What is corporate bond funds?

A corporate bond fund is an open-ended debt mutual fund that invests at least 80% of its assets in corporate bonds rated AA+ or higher. These funds generate returns mainly through interest income and changes in bond prices.

Which corporate bond fund is best?

Investors comparing the best corporate bond funds can assess factors such as 5-year CAGR, credit quality, portfolio duration, expense ratio and consistency of returns. Some commonly tracked schemes, based on 5Y CAGR, include: Nippon India Corporate Bond Fund Axis Corp Bond Fund ICICI Pru Corp Bond Fund Franklin India Corp Debt Fund-A Kotak Corporate Bond Fund Disclaimer : Please note that the corporate bond funds list is for educational purposes only, and is not recommendatory.

How do corporate bond funds work?

Corporate bond funds pool money from investors and invest it across high-rated corporate bonds and debentures. Returns come from coupon income and bond price movements influenced by interest rates, credit spreads and issuer quality.

Are corporate bond funds a safe investment?

A corporate debt fund generally carries lower credit risk than debt funds investing in lower-rated securities. However, corporate bond funds in India can still be affected by interest-rate changes, credit downgrades and liquidity conditions. Disclaimer : Please note that this information is for educational purposes only, and is not recommendatory.

Are corporate bond funds suitable for beginners?

Investors new to debt funds can study bond fund meaning, portfolio credit quality and interest-rate sensitivity before considering the category. Unlike fixed deposits, corporate bond fund returns are market-linked and are not guaranteed. Disclaimer : Please note that this information is for educational purposes only, and is not recommendatory.

How are corporate bond funds taxed in India?

The taxation of corporate bond funds depends on prevailing debt mutual fund tax rules and the purchase date of the units. Investors should check the latest capital-gains provisions applicable to their investments.

Is There Any SBI Corporate Bond Fund?

Yes, SBI Corporate Bond Fund invests primarily in high-rated corporate bonds in India, in line with the category mandate. Investors comparing it with schemes such as HDFC Corporate Bond Fund can review duration, credit quality and costs. Disclaimer: This is for educational purposes only and not a recommendation. Fund suitability depends on individual financial goals, risk tolerance, and investment horizon.

List of the Best Corporate Bond Funds in India (2026)

Corporate bond funds invest at least 80% of their assets in AA+ and above-rated corporate bonds. As of August 2026, the category managed about ₹1.74 lakh cr in assets across 21 schemes. Interest-rate movements, bond yields, credit spreads and issuer quality continue to influence returns. Here, we cover some of the best corporate bond funds in India, along with their returns, risks and key factors to consider.

Top Corporate Bond Funds in 2026

Corporate Bond Fund Screener (2026)

Here's the list of Top Corporate Bond Funds in India (2026)

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Showing 1 - 20 of 21 results

