Top Banking Mutual Funds in India (2026)
Banking mutual funds have gained attention as India’s financial sector continues to expand. Bank credit grew 11% year-on-year as of April 2026, while total deposits reached about ₹246.78 lakh cr in October 2025. At the same time, asset quality has improved, with gross NPAs declining to around 2.1% in September 2025. These trends highlight why banking-focused mutual funds remain closely tracked for sector-specific exposure.
Top Banking Mutual Funds in 2026
Showing 1 - 20 of 28 results
last updated at 8:00 AM IST
| NameMFs (28)↓ | ↓Sub CategorySub Category↓ | ↓PlanPlan↓ | ↓AUMAUM↓ | ↓CAGR 3YCAGR 3Y↓ | ↓Expense RatioExpense Ratio↓ | ↓CAGR 5YCAGR 5Y↓ | ↓Absolute Returns - 1YAbsolute Ret. - 1Y↓ | ↓AlphaAlpha↓ | ↓Exit LoadExit Load↓ | ↓NAVNAV↓ | ↓VolatilityVolatility↓ | ↓Tracking ErrorTracking Error↓ | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1. | Nippon India Banking & Financial Services Fund Nippon India Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 6,720.99 6,720.99 | 16.94 16.94 | 0.97 0.97 | 17.37 17.37 | 3.21 3.21 | 2.18 2.18 | 1.00 1.00 | 692.92 692.92 | 15.59 15.59 | 4.00 4.00 | |
| 2. | Invesco India Financial Services Fund Invesco India Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 1,480.45 1,480.45 | 21.15 21.15 | 0.81 0.81 | 17.30 17.30 | 10.18 10.18 | 4.84 4.84 | 1.00 1.00 | 171.28 171.28 | 16.86 16.86 | 5.12 5.12 | |
| 3. | Sundaram Fin Serv Opp Fund Sundaram Fin Serv Opp Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 1,684.47 1,684.47 | 17.75 17.75 | 0.79 0.79 | 16.06 16.06 | 3.96 3.96 | 1.87 1.87 | 0.50 0.50 | 120.10 120.10 | 16.93 16.93 | 5.42 5.42 | |
| 4. | Mirae Asset Banking and Financial Services Fund Mirae Asset Banking and Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 2,272.13 2,272.13 | 17.27 17.27 | 0.61 0.61 | 15.22 15.22 | 7.21 7.21 | 3.61 3.61 | 1.00 1.00 | 22.81 22.81 | 15.18 15.18 | 3.57 3.57 | |
| 5. | SBI Banking & Financial Services Fund SBI Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 10,724.55 10,724.55 | 19.31 19.31 | 0.74 0.74 | 15.02 15.02 | 8.11 8.11 | 2.51 2.51 | 0.50 0.50 | 48.61 48.61 | 15.08 15.08 | 4.24 4.24 | |
| 6. | Tata Banking & Financial Services Fund Tata Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 2,742.60 2,742.60 | 16.40 16.40 | 0.56 0.56 | 14.43 14.43 | 3.29 3.29 | 1.80 1.80 | 0.25 0.25 | 50.45 50.45 | 15.58 15.58 | 4.26 4.26 | |
| 7. | Aditya Birla SL Banking & Financial Services Fund Aditya Birla SL Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 3,154.86 3,154.86 | 15.70 15.70 | 1.00 1.00 | 13.81 13.81 | 4.93 4.93 | 2.92 2.92 | 1.00 1.00 | 69.60 69.60 | 15.99 15.99 | 3.90 3.90 | |
| 8. | UTI Banking and Financial Services Fund UTI Banking and Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 1,213.39 1,213.39 | 15.42 15.42 | 1.08 1.08 | 13.59 13.59 | 3.55 3.55 | 2.34 2.34 | 1.00 1.00 | 216.78 216.78 | 16.01 16.01 | 3.16 3.16 | |
| 9. | Baroda BNP Paribas Banking and Fin Serv Fund Baroda BNP Paribas Banking and Fin Serv Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 345.56 345.56 | 16.30 16.30 | 0.76 0.76 | 13.13 13.13 | 3.16 3.16 | 2.15 2.15 | 1.00 1.00 | 53.65 53.65 | 15.94 15.94 | 3.43 3.43 | |
| 10. | ICICI Pru Banking & Fin Serv Fund ICICI Pru Banking & Fin Serv Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 9,366.76 9,366.76 | 13.42 13.42 | 1.05 1.05 | 13.01 13.01 | -0.39 -0.39 | 0.14 0.14 | 1.00 1.00 | 145.58 145.58 | 14.07 14.07 | 4.06 4.06 | |
| 11. | LIC MF Banking & Financial Services Fund LIC MF Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 239.40 239.40 | 12.02 12.02 | 1.20 1.20 | 12.24 12.24 | 6.26 6.26 | 3.25 3.25 | 1.00 1.00 | 23.88 23.88 | 15.80 15.80 | 4.78 4.78 | |
