What are corporate bond funds?

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 AA+ or AAA-rated instruments. They aim to generate steady income through coupon accrual from debt issued by creditworthy companies, with lower credit risk than most other debt fund categories.

Which corporate bond fund is best?

As of 21st April 2025, some of the top corporate bond funds in India based on 5Y CAGR include: Nippon India Corp 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?

These funds pool capital from investors and deploy it into a portfolio of high-rated corporate bonds and debentures. Returns are generated primarily through interest income accrued on the bonds held. The NAV of the fund moves with changes in bond prices, which are in turn affected by interest rate movements and credit quality changes of the issuers.

Are corporate bond funds a safe investment?

Corporate bond funds are considered relatively lower risk within the debt mutual fund universe due to their high credit quality mandate. However, they are not risk-free. Interest rate movements can affect NAV in the short term, and even highly rated issuers can face credit events. Investors should assess these risks relative to their own risk tolerance and investment horizon. Disclaimer : Please note that this information is for educational purposes only, and is not recommendatory.

Are corporate bond funds suitable for beginners?

Corporate bond funds can be a reasonable starting point for investors new to debt mutual funds, given their high credit quality focus and relative return stability. However, beginners should understand that NAV can fluctuate with interest rate changes and that returns are not guaranteed the way bank fixed deposits are. Disclaimer : Please note that this information is for educational purposes only, and is not recommendatory.

How are corporate bond funds taxed in India?

Corporate bond funds are taxed as debt mutual funds. Gains from units held for less than 24 months are treated as Short-Term Capital Gains (STCG) and taxed at the investor's applicable income tax slab rate. Gains from units held for 24 months or more are treated as Long-Term Capital Gains (LTCG) and taxed at 12.50% without the benefit of indexation.

Is There Any SBI Corporate Bond Fund?

Yes, the SBI Corporate Bond Fund is one of the schemes available in the corporate bond fund category. It primarily invests in high-rated corporate debt instruments, typically with a focus on AAA-rated securities, as per category norms. Like other corporate bond funds, its performance can be influenced by interest rate movements and changes in credit conditions. 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 are debt mutual funds that invest at least 80% of their assets in the highest-rated corporate bonds, offering relatively stable returns with lower credit risk compared to other debt categories. As Indian corporates continue to tap the bond market for growth capital and the RBI maintains a supportive rate environment, these funds have gained renewed attention from investors seeking predictable income with better yields than traditional savings instruments. Here we will be covering the best corporate bond funds in India.

