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 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?

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

Are corporate bond funds a safe investment?

A corporate debt fund generally carries lower credit risk than debt funds that invest in lower-rated securities. However, interest rate changes, credit downgrades, and liquidity conditions can still affect its NAV. 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 returns, portfolio credit quality and interest-rate sensitivity before considering the category. Unlike fixed deposits, corporate bond fund returns are market-linked and 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. Its performance can be affected by interest-rate movements, portfolio duration and changes in issuer 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 invest at least 80% of their assets in AA+ and above-rated corporate bonds. In 2026, interest rates, inflation and bond yields continue to shape returns across the category. Here, we cover 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

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	9,051.12 9,051.12	7.53 7.53	0.37 0.37	6.76 6.76	5.37 5.37	0.69 0.69	67.21 67.21	- -	1.34 1.34	2.63 2.63
2.	Axis Corp Bond Fund Axis Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	7,768.14 7,768.14	7.65 7.65	0.36 0.36	6.74 6.74	5.61 5.61	0.58 0.58	19.36 19.36	- -	1.30 1.30	2.46 2.46
3.	ICICI Pru Corp Bond Fund ICICI Pru Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	30,201.70 30,201.70	7.37 7.37	0.37 0.37	6.72 6.72	5.82 5.82	0.85 0.85	33.50 33.50	- -	1.32 1.32	2.58 2.58
4.	Franklin India Corporate Bond Fund-A Franklin India Corporate Bond Fund-A	Corporate Bond Fund Corporate Bond Fund	Growth Growth	1,379.00 1,379.00	8.03 8.03	0.26 0.26	6.72 6.72	6.30 6.30	0.90 0.90	116.30 116.30	- -	1.00 1.00	2.97 2.97
5.	Kotak Corporate Bond Fund Kotak Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	15,095.14 15,095.14	7.35 7.35	0.36 0.36	6.43 6.43	5.19 5.19	0.60 0.60	4,199.22 4,199.22	- -	1.33 1.33	2.69 2.69
6.	Aditya Birla SL Corp Bond Fund Aditya Birla SL Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	22,635.93 22,635.93	7.06 7.06	0.34 0.34	6.32 6.32	4.83 4.83	0.63 0.63	121.57 121.57	- -	1.79 1.79	2.18 2.18
7.	UTI Corporate Bond Fund UTI Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	4,718.36 4,718.36	7.25 7.25	0.32 0.32	6.27 6.27	5.24 5.24	0.67 0.67	17.87 17.87	- -	1.26 1.26	2.65 2.65
8.	PGIM India Corp Bond Fund PGIM India Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	85.25 85.25	7.17 7.17	0.37 0.37	6.27 6.27	4.97 4.97	0.55 0.55	51.09 51.09	- -	1.42 1.42	2.57 2.57
9.	SBI Corp Bond Fund SBI Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	22,133.20 22,133.20	7.24 7.24	0.37 0.37	6.26 6.26	5.15 5.15	0.57 0.57	17.01 17.01	- -	1.26 1.26	2.60 2.60
10.	Baroda BNP Paribas Corp Bond Fund Baroda BNP Paribas Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	274.77 274.77	7.74 7.74	0.21 0.21	6.23 6.23	6.03 6.03	0.90 0.90	31.39 31.39	- -	1.28 1.28	2.73 2.73
11.	HDFC Corp Bond Fund HDFC Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	30,286.08 30,286.08	7.00 7.00	0.38 0.38	6.20 6.20	4.65 4.65	0.56 0.56	35.17 35.17	- -	1.66 1.66	2.35 2.35
12.	HSBC Corporate Bond Fund HSBC Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	6,058.07 6,058.07	7.34 7.34	0.33 0.33	6.09 6.09	5.36 5.36	0.63 0.63	83.19 83.19	- -	1.27 1.27	2.80 2.80
13.	Invesco India Corporate Bond Fund Invesco India Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	4,099.11 4,099.11	7.17 7.17	0.29 0.29	6.08 6.08	4.83 4.83	0.55 0.55	3,615.73 3,615.73	- -	1.48 1.48	2.40 2.40
14.	Bandhan Corp Bond Fund Bandhan Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	13,625.53 13,625.53	7.29 7.29	0.34 0.34	6.07 6.07	5.78 5.78	0.77 0.77	21.20 21.20	- -	1.23 1.23	2.72 2.72
15.	DSP Corp Bond Fund DSP Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	2,816.26 2,816.26	7.38 7.38	0.29 0.29	6.03 6.03	6.14 6.14	0.76 0.76	17.49 17.49	- -	0.57 0.57	3.19 3.19
16.	Mirae Asset Corp Bond Fund Mirae Asset Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	44.38 44.38	7.10 7.10	0.27 0.27	6.02 6.02	5.20 5.20	0.65 0.65	13.84 13.84	- -	1.34 1.34	2.49 2.49
17.	Sundaram Corp Bond Fund Sundaram Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	617.02 617.02	7.05 7.05	0.32 0.32	6.01 6.01	4.87 4.87	0.49 0.49	44.10 44.10	- -	1.23 1.23	2.69 2.69
18.	Canara Rob Corp Bond Fund Canara Rob Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	105.62 105.62	6.73 6.73	0.37 0.37	5.83 5.83	4.97 4.97	0.45 0.45	24.66 24.66	- -	1.03 1.03	2.76 2.76
19.	Union Corporate Bond Fund Union Corporate Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	289.12 289.12	6.93 6.93	0.41 0.41	5.78 5.78	4.35 4.35	0.33 0.33	16.51 16.51	- -	1.51 1.51	2.49 2.49
20.	Tata Corp Bond Fund Tata Corp Bond Fund	Corporate Bond Fund Corporate Bond Fund	Growth Growth	2,805.17 2,805.17	7.24 7.24	0.32 0.32	- -	5.18 5.18	0.69 0.69	13.43 13.43	- -	1.40 1.40	2.52 2.52