| 12. | Taurus Banking & Fin Serv Fund Taurus Banking & Fin Serv Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 11.86 11.86 | 11.61 11.61 | 2.49 2.49 | 11.81 11.81 | 0.95 0.95 | 1.30 1.30 | 1.00 1.00 | 59.71 59.71 | 15.14 15.14 | 5.83 5.83 | |
| 13. | ITI Banking & Financial Services Fund ITI Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 321.16 321.16 | 14.79 14.79 | 0.40 0.40 | - - | 7.75 7.75 | 3.50 3.50 | 0.50 0.50 | 16.94 16.94 | 16.25 16.25 | 3.66 3.66 | |
| 14. | HDFC Banking & Financial Services Fund HDFC Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 3,869.94 3,869.94 | 16.09 16.09 | 0.82 0.82 | - - | 6.44 6.44 | 3.34 3.34 | 1.00 1.00 | 18.60 18.60 | 15.85 15.85 | 3.72 3.72 | |
| 15. | Kotak Banking & Financial Services Fund Kotak Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 1,293.28 1,293.28 | 15.38 15.38 | 0.68 0.68 | - - | 6.55 6.55 | 3.54 3.54 | 0.50 0.50 | 16.44 16.44 | 16.50 16.50 | 3.68 3.68 | |
| 16. | Quant BFSI Fund Quant BFSI Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 672.83 672.83 | - - | 0.75 0.75 | - - | 22.50 22.50 | 9.32 9.32 | 1.00 1.00 | 19.79 19.79 | 17.58 17.58 | 10.13 10.13 | |
| 17. | Bandhan Financial Services Fund Bandhan Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 956.25 956.25 | - - | 0.70 0.70 | - - | 2.94 2.94 | 0.57 0.57 | 0.50 0.50 | 15.02 15.02 | 15.70 15.70 | 3.65 3.65 | |
| 18. | Groww Banking & Financial Services Fund Groww Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 57.75 57.75 | - - | 0.41 0.41 | - - | 11.87 11.87 | 5.02 5.02 | 1.00 1.00 | 12.63 12.63 | 16.17 16.17 | 5.58 5.58 | |
| 19. | DSP Banking & Financial Services Fund DSP Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 1,543.06 1,543.06 | - - | 0.63 0.63 | - - | 13.06 13.06 | 5.35 5.35 | 0.50 0.50 | 14.65 14.65 | 16.23 16.23 | 5.26 5.26 | |
| 20. | WOC Banking & Financial Services Fund WOC Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services Sectoral Fund - Banks & Financial Services | Growth Growth | 519.75 519.75 | - - | 0.72 0.72 | - - | 5.68 5.68 | 3.14 3.14 | - - | 12.98 12.98 | 15.87 15.87 | 3.70 3.70 |
Disclaimer: Please note that the above table is for informational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.
Selection criteria: 5Y CAGR: Sorted from highest to lowest, Plan: Growth, Category: Equity, Sub-Category: Sectoral Fund - Banks & Financial Services
Selection criteria: 5Y CAGR: Sorted from highest to lowest, Plan: Growth, Category: Equity, Sub-Category: Sectoral Fund - Banks & Financial Services
What are Banking and Financial Services Mutual Funds?
Banking mutual funds are sectoral mutual funds that invest mainly in banking and financial sector companies. Their portfolios usually include private banks, public sector banks, housing finance companies, NBFCs, and other financial institutions. Since they focus on a single sector, their performance depends largely on how the banking and financial sector performs rather than on the broader market. In India, these funds are generally treated as equity mutual funds if they invest predominantly in stocks. Banking mutual funds offer targeted exposure to the financial sector, but they also carry concentration risk because their portfolios are tied to a single theme.
Overview of the Best Banking and Financial Services Fund
Invesco India Financial Services Fund
Invesco India Financial Services Fund invests in banking and financial services companies, including banks, NBFCs, and insurers. It offers sector-focused exposure, with returns linked to credit growth, interest rates, asset quality, and overall trends in India’s financial system.
Nippon India Banking & Financial Services Fund
Nippon India Banking & Financial Services Fund invests primarily in banks and financial institutions. The portfolio includes private banks, PSU banks, and NBFCs. Fund performance depends on loan growth, interest rate cycles, asset quality, and broader developments in the financial sector.
