What about debt funds — like banking & PSU debt funds?

Banking & PSU debt funds lend mainly to banks and public-sector companies — among the highest-credit-quality borrowers in the Indian bond market — which is why the category is a popular 'safety-first' debt choice for 2–4 year money. Returns land in the FD-plus neighbourhood rather than equity territory: think stability and predictable compounding, not growth.

How to judge one: look at the Yield to Maturity (what the portfolio currently earns), the modified duration (longer = more sensitive to rate moves — prefer shorter if you can't predict rates, and nobody can), the credit profile (this category should be nearly all AAA/sovereign — treat exceptions as a flag), and the expense ratio, which matters enormously when gross yields are modest. Post-2023, debt fund gains are taxed at your slab rate, so compare against FDs on convenience and liquidity, not tax magic.

Honest note: FundLens currently scores equity and index categories — debt fund coverage (banking & PSU, corporate bond, liquid) is on the roadmap, prioritised because visitors keep asking. Until then, apply the four checks above on any AMC's disclosure page, and use Ask FundLens for the concepts. Research, not investment advice.