk fund returned 6.50% in the year to 22 May 2026, against 3.48% for corporate bond funds. Four of 12 got a lift from one-day NAV jumps.
Frequently asked questions
What are credit risk mutual funds?
Credit risk funds must keep at least 65% in corporate bonds rated AA and below. The lower rating is what pays the extra yield, and it is also the risk — a downgrade or default hits the NAV directly, which is not a thing that happens in a gilt fund.
Which is the best credit risk fund right now?
DSP Credit Risk Fund by DSP currently ranks first among credit risk mutual funds by 3-year CAGR at +16.68%. Rankings move with NAVs — past returns don't guarantee future performance.
What returns have credit risk mutual funds given?
The category has averaged +8.54% over 1 year, +9.88% annualized over 3 years, +10.07% annualized over 5 years — peer averages over the live funds in the category, computed from AMFI NAV history.
How are credit risk mutual funds taxed?
Debt taxation: all gains are added to your income and taxed at your slab rate, regardless of holding period (for units bought on or after 1 April 2023).