Sundaram Fin Serv Opp Fund
Sundaram Fin Serv Opp Fund is a thematic equity fund focused on the financial services sector. It invests across banks, NBFCs, insurance companies, and capital market-linked businesses. Returns depend on sector performance, market cycles, regulatory changes, and the fund’s stock selection within the financial ecosystem.
Mirae Asset Banking and Financial Services Fund
Mirae Asset Banking and Financial Services Fund invests in companies within the banking and financial services sector. It provides concentrated exposure to lenders and financial institutions. Performance is influenced by credit demand, asset quality trends, interest rates, and overall sector performance.
SBI Banking & Financial Services Fund
SBI Banking & Financial Services Fund is a sectoral equity scheme investing in banks, NBFCs, and financial companies. It offers focused exposure to India’s financial sector, with returns driven by economic activity, lending growth, regulatory changes, and market sentiment.
How to Invest in Banking Mutual Funds?
Here’s how you can identify and invest in the Banking mutual funds with Tickertape Mutual Fund Screener -
- Launch Tickertape Mutual Fund Screener.
- Select “Banking Mutual Funds” in the category
- Sort out the best Banking mutual funds based on over 50 fundamental and technical filters.
- After identifying the Banking mutual funds in India that align with your investment thesis, click on “Place Order” to invest in the fund.
With Tickertape Mutual Fund Screener, you can invest via ‘lumpsum’ or start a ‘SIP’ in Banking Mutual Funds. Moreover, by connecting your portfolio, you can perform a deep analysis and assess its performance.
Taxation of Banking Mutual Funds
Capital gains tax depends on how long the units are held. The table below summarises the applicable rates for banking mutual funds.
| Holding Period | Tax Treatment |
|---|---|
| Short-Term (12 months) | Gains are taxed at 20%. |
| Long-Term (more than 12 months) | Gains are taxed at 12.5%. The first ₹1.25 lakh of long-term gains in a financial year is exempt. |
Benefits of Investing in Banking Mutual Funds
Credit Growth
Banking mutual funds provide exposure to a sector that continues to see healthy lending growth. RBI’s latest weekly data showed bank credit up 11.0% year-on-year as of 10th April 2026, while IBEF reported bank credit at ₹198.73 lakh cr as of 27th June 2025. That matters because loan growth remains a key earnings driver for banks and financial companies.
Deposit Base
The sector continues to benefit from a large and expanding deposit base. IBEF reported that bank deposits grew by 9.75% YoY to ₹246.78 lakh cr as of 31st October 2025. A broad deposit franchise supports lending capacity, balance-sheet strength, and funding stability across banks.
Digital Shift
Banking funds also capture the ongoing formalisation of financial services. IBEF notes that India has the third-largest fintech ecosystem globally, and BCG expects digital payments to account for 65% of the market by 2026. This shift supports transaction growth, customer acquisition, and efficiency across the banking and financial system.
Cleaner Balance Sheets
Asset quality has improved materially. Reuters, citing RBI’s Trend and Progress of Banking report, said Indian banks’ gross NPA ratio fell to 2.1% at the end of September 2025 from 2.2% in March 2025, a multi-decade low. Lower bad-loan levels can support profitability and reduce credit-cost pressure.
Large, Liquid Sector
Banking mutual funds provide access to one of the market’s most liquid sectors. The Nifty Bank Index tracks the largest and most liquid Indian banking stocks and has a maximum of 14 constituents, making it a widely followed benchmark for banking exposure.
Risks of Investing in Banking Mutual Funds
Sector Concentration
Banking mutual funds are sector-specific funds, so their performance depends heavily on a single market segment. AMFI scheme documents describe these as open-ended equity schemes that invest in the banking and financial services sector, making them more concentrated than diversified equity funds.
Rate Sensitivity
Banks are closely tied to interest-rate cycles. Changes in policy rates can affect loan growth, deposit costs, treasury income, and net interest margins. That means banking funds can react sharply to RBI policy moves and changes in liquidity conditions. This is an inference based on RBI and IBEF reports that link banks’ earnings to credit and deposit dynamics.
Asset-Quality Risk
Even though bad-loan ratios are low, credit stress can still return if economic conditions weaken. RBI stress-test commentary reported by Reuters said the aggregate GNPA ratio of 46 banks was 2.3% in March 2025 and could rise under adverse scenarios, showing that asset quality remains a key sector risk.