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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 a 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 concentrate on top-rated issuers, they carry lower credit risk than 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

Higher Credit Quality

Corporate bond funds in India invest at least 80% of their assets in AA+- rated or higher corporate bonds, limiting exposure to lower-rated issuers compared with credit-risk funds.

Income Potential

AAA corporate bond yields ranged from 6.60% to 6.86% across one- to five-year maturities in early 2026, providing funds with interest income from underlying securities.

Portfolio Diversification

Corporate bond funds spread investments across multiple high-rated issuers and maturities, reducing dependence on a single company while providing exposure beyond government securities and equities.

Large Market

India’s outstanding corporate bonds reached approximately ₹59.2 lakh cr in May 2026, providing fund managers with a sizeable market across financial and non-financial issuers.

Professional Management

Fund managers continuously assess issuer credit quality, bond yields and maturity profiles, allowing portfolios to respond to changing interest rates, liquidity conditions and corporate credit developments.

Risks of Investing in Corporate Bond Funds

Interest Rate Risk

Bond prices generally fall when market yields rise. India’s 10-year government bond yield reached 6.91% in August 2026, highlighting the effect changing rates can have on debt markets.

Credit Downgrades

Despite the AA+ minimum allocation requirement, corporate bonds are not risk-free. An issuer downgrade can reduce a bond’s market value and negatively affect the fund’s NAV.

Liquidity Risk

Some corporate bonds trade less frequently than government securities. During market stress, funds may have difficulty quickly selling specific holdings without accepting a lower market price.

Reinvestment Risk

When bonds mature during periods of falling interest rates, fund managers may need to reinvest proceeds at lower yields, potentially reducing the portfolio’s future interest income.

Return Fluctuations

Corporate bond funds generated an average one-year return of around 5.2% as of 28 August 2026, but future returns may vary with yields, duration, and credit conditions.

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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

Review the portfolio’s distribution across AAA, AA+, and other permitted instruments, as ratings indicate relative creditworthiness and help identify how much issuer credit risk the fund carries.

Portfolio Duration

Longer-duration portfolios generally react more strongly to interest-rate movements. Investors can examine Macaulay duration and modified duration to assess a corporate bond fund’s sensitivity to changes in yields.

Yield to Maturity

YTM indicates the portfolio’s prevailing yield based on current bond prices, but it should not be interpreted as a guaranteed return because holdings and market yields change.

Issuer Concentration

Check how assets are distributed across banks, NBFCs and other companies. Heavy exposure to a few issuers or industries can increase portfolio sensitivity to sector-specific credit developments.

Fund Costs

Expense ratios directly reduce investor returns. Comparing costs is particularly relevant in debt funds because differences in gross returns between similar high-credit-quality portfolios can sometimes remain relatively narrow.

Fund Size

Corporate bond funds represented about ₹2.01 lakh cr of average AUM in January 2026, making them one of India’s larger open-ended debt-fund categories.

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 provides a balance between yield enhancement over government securities and keeping credit risk in check. Understanding factors such as corporate bonds 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 Corp 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 mutual funds pool money from investors and invest it across high-rated corporate bonds and debentures. Returns come from coupon income and from bond price movements influenced by interest rates and issuer credit quality.
Are corporate bond funds a safe investment?
A corporate debt fund generally carries lower credit risk than debt funds that invest in lower-rated securities. However, interest rate changes, credit downgrades, and liquidity conditions can still affect its NAV.

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 returns, portfolio credit quality and interest-rate sensitivity before considering the category. Unlike fixed deposits, corporate bond fund returns are market-linked and 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. Its performance can be affected by interest-rate movements, portfolio duration and changes in issuer 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.