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	NameMFs (21)↓	↓Sub CategorySub Category↓	↓PlanPlan↓	↓AUMAUM↓	↓CAGR 3YCAGR 3Y↓	↓Base Exp. RatioBase Exp. Ratio↓	↓CAGR 5YCAGR 5Y↓	↓Absolute Returns - 1YAbsolute Ret. - 1Y↓	↓AlphaAlpha↓	↓NAVNAV↓	↓Exit LoadExit Load↓	↓VolatilityVolatility↓	↓Tracking ErrorTracking Error↓
1.	Franklin India Corporate Bond Fund-A Franklin India Corporate Bond Fund-A	Corporate Bond Fund Corporate Bond Fund	Growth Growth	1,408.69 1,408.69	7.80 7.80	0.21 0.21	6.72 6.72	5.32 5.32	0.63 0.63	116.37 116.37	- -	1.01 1.01	3.12 3.12
2.	Axis Corp Bond Fund Axis Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	7,768.14 7,768.14	7.44 7.44	0.30 0.30	6.67 6.67	4.31 4.31	0.22 0.22	19.33 19.33	- -	1.34 1.34	2.64 2.64
3.	Nippon India Corp Bond Fund Nippon India Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	8,907.20 8,907.20	7.28 7.28	0.31 0.31	6.65 6.65	4.02 4.02	0.30 0.30	67.03 67.03	- -	1.37 1.37	2.78 2.78
4.	ICICI Pru Corp Bond Fund ICICI Pru Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	28,384.90 28,384.90	7.00 7.00	0.32 0.32	6.57 6.57	4.18 4.18	0.44 0.44	33.35 33.35	- -	1.40 1.40	2.65 2.65
5.	Kotak Corporate Bond Fund Kotak Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	15,095.14 15,095.14	7.11 7.11	0.31 0.31	6.31 6.31	3.84 3.84	0.26 0.26	4,190.39 4,190.39	- -	1.37 1.37	2.80 2.80
6.	UTI Corporate Bond Fund UTI Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	4,569.09 4,569.09	7.06 7.06	0.27 0.27	6.23 6.23	4.06 4.06	0.32 0.32	17.85 17.85	- -	1.30 1.30	2.79 2.79
7.	Baroda BNP Paribas Corp Bond Fund Baroda BNP Paribas Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	269.15 269.15	7.62 7.62	0.18 0.18	6.22 6.22	4.83 4.83	0.58 0.58	31.37 31.37	- -	1.30 1.30	2.89 2.89
8.	Aditya Birla SL Corp Bond Fund Aditya Birla SL Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	22,721.59 22,721.59	6.75 6.75	0.28 0.28	6.20 6.20	3.27 3.27	0.27 0.27	120.97 120.97	- -	1.82 1.82	2.31 2.31
9.	SBI Corp Bond Fund SBI Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	21,803.13 21,803.13	6.99 6.99	0.31 0.31	6.20 6.20	3.84 3.84	0.20 0.20	16.98 16.98	- -	1.30 1.30	2.77 2.77
10.	PGIM India Corp Bond Fund PGIM India Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	84.44 84.44	6.86 6.86	0.31 0.31	6.19 6.19	3.49 3.49	0.15 0.15	50.96 50.96	- -	1.44 1.44	2.69 2.69
11.	Bandhan Corp Bond Fund Bandhan Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	13,511.50 13,511.50	7.00 7.00	0.30 0.30	6.09 6.09	4.87 4.87	0.55 0.55	21.20 21.20	- -	1.25 1.25	2.90 2.90
12.	DSP Corp Bond Fund DSP Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	2,816.26 2,816.26	7.40 7.40	0.25 0.25	6.08 6.08	5.71 5.71	0.64 0.64	17.58 17.58	- -	0.58 0.58	3.38 3.38
13.	HSBC Corporate Bond Fund HSBC Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	6,058.07 6,058.07	7.18 7.18	0.28 0.28	6.02 6.02	4.02 4.02	0.24 0.24	83.06 83.06	- -	1.29 1.29	2.94 2.94
14.	HDFC Corp Bond Fund HDFC Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	29,478.92 29,478.92	6.60 6.60	0.32 0.32	6.02 6.02	2.83 2.83	0.03 0.03	34.93 34.93	- -	1.75 1.75	2.46 2.46
15.	Invesco India Corporate Bond Fund Invesco India Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	3,477.81 3,477.81	6.83 6.83	0.24 0.24	5.99 5.99	3.30 3.30	0.14 0.14	3,598.84 3,598.84	- -	1.52 1.52	2.52 2.52
16.	Sundaram Corp Bond Fund Sundaram Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	618.89 618.89	6.82 6.82	0.27 0.27	5.99 5.99	3.64 3.64	0.13 0.13	44.03 44.03	- -	1.27 1.27	2.82 2.82
17.	Mirae Asset Corp Bond Fund Mirae Asset Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	43.92 43.92	6.92 6.92	0.23 0.23	5.97 5.97	3.90 3.90	0.32 0.32	13.81 13.81	- -	1.38 1.38	2.63 2.63
18.	Canara Rob Corp Bond Fund Canara Rob Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	103.56 103.56	6.50 6.50	0.31 0.31	5.79 5.79	3.71 3.71	0.12 0.12	24.61 24.61	- -	1.06 1.06	2.87 2.87
19.	Union Corporate Bond Fund Union Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	284.04 284.04	6.63 6.63	0.34 0.34	5.69 5.69	2.86 2.86	-0.04 -0.04	16.44 16.44	- -	1.57 1.57	2.58 2.58
20.	Tata Corp Bond Fund Tata Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	2,675.73 2,675.73	7.03 7.03	0.26 0.26	- -	3.93 3.93	0.32 0.32	13.40 13.40	- -	1.43 1.43	2.68 2.68

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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: Debt, Sub-Category: Corporate Bond Fund

What is Corporate Bond Fund in India

Corporate bond funds are open-ended debt mutual funds that invest a minimum of 80% of their assets in the highest-rated corporate bonds, typically those carrying an AA+ or AAA credit rating. These funds focus on debt instruments issued by companies rather than the government, aiming to deliver relatively stable returns with lower interest rate risk. Because they focus on top-rated issuers, they carry lower credit risk than many other debt fund categories, making them a common option for investors seeking steady income over the short- to medium-term.

Overview of the Best Corporate Bond Mutual Funds

Nippon India Corp Bond Fund

An open-ended debt fund from Nippon India Mutual Fund that mainly invests in high-rated corporate bonds. The fund aims to generate returns while maintaining liquidity. The portfolio focuses on credit quality, with most investments in AA+ and AAA-rated instruments issued by established Indian companies.