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

last updated at 11:00 PM IST

	NameMFs (21)↓	↓Sub CategorySub Category↓	↓PlanPlan↓	↓AUMAUM↓	↓CAGR 3YCAGR 3Y↓	↓Expense RatioExpense Ratio↓	↓CAGR 5YCAGR 5Y↓	↓Absolute Returns - 1YAbsolute Ret. - 1Y↓	↓AlphaAlpha↓	↓NAVNAV↓	↓Exit LoadExit Load↓	↓VolatilityVolatility↓	↓Tracking ErrorTracking Error↓
1.	Nippon India Corp Bond Fund Nippon India Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	8,354.21 8,354.21	7.51 7.51	0.36 0.36	6.74 6.74	4.82 4.82	0.64 0.64	65.48 65.48	- -	1.28 1.28	2.66 2.66
2.	ICICI Pru Corp Bond Fund ICICI Pru Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	30,212.18 30,212.18	7.55 7.55	0.36 0.36	6.68 6.68	5.51 5.51	0.86 0.86	32.66 32.66	- -	1.09 1.09	2.71 2.71
3.	Axis Corp Bond Fund Axis Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	8,142.09 8,142.09	7.66 7.66	0.35 0.35	6.66 6.66	5.35 5.35	0.64 0.64	18.87 18.87	- -	1.23 1.23	2.52 2.52
4.	Franklin India Corp Debt Fund-A Franklin India Corp Debt Fund-A	Corporate Bond Fund Corporate Bond Fund	Growth Growth	1,254.61 1,254.61	7.99 7.99	0.25 0.25	6.64 6.64	6.36 6.36	1.16 1.16	113.44 113.44	- -	1.13 1.13	2.87 2.87
5.	Kotak Corporate Bond Fund Kotak Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	15,220.94 15,220.94	7.40 7.40	0.37 0.37	6.42 6.42	4.94 4.94	0.71 0.71	4,099.87 4,099.87	- -	1.25 1.25	2.72 2.72
6.	Aditya Birla SL Corp Bond Fund Aditya Birla SL Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	25,104.95 25,104.95	7.19 7.19	0.33 0.33	6.30 6.30	3.97 3.97	0.54 0.54	118.67 118.67	- -	1.65 1.65	2.23 2.23
7.	PGIM India Corp Bond Fund PGIM India Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	81.41 81.41	7.18 7.18	0.23 0.23	6.29 6.29	4.71 4.71	0.62 0.62	49.92 49.92	- -	1.38 1.38	2.63 2.63
8.	HDFC Corp Bond Fund HDFC Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	31,028.83 31,028.83	7.17 7.17	0.36 0.36	6.23 6.23	3.98 3.98	0.47 0.47	34.34 34.34	- -	1.54 1.54	2.44 2.44
9.	UTI Corporate Bond Fund UTI Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	5,037.41 5,037.41	7.28 7.28	0.26 0.26	6.22 6.22	4.92 4.92	0.66 0.66	17.44 17.44	- -	1.21 1.21	2.67 2.67
10.	HSBC Corporate Bond Fund HSBC Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	5,979.02 5,979.02	7.14 7.14	0.31 0.31	6.18 6.18	5.25 5.25	0.71 0.71	81.11 81.11	- -	1.27 1.27	2.94 2.94
11.	SBI Corp Bond Fund SBI Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	22,518.50 22,518.50	7.22 7.22	0.36 0.36	6.17 6.17	4.69 4.69	0.57 0.57	16.60 16.60	- -	1.28 1.28	2.61 2.61
12.	Invesco India Corporate Bond Fund Invesco India Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	4,883.96 4,883.96	7.14 7.14	0.28 0.28	6.01 6.01	4.37 4.37	0.53 0.53	3,528.35 3,528.35	- -	1.38 1.38	2.48 2.48
13.	Baroda BNP Paribas Corp Bond Fund Baroda BNP Paribas Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	273.50 273.50	7.51 7.51	0.20 0.20	6.00 6.00	5.38 5.38	0.82 0.82	30.46 30.46	- -	1.27 1.27	2.75 2.75
14.	Bandhan Corp Bond Fund Bandhan Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	13,955.78 13,955.78	7.23 7.23	0.33 0.33	6.00 6.00	5.08 5.08	0.70 0.70	20.62 20.62	- -	1.12 1.12	2.71 2.71
15.	Sundaram Corp Bond Fund Sundaram Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	598.83 598.83	6.97 6.97	0.32 0.32	5.95 5.95	4.52 4.52	0.49 0.49	43.07 43.07	- -	1.20 1.20	2.73 2.73
16.	Mirae Asset Corp Bond Fund Mirae Asset Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	47.01 47.01	6.96 6.96	0.17 0.17	5.90 5.90	4.30 4.30	0.43 0.43	13.48 13.48	- -	1.23 1.23	2.61 2.61
17.	DSP Corp Bond Fund DSP Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	2,974.64 2,974.64	7.25 7.25	0.29 0.29	5.80 5.80	6.18 6.18	0.96 0.96	17.05 17.05	- -	0.70 0.70	3.15 3.15
18.	Canara Rob Corp Bond Fund Canara Rob Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	108.53 108.53	6.74 6.74	0.44 0.44	5.77 5.77	4.17 4.17	0.35 0.35	24.11 24.11	- -	1.07 1.07	2.68 2.68
19.	Union Corporate Bond Fund Union Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	545.79 545.79	6.95 6.95	0.41 0.41	5.76 5.76	4.29 4.29	0.47 0.47	16.16 16.16	- -	1.40 1.40	2.61 2.61
20.	Tata Corp Bond Fund Tata Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	3,115.62 3,115.62	7.29 7.29	0.31 0.31	- -	4.30 4.30	0.53 0.53	13.10 13.10	- -	1.35 1.35	2.51 2.51

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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 are Corporate Bond Mutual Funds 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 concentrate on top-rated issuers, they carry lower credit risk compared to many other debt fund categories, making them a commonly considered 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 Portfolio

Corporate bond funds invest at least 80% of their assets in the highest-rated bonds, usually AA+ or AAA. This ensures that the portfolio mainly holds debt issued by financially strong companies. As a result, the chances of losses due to defaults remain relatively lower.

Better Yields Than Government Securities

Top-rated corporate bonds generally offer higher yields than government securities with similar maturity. Corporate bond funds help investors access this additional yield without taking on significantly higher credit risk, making them different from pure gilt or liquid funds at similar risk levels.

Relatively Stable Returns

These funds earn most of their returns through interest income from high-rated bonds instead of relying on active interest rate calls. This approach can lead to more consistent return patterns compared to dynamic bond funds or credit risk funds, especially over a defined investment period. Lower Credit Risk Compared to Other Debt Funds Corporate bond funds focus only on high-rated issuers and avoid lower-rated bonds. This reduces the chances of credit downgrades or defaults affecting the portfolio, which helps in maintaining overall portfolio quality.

Diversification Within Fixed Income

These funds invest across different companies, sectors, and maturities within the high-rated bond universe. This spread across multiple issuers helps reduce concentration risk compared to investing in a single corporate bond or a fixed deposit from one institution.

