Best Gilt Mutual Funds 2026
Gilt funds invest only in government securities — zero credit risk, suitable for conservative long-term investors. 232 funds available on TopFund.
6.71%
Avg 3Y CAGR
What are Gilt Mutual Funds?
Gilt funds invest exclusively in securities issued by the Government of India and state governments, which eliminates credit risk entirely — there's no scenario where the issuer defaults, since it's backed by sovereign guarantee. That makes gilt funds unique among debt categories: zero credit risk, but full exposure to interest rate risk, since these funds often hold long-maturity government bonds.
This is the category where the inverse relationship between bond prices and interest rates matters most. Gilt fund NAVs can swing significantly with RBI's rate decisions — they're typically the biggest beneficiaries of a rate-cutting cycle, since falling rates push existing bond prices up, and correspondingly the hardest hit debt category during a rate-hiking cycle. This is a meaningfully different risk profile from what "government bonds = safe" intuitively suggests.
Gilt funds suit investors who specifically understand and want to take a view on interest rate direction — often used tactically ahead of an expected rate-cut cycle — rather than investors looking for a "safe" debt option in the capital-stability sense. For that latter goal, overnight, liquid, or short-duration funds are a closer fit; gilt funds trade credit risk for interest rate risk, they don't remove risk altogether.
Top Gilt Funds by Star Rating
SBI Fixed Maturity Plan (FMP) - Series 60 (1878 Days) - Direct Plan - Growth
SBI Mutual Fund · Gilt with 10 year Constant Duration
SBI Fixed Maturity Plan (FMP) - Series 6 (3668 Days) - Direct Plan - Growth
SBI Mutual Fund · Gilt with 10 year Constant Duration
SBI Fixed Maturity Plan (FMP) - Series 66 (1361 Days) - Direct Plan - Growth
SBI Mutual Fund · Gilt with 10 year Constant Duration
ICICI Prudential Gilt Fund - Growth
ICICI Prudential Mutual Fund · Gilt
ICICI Prudential Gilt Fund - Direct Plan - IDCW
ICICI Prudential Mutual Fund · Gilt
ICICI Prudential Gilt Fund - Direct Plan - Growth
ICICI Prudential Mutual Fund · Gilt
ICICI Prudential Gilt Fund - IDCW
ICICI Prudential Mutual Fund · Gilt
SBI Fixed Maturity Plan (FMP) - Series 57 (1835 Days) - Direct Plan - Growth
SBI Mutual Fund · Gilt with 10 year Constant Duration
SBI Fixed Maturity Plan (FMP)-Series 72 (1239 Days) Regular Plan- Income Distribution Cum Capital Withdrawal Payout
SBI Mutual Fund · Gilt with 10 year Constant Duration
SBI Fixed Maturity Plan (FMP) Series 45 (1840 Days) - Direct Plan - Income Distribution cum Capital Withdrawal Option (IDCW)
SBI Mutual Fund · Gilt with 10 year Constant Duration
Frequently Asked Questions
What are Gilt mutual funds?
Gilt mutual funds invest only in government securities — zero credit risk, suitable for conservative long-term investors.
What is the minimum investment in Gilt funds?
Most Gilt funds allow SIP starting from ₹500/month or ₹1,000 lumpsum. Some funds have lower minimums of ₹100 via SIP.
Are Gilt mutual funds safe?
Debt funds carry lower risk than equity but are not entirely risk-free — they have credit risk and interest rate risk. They are suitable for short-to-medium term goals.
How are Gilt fund returns taxed?
Debt fund gains are added to income and taxed per your income tax slab (post-2023 budget).
Are gilt funds completely safe since they invest in government securities?
They carry zero credit risk since the government cannot default on its own debt, but they carry meaningful interest rate risk — gilt fund NAVs can fall significantly when interest rates rise, since these funds typically hold long-maturity bonds that are highly sensitive to rate changes. "Safe" in the credit sense doesn't mean "stable" in the price sense.
When is the best time to invest in gilt funds?
Gilt funds have historically performed best during rate-cutting cycles, since falling interest rates push existing bond prices higher. Investors who expect the RBI to cut rates sometimes use gilt funds tactically to benefit from that price appreciation — though correctly timing a rate cycle is itself difficult, which is the core risk of this approach.