Best Large Cap Mutual Funds

Best Gilt Mutual Funds in India to Invest

Gilt Mutual Funds are specialised debt investment instruments that exclusively invest in government securities issued by India's central and state governments. These funds offer investors a unique opportunity to access government bond markets, offering a stable and relatively low-risk investment avenue. Ideal for conservative investors seeking security and consistent returns, gilt funds play a crucial role in creating a balanced investment portfolio.

Key Benefits of Investing in Gilt Mutual Funds

  • Sovereign Safety : Investments backed by government securities
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Invest in Best Gilt Mutual Funds in India for 2026

Explore the list of top-performing gilt mutual funds schemes curated by our experts

Kotak Gilt Fund - Growth

  • Returns
    4.5%
  • Lock-In
    No Lock in
  • Min Investment
    ₹ 100
  • Choice Rating

SBI Gilt Fund Growth

  • Returns
    5.8%
  • Lock-In
    No Lock in
  • Min Investment
    ₹ 5000
  • Choice Rating

Aditya Birla Sun Life Government Securities Fund Growth

  • Returns
    4.8%
  • Lock-In
    No Lock in
  • Min Investment
    ₹ 1000
  • Choice Rating

HDFC Gilt Fund - Growth

  • Returns
    5.2%
  • Lock-In
    No Lock in
  • Min Investment
    ₹ 100
  • Choice Rating

DSP Gilt Fund Growth

  • Returns
    5.4%
  • Lock-In
    No Lock in
  • Min Investment
    ₹ 100
  • Choice Rating

You would have got

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Total Investment
₹ 1200
Expected Returns
₹ -13
Total Value
₹ 1187

Past performance doesn’t assure future results; actual outcome may vary due to market dynamics.

Your Investment Amount
  • 1
  • 2
  • 3
  • 4
  • 5
per annum

Understanding Gilt Mutual Funds

How Do Gilt Funds Work?

Gilt Mutual Funds pool investments to purchase government securities issued by central and state governments. These funds mandate at least 80% investment in government bonds. Fund managers analyse economic indicators, interest rate trends, and government fiscal policies to optimise portfolio performance.

The inherent stability of government securities provides investors with a low-risk investment option. This balance between security and potential returns makes gilt funds attractive for conservative investors.

Gilt Mutual Funds FAQs

While extremely low-risk, gilt mutual funds are not entirely risk-free. They are subject to interest rate fluctuations which can impact returns.

The recommended investment duration is 3 to 5 years to maximize returns and mitigate interest rate risks potentially.

Returns come from two primary sources: interest income from government bonds and potential capital appreciation when interest rates fall.

Taxation depends on the holding period: short-term gains are taxed as per income tax slab, while long-term gains enjoy indexation benefits.

Gilt mutual funds have an inverse relationship with interest rates. When rates fall, bond prices typically rise, potentially increasing fund values.

Most gilt mutual funds allow systematic investment plans (SIPs) starting from ₹ 500-@rs 1000 per month.

Unlike other debt funds, gilt funds invest exclusively in government securities, offering higher safety but potentially lower returns.

Gilt mutual funds are best suited for conservative investors seeking stable, low-risk investments with predictable returns.

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