Risks of Investing in Corporate Bond Funds

Interest Rate Risk

Corporate bond fund returns are sensitive to changes in interest rates. When rates rise, bond prices fall, which can result in negative or lower-than-expected returns, particularly for funds with a longer average maturity. Investors exiting during a rate-rising cycle may not achieve the expected yield.

Credit Risk

Although these funds invest in high-rated bonds, credit risk is not entirely eliminated. A rating downgrade of an issuer from AA+ to a lower category can affect the fund's NAV. Fund managers need to actively monitor issuer quality to avoid such scenarios within the portfolio.

Liquidity Risk

Corporate bonds, even high-rated ones, can become illiquid during periods of market stress. If a fund faces large redemptions while bond markets are thin, it may have to sell holdings at a discount, temporarily impacting NAV and returns for remaining investors.

Concentration Risk

Some corporate bond funds may have meaningful exposure to a small number of issuers or sectors. If any of these issuers face credit stress, the impact on the fund's portfolio can be disproportionately large despite the overall high-rating mandate.

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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 Quality of the Portfolio

Review the fund's credit quality distribution. A portfolio dominated by AAA-rated instruments carries lower risk than one leaning towards AA or AA- securities. Checking the issuer list and credit ratings in the fund's factsheet helps assess the true quality of the portfolio.

Modified Duration and Interest Rate Sensitivity

Modified duration measures how much a bond fund's price changes with interest rate movements. A higher duration means greater sensitivity to rate changes. In a rising-rate environment, shorter-duration corporate bond funds tend to be more resilient, while longer-duration funds may underperform.

Investment Horizon

Corporate bond funds are generally suited for an investment horizon of one to three years. Holding for a shorter period increases the risk of exiting during a temporary NAV dip caused by rate movements. Aligning the investment horizon with the fund's average maturity improves return predictability.

Expense Ratio

The expense ratio directly reduces the net yield delivered to investors. Since corporate bond fund returns are primarily driven by bond coupon accrual rather than capital gains, a higher expense ratio can meaningfully eat into the effective yield. Comparing expense ratios across similar funds is an important step before investing. Fund House Track Record in Debt Management Debt fund management requires disciplined credit assessment and interest rate positioning. Evaluating the fund house's historical performance across interest rate cycles, its approach to credit risk, and any past instances of credit defaults in its debt portfolios helps gauge the quality of portfolio management.

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 above-rated bonds provides a balance of yield enhancement over government securities while keeping credit risk in check. Understanding factors such as 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 are corporate bond funds?
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 AA+ or AAA-rated instruments. They aim to generate steady income through coupon accrual from debt issued by creditworthy companies, with lower credit risk than most other debt fund categories.
Which corporate bond fund is best?
As of 21st April 2025, some of the top corporate bond funds in India based on 5Y CAGR include: Nippon India Corp 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?
These funds pool capital from investors and deploy it into a portfolio of high-rated corporate bonds and debentures. Returns are generated primarily through interest income accrued on the bonds held. The NAV of the fund moves with changes in bond prices, which are in turn affected by interest rate movements and credit quality changes of the issuers.
Are corporate bond funds a safe investment?
Corporate bond funds are considered relatively lower risk within the debt mutual fund universe due to their high credit quality mandate. However, they are not risk-free. Interest rate movements can affect NAV in the short term, and even highly rated issuers can face credit events. Investors should assess these risks relative to their own risk tolerance and investment horizon.

Disclaimer: Please note that this information is for educational purposes only, and is not recommendatory.
Are corporate bond funds suitable for beginners?
Corporate bond funds can be a reasonable starting point for investors new to debt mutual funds, given their high credit quality focus and relative return stability. However, beginners should understand that NAV can fluctuate with interest rate changes and that returns are not guaranteed the way bank fixed deposits are.

Disclaimer: Please note that this information is for educational purposes only, and is not recommendatory.
How are corporate bond funds taxed in India?
Corporate bond funds are taxed as debt mutual funds. Gains from units held for less than 24 months are treated as Short-Term Capital Gains (STCG) and taxed at the investor's applicable income tax slab rate. Gains from units held for 24 months or more are treated as Long-Term Capital Gains (LTCG) and taxed at 12.50% without the benefit of indexation.
Is There Any SBI Corporate Bond Fund?
Yes, the SBI Corporate Bond Fund is one of the schemes available in the corporate bond fund category. It primarily invests in high-rated corporate debt instruments, typically with a focus on AAA-rated securities, as per category norms. Like other corporate bond funds, its performance can be influenced by interest rate movements and changes in credit conditions. Disclaimer: This is for educational purposes only and not a recommendation. Fund suitability depends on individual financial goals, risk tolerance, and investment horizon.