Best banking & PSU mutual funds to invest in July 2026

Banking and PSU debt funds offer relatively safe investment options for a few years. These schemes invest in government-backed entities, reducing credit risk significantly. While interest rate changes can affect returns, these funds are better positioned due to shorter durations. Investors can consider schemes like Bandhan Banking & PSU Debt Fund and Axis Banking & PSU Debt Fund. Past performance indicates varied quartile rankings for these recommended funds.