Top-performing Gilt Funds in India for 2025: Meaning, Features & Benefits
Gilt funds are a type of debt mutual fund that invest mainly in government securities issued by the Reserve Bank of India (RBI). Gilt funds are used to give investors exposure to government bonds, and their returns are linked to changes in interest rates in the economy.. Let’s take a look at some of the top gilt funds in India, along with their performance, benefits and risks associated with investing in them.
Top Gilt Funds in India
| Name | AUM(Rs. in cr.) | CAGR 3Y(%) | Expense Ratio(%) | CAGR 5Y(%) | NAV(₹ per unit) | Volatility(%) |
|---|---|---|---|---|---|---|
| ICICI Pru Gilt Fund | 8550.7 | 8.47 | 0.56 | 7.11 | 111.98 | 1.79 |
| SBI Magnum Gilt Fund | 11322.01 | 8.05 | 0.46 | 6.7 | 70.06 | 3.24 |
| Edelweiss Government Securities Fund | 166.48 | 7.68 | 0.51 | 6.65 | 26.11 | 3.34 |
| DSP Gilt Fund | 1493.59 | 8.22 | 0.57 | 6.55 | 102.39 | 3.46 |
| Axis Gilt Fund | 612.82 | 7.94 | 0.42 | 6.41 | 27.3 | 3.22 |
| Kotak Gilt Fund-PF&Trust | 3572 | 7.52 | 0.47 | 6.3 | 110.86 | 3.91 |
| Kotak Gilt Fund | 3572 | 7.51 | 0.47 | 6.3 | 108.24 | 3.91 |
| PGIM India Gilt Fund | 106.57 | 7.86 | 0.55 | 6.29 | 32.71 | 3 |
| ICICI Pru Constant Maturity Gilt Fund | 2534.54 | 8.47 | 0.24 | 6.14 | 25.44 | 2.55 |
| Tata Gilt Securities Fund | 1255.57 | 8.04 | 0.27 | 6.14 | 87.7 | 3.33 |
Disclaimer: Please note that the above list of the best gilt funds is for educational 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.
Note: The data on the list of the best gilt funds is as of October 1, 2025. This data is derived from the Tickertape Mutual Funds Screener.
- 5Y CAGR: Sorted from Highest to Lowest
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Top Gilt Funds in India
ICICI Pru Gilt Fund
ICICI Pru launched the Gilt Fund in 2003. The fund invests mainly in government securities issued by the Government of India. It seeks returns by focusing on long-term government bonds, with performance depending on interest rate changes and bond performance.
SBI Magnum Gilt Fund
SBI introduced the Magnum Gilt Fund in 1999. The fund invests in sovereign debt, specifically government bonds. It generates income from government securities, and its returns depend largely on interest rate movements in the bond market.
Edelweiss Government Securities Fund
Edelweiss launched the Government Securities Fund in 2005. The fund invests in government bonds and aims to provide returns through capital appreciation and income. Its performance depends on investing in long-term government securities and reacting to interest rate fluctuations.
DSP Gilt Fund
DSP launched the Gilt Fund in 2001. The fund invests in government securities issued by the Government of India. It provides returns by offering exposure to government bonds and interest rate changes, focusing on low-risk, sovereign debt.
Axis Gilt Fund
Axis launched the Gilt Fund in 2003. The fund invests primarily in government bonds. It generates returns by investing in long-term debt instruments, with performance largely influenced by interest rate changes and government bond values.
Kotak Gilt Fund-PF&Trust
Kotak introduced the Gilt Fund-PF&Trust in 2003. The fund invests in government securities and emphasises providing stability for pension funds and trusts. It primarily invests in high-quality sovereign debt to follow a conservative investment approach.
Kotak Gilt Fund
Kotak launched the Gilt Fund in 2003. The fund invests in government securities to provide both capital appreciation and income. Its performance depends on changes in interest rates and the value of government bonds.
PGIM India Gilt Fund
PGIM India introduced the Gilt Fund in 2003. The fund invests in government bonds and focuses on delivering stable returns through sovereign debt. Its performance depends on interest rate movements and government bond values.
ICICI Pru Constant Maturity Gilt Fund
ICICI Pru launched the Constant Maturity Gilt Fund in 2007. The fund invests in government bonds with a constant maturity profile. It focuses on long-term government securities and generates returns driven by interest rate changes and bond performance.
Tata Gilt Securities Fund
Tata launched the Gilt Securities Fund in 2003. The fund invests in government securities issued by the Government of India. It seeks returns through capital appreciation and income from sovereign debt, with performance tied to interest rate fluctuations.
What are Gilt Funds?
Gilt funds are mutual funds that mainly invest in government bonds and treasury bills issued by the central or state government. These funds focus on low-risk, fixed-income investments backed by the government. The name “gilt” comes from the term “gilt-edged,” which refers to high-quality, safe investments.