Axis Corp Bond Fund

Axis Corporate Bond Fund aims to generate income and capital appreciation by investing in high-quality corporate debt securities. The fund follows a structured approach to credit quality and keeps most of its investments in highly rated bonds. This helps balance potential returns with overall portfolio stability.

ICICI Pru Corp Bond Fund

An open-ended debt scheme from ICICI Prudential Mutual Fund that invests mainly in AA+ and above-rated corporate bonds. The fund focuses on generating regular income through accrual while managing interest rate exposure. The portfolio is designed to maintain a balance between yield and credit quality.

Franklin India Corp Debt Fund-A

A corporate debt fund from Franklin Templeton Mutual Fund that invests in high-quality corporate bonds and debentures. The fund aims to generate income through a portfolio of investment-grade fixed income instruments. It also focuses on maintaining credit quality and adjusting the portfolio based on interest rate conditions.

Kotak Corporate Bond Fund

An open-ended debt scheme from Kotak Mahindra Mutual Fund that mainly invests in AA+ and AAA-rated corporate bonds. The fund focuses on generating regular income while maintaining a high-quality portfolio. It aims to provide steady returns through exposure to the corporate bond market over a short to medium period.

How to Invest in Best Corporate Bond Funds in India ?

Here's how you can identify and invest in the best corporate bond funds in India with Tickertape Mutual Fund Screener -

Launch Tickertape Mutual Fund Screener.
Select "Debt Fund - Corporate Bond" in the category.
Sort out the best corporate bond funds based on over 50 fundamental and technical filters.
After identifying the corporate bond 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 Corporate Bond Funds. Moreover, by connecting your portfolio, you can do a deep analysis of your portfolio and assess its performance.

Taxation of Corporate Bond Funds

The table below summarises the applicable rates for corporate bond funds.

Holding Period	Tax Treatment
Any period	Gains taxed as STCG as per income tax slab

Benefits of Investing in Corporate Bond Funds

High Credit Quality

Corporate bond funds must invest at least 80% of assets in AA+ and above-rated corporate bonds. SBI Corporate Bond Fund’s March 2026 portfolio included several AAA-rated issuers, reducing exposure to lower-rated debt within the category.

Income Potential

Corporate bond funds earn mainly through coupon income and bond-price movements. HDFC Corporate Bond Fund reported a portfolio YTM of 7.58% in April 2026, indicating the yield available across its underlying debt holdings.

Portfolio Diversification

These funds spread investments across multiple issuers and debt instruments instead of relying on a single corporate borrower. ICICI Prudential Corporate Bond Fund managed ₹32,682 cr in April 2026 across corporate bonds, government securities and liquidity instruments.

Lower Credit Exposure

Compared with credit-risk funds, corporate bond funds focus on highly rated issuers. Aditya Birla Sun Life Corporate Bond Fund specifically invests predominantly in AA+ and above securities and carried an ICRA AAAmfs rating in July 2026.

No Exit Load

Several leading corporate bond schemes do not charge an exit load. HDFC Corporate Bond Fund and Kotak Corporate Bond Fund both reported nil exit loads in 2026, allowing redemptions without an additional scheme-level withdrawal charge.

Risks of Investing in Corporate Bond Funds

Interest Rate Risk

Bond prices generally fall when market yields rise. HDFC Corporate Bond Fund had a modified duration of 4.14 years in April 2026, making its NAV more sensitive to interest-rate changes than shorter-duration debt portfolios.

Credit Risk

High ratings do not eliminate default or downgrade risk. Corporate bond funds remain exposed to issuers’ financial health, and weaker credit conditions can widen spreads or reduce bond prices even when portfolios are concentrated in AA+ securities.

Duration Risk

Duration differs considerably across schemes. Kotak Corporate Bond Fund had a modified duration of 2.69 years in August 2026, while HDFC Corporate Bond Fund reported 4.14 years in April, resulting in different sensitivity to yield movements.

Liquidity Risk

Corporate bonds do not always trade as frequently as government securities. During stressed markets, funds may face wider bid-ask spreads or difficulty selling certain bonds quickly, which can affect portfolio valuation and redemption management.

Return Variability

Corporate bond fund returns are not fixed like bank deposits. ICICI Prudential Corporate Bond Fund delivered 6.01% over one year and 7.39% CAGR over three years to March 2026, showing returns vary across periods.

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Who Should Consider Corporate Bond Mutual Funds?

Conservative Fixed Income Investors

Investors who want exposure to debt markets without taking on significant credit risk may find corporate bond funds suitable. The high-rated mandate of these funds provides a level of capital safety that is more predictable than credit risk funds or balanced advantage funds.