Deposit Pressure
Analysts expect credit growth to continue outpacing deposit growth in FY27. Reuters-cited market reports forecast 12-14% credit growth versus 10-12% deposit growth, which could keep funding conditions tight and put pressure on margins or the quality of growth.
Limited Stock Basket
Banking indices are relatively narrow. The Nifty Bank Index has a maximum of 14 stocks, while the Nifty PSU Bank Index has 12 constituents. This means a few large banks can materially influence performance, which increases concentration risk within the theme.
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Factors to Consider Before Investing in Banking Mutual Funds
Fund Universe
Banking mutual funds may differ in their portfolio composition. Some schemes focus mainly on banks, while others may include NBFCs, housing finance companies, insurers, and other financial services businesses. This mix can influence the fund’s overall risk and return profile.
Credit Cycle
The banking and financial services sector is closely linked to trends such as loan growth, deposit growth, and funding conditions. Strong sector momentum may support performance, but the balance between credit growth and deposit growth remains an important indicator for liquidity and earnings quality.
Asset Quality
The bad-loan trend remains an important factor in this category. Banks’ GNPA ratio stood at 2.1% in September 2025, reflecting an improvement in balance sheets. Even so, stress in areas such as retail, MSME, or unsecured lending can still affect the sector.
Valuation Mix
Large private banks, PSU banks, and other financial companies may perform differently within the same market cycle. A fund with a heavy tilt toward one segment may behave differently from a broader banking and financial services fund, making portfolio composition an important aspect of evaluation.
Risk Tolerance
Banking mutual funds are sectoral equity funds rather than diversified core funds. Their performance can be more volatile and closely tied to sector-specific developments. Scheme documents from AMFI-linked disclosures also state that there is no assurance that the scheme's investment objective will be achieved.
Conclusion
Banking mutual funds provide focused exposure to banks and financial institutions, with performance linked to credit growth, interest rates, and sector conditions. Since these funds are concentrated and can be sensitive to economic cycles, understanding their role in a portfolio is important. To compare banking mutual funds and evaluate key metrics such as returns, risk, expense ratio, and portfolio composition, investors can use the Tickertape Mutual Fund Screener, which offers multiple filters to analyse and compare schemes in one place.
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Frequently Asked Questions About Banking Mutual Funds
What is a mutual fund in a bank?
A bank sector mutual fund typically refers to a mutual fund scheme that invests primarily in banking and financial services companies, such as private banks, PSU banks, NBFCs, housing finance companies, and insurers. These are sectoral equity funds, so their performance depends largely on how the banking and financial sector performs.How to buy a banking mutual fund?
Here’s how you can invest in Banking Mutual Funds,
- Launch Tickertape Mutual Fund Screener.
- Select the Banking Mutual Funds that aligns with your investment goals.
- Click on “Place Order” and select the option “SIP” or "Lumpsum". Enter the amount and confirm “OK”
Your order will be placed.Why should I invest in a bank fund?
A bank fund can offer focused exposure to one of the largest sectors in the Indian market. Some investors track this category to participate in trends such as credit growth, improving asset quality, digital banking adoption, and financialisation. Disclaimer: This is for educational purposes only and not a recommendation. Banking mutual funds are sectoral funds and can be volatile. Investors should assess their financial goals, risk appetite, and investment horizon before investing, and consult a financial advisor if needed.Are bank mutual funds a safe investment?
Bank mutual funds are not risk-free. They invest in the equities of banking and financial companies, so returns can fluctuate with interest rates, credit conditions, regulation, and market sentiment. They may be less diversified than broad equity funds because they are tied to one sector. Disclaimer:This is for educational purposes only and not a recommendation. Safety depends on the investor’s risk tolerance, time horizon, and overall portfolio mix. Banking mutual funds may not be suitable for every investor.Are bank mutual funds good for beginners?
Bank mutual funds may be easier to understand than some niche themes because banks and financial companies are familiar businesses, but they are still sectoral funds. Since they are concentrated in a single market segment, they can be more volatile than diversified equity mutual funds. Disclaimer: This is for educational purposes only and not a recommendation. Beginners should understand the risks of sector concentration and evaluate whether a banking fund fits their financial goals and risk appetite before investing.How are bank mutual funds taxed in India?
Banking or financial mutual funds are generally taxed as equity-oriented mutual funds in India, provided they meet the required equity exposure rules. If units are sold within 12 months, gains are taxed as short-term capital gains at 20%. If units are sold after 12 months, gains are taxed as long-term capital gains at 12.5%, with the first ₹1.25 lakh of long-term gains in a financial year exempt. STT also applies on redemption of equity-oriented mutual funds.