Taxation on Gilt Funds Investment
The tax on gilt mutual funds depends on how long you hold them. Different tax rates apply to short-term and long-term gains. Knowing these tax rules can help investors make better decisions about when to invest or sell. Here’s a brief overview of how capital gains from gilt mutual funds are taxed as per the latest regulations:
| Capital Gains Type | Holding Period | Tax Treatment |
| Short-Term Capital Gains (STCG) | Less than or equal to 36 months | Taxed as per the investor’s income tax slab rate |
| Long-Term Capital Gains (LTCG) | More than 36 months | Taxed at a flat 12.5% rate without indexation benefits |
How to Invest in Gilt Funds?
You can easily start to invest in the top gilt funds in India by following these steps:
- To invest in the gilt mutual funds, you can visit an equity investment platform such as smallcase
- The next step is to research and identify the best gilt mutual funds that match your investment thesis. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a 5-year SIP plan, and complete the process.
Features of Gilt Funds
- Government Backing: Gilt funds invest in government securities, which are backed by the central or state government.
- Returns: The returns of gilt funds depend on interest rate movements. When interest rates fall, the value of existing government securities can rise, increasing the fund’s value. When interest rates rise, the value of these securities can decrease.
- Interest Rate Sensitivity: The value of gilt mutual funds changes with interest rate movements. The fund’s NAV can fluctuate as interest rates rise or fall, affecting overall returns.
Advantages of Investing in Gilt Funds in India
- Zero Credit Risk: Unlike corporate bonds or other debt instruments, gilt funds investment carries no default risk since they invest only in government securities.
- Performance in Falling Interest Rate Scenarios: When interest rates decline, existing bonds with higher coupon rates become more valuable. This leads to price appreciation for gilt fund investors.
- Portfolio Diversification: Gilt funds represent a different asset class with distinct risk-return characteristics compared to equities or corporate debt instruments.
- Accessibility: Investing directly in government securities requires larger capital amounts. Gilt funds allow investors to access government securities with smaller investment amounts and professional fund management.
Risks of Investing in Gilt Mutual Funds
- Interest Rate Risk: The Net Asset Value (NAV) of gilt funds is sensitive to interest rate changes. When interest rates rise, the market value of existing government securities can fall, which may reduce gilt fund returns.
- Reinvestment Risk: This occurs when cash flows from the fund, such as interest payments, need to be reinvested at a lower rate than the original investment. This can impact the overall performance of gilt fund investments.
- Market Risk: Gilt funds investment carries some market risk. Changes in market conditions, including demand for government securities, can influence gilt fund returns, even though the underlying securities are government-backed.
Factors to Consider While Investing in Gilt Funds
- Interest Rate Environment: Gilt funds are sensitive to changes in interest rates. When interest rates rise, the value of the bonds held by these funds may fall, which can impact gilt fund returns. Understanding how interest rates can affect these funds is important before considering investment in gilt mutual funds.
- Expense Ratio: The cost of managing the fund, known as the expense ratio, can affect the returns you receive. Comparing the expense ratios of different gilt funds can help you understand the cost differences between various funds.
- Risk Profile: Although gilt funds are considered risk-free debt funds, as they invest in government securities, they can still be influenced by factors such as interest rate changes and market fluctuations. Understanding your risk tolerance is important when investing in gilt funds.
To Wrap It Up…
In conclusion, gilt mutual funds offer benefits like being backed by government securities, which makes them a low-risk investment. However, there are risks to consider, such as changes in interest rates and market conditions, which can affect gilt fund returns.
To find the best-performing gilt funds, investors can use the Tickertape Mutual Fund Screener. This tool has over 50 pre-loaded filters, making it easy to compare and select the most suitable gilt funds based on your investment goals and risk preferences.
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Frequently Asked Questions on Gilt Mutual Funds
A gilt fund is a type of mutual fund that invests in government bonds and treasury bills. It is called a gilt fund because, in the past, government bonds were printed on “gilt-edged” paper, meaning they were considered valuable and secure.
Whether a gilt fund is better than a fixed deposit (FD) depends on your goals, risk tolerance, and interest rates. FDs offer a guaranteed return with low risk, while gilt funds can be affected by market changes and interest rates.
The best gilt fund depends on factors such as your individual goals, investment strategy, and market conditions. What works for one person may not work for another, so it’s important to choose a fund that aligns with your investment thesis.
Gilt funds invest in government securities, which are backed by the government. However, their returns depend primarily on interest rates and market conditions. Therefore, the level of safety can depend on the market environment and the fund’s management.
No, gilt funds are not tax-free. The tax on returns depends on the holding period. Short-term gains are taxed based on your income tax slab, and long-term gains are taxed at a flat rate of 12.5%.
The duration of investment in gilt funds depends on your financial goals, investment strategy, and market conditions. Gilt funds may perform better when held for a longer period, especially in certain interest rate environments.
The return on gilt funds can vary depending on the fund and market conditions. Returns are influenced by interest rate changes and the performance of the government bonds the fund holds.
Gilt funds invest only in government securities, which carry low credit risk since they are backed by the government. Bond funds, on the other hand, can invest in a mix of corporate bonds, debentures, and government securities.