Short to Medium-Term Investors

These funds are best suited for investors with an investment horizon of one to three years. Over this period, the accrual income from high-rated corporate bonds can compound meaningfully, while the impact of short-term rate fluctuations tends to reduce over time. Investors Seeking Better Returns Than Bank Deposits Corporate bond funds typically offer yields that are higher than savings accounts and often competitive with fixed deposits, with the added benefit of liquidity. Investors looking to optimise returns on surplus cash over a fixed term may consider these funds as an alternative to traditional bank deposit products.

Portfolio Diversifiers

Investors holding predominantly equity portfolios may consider corporate bond funds to bring stability and reduce overall portfolio volatility. The low correlation of high-rated bond returns with equity market movements makes them a useful diversification tool within a larger investment portfolio.

Factors to Consider Before Investing in Corporate Bond Funds

Credit Profile

Investors should examine how much of the portfolio sits in AAA, AA+ and sovereign securities. In September 2026, the ICICI Prudential Corporate Bond Fund held about 72% in AAA-rated debt and 19% in sovereign securities.

Portfolio Duration

Modified duration indicates how strongly a fund may respond to interest-rate changes. SBI Corporate Bond Fund reported 2.84 years in March 2026, while HDFC Corporate Bond Fund reported 4.14 years in April.

Yield Levels

YTM indicates the portfolio’s current yield before expenses and future market changes. Kotak Corporate Bond Fund reported 7.77% annualised YTM in August 2026, compared with 7.58% for HDFC in April.

Interest Rate Cycle

Corporate bond valuations are influenced by RBI policy, government bond yields and market expectations around inflation and liquidity. Changes in these variables affect both benchmark yields and credit spreads across high-rated corporate debt.

Fund Costs

Expense ratios reduce investor returns over time. Aditya Birla Sun Life Corporate Bond Fund reported base expense ratios of 0.44% regular and 0.28% direct in July 2026, showing plan choice affects annual costs.

Fund Size

Larger funds may have broader portfolios but also need to deploy substantial capital efficiently. ICICI Prudential Corporate Bond Fund managed ₹32,682 cr in April 2026, while Kotak managed about ₹15,095 cr in August.

Conclusion

Corporate bond funds offer a focused way to participate in India's fixed income market through the highest-rated corporate debt instruments. Their mandate to invest at least 80% in AA+ or higher-rated bonds balances yield enhancement over government securities with credit risk control. Understanding factors such as corporate bond interest rates, interest rate sensitivity, modified duration, credit quality, and expense ratios helps investors assess whether these funds align with their income goals and risk appetite. Investors can use the Tickertape Mutual Fund Screener to study each corporate bond fund in detail, compare portfolios, review credit quality distribution, and analyse past performance to support their research and decision-making.

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Frequently Asked Questions About Corporate Bond Funds

What is corporate bond funds?
A corporate bond fund is an open-ended debt mutual fund that invests at least 80% of its assets in corporate bonds rated AA+ or higher. These funds generate returns mainly through interest income and changes in bond prices.
Which corporate bond fund is best?
Investors comparing the best corporate bond funds can assess factors such as 5-year CAGR, credit quality, portfolio duration, expense ratio and consistency of returns. Some commonly tracked schemes, based on 5Y CAGR, include:
1. Nippon India Corporate Bond Fund
2. Axis Corp Bond Fund
3. ICICI Pru Corp Bond Fund
4. Franklin India Corp Debt Fund-A
5. Kotak Corporate Bond Fund
Disclaimer: Please note that the corporate bond funds list is for educational purposes only, and is not recommendatory.
How do corporate bond funds work?
Corporate bond funds pool money from investors and invest it across high-rated corporate bonds and debentures. Returns come from coupon income and bond price movements influenced by interest rates, credit spreads and issuer quality.
Are corporate bond funds a safe investment?
A corporate debt fund generally carries lower credit risk than debt funds investing in lower-rated securities. However, corporate bond funds in India can still be affected by interest-rate changes, credit downgrades and liquidity conditions.

Disclaimer: Please note that this information is for educational purposes only, and is not recommendatory.
Are corporate bond funds suitable for beginners?
Investors new to debt funds can study bond fund meaning, portfolio credit quality and interest-rate sensitivity before considering the category. Unlike fixed deposits, corporate bond fund returns are market-linked and are not guaranteed.

Disclaimer: Please note that this information is for educational purposes only, and is not recommendatory.
How are corporate bond funds taxed in India?
The taxation of corporate bond funds depends on prevailing debt mutual fund tax rules and the purchase date of the units. Investors should check the latest capital-gains provisions applicable to their investments.
Is There Any SBI Corporate Bond Fund?
Yes, SBI Corporate Bond Fund invests primarily in high-rated corporate bonds in India, in line with the category mandate. Investors comparing it with schemes such as HDFC Corporate Bond Fund can review duration, credit quality and costs.

Disclaimer: This is for educational purposes only and not a recommendation. Fund suitability depends on individual financial goals, risk tolerance, and investment horizon.