{"id":8201,"date":"2026-10-26T12:35:49","date_gmt":"2026-10-26T07:05:49","guid":{"rendered":"https:\/\/1finance.co.in\/1f-dashboard\/?post_type=blog&#038;p=8201"},"modified":"2026-10-26T16:07:42","modified_gmt":"2026-10-26T10:37:42","slug":"nps-scheme-c-pension-fund-comparison","status":"publish","type":"blog","link":"https:\/\/1finance.co.in\/1f-dashboard\/blog\/nps-scheme-c-pension-fund-comparison\/","title":{"rendered":"NPS Scheme C compared: which pension fund runs corporate bonds best"},"content":{"rendered":"<p>Scheme C holds bonds issued by companies, banks and public-sector bodies. It is the middle layer of an NPS account, safer than equity and usually better-paying than government bonds. Ten pension funds run it, and under active choice you can pick a different fund for Scheme C than for equity or government bonds.<\/p>\n<p>Here is how all ten compare.<\/p>\n<h2>Returns: all 10 funds<\/h2>\n<table>\n<thead>\n<tr>\n<th>Pension fund<\/th>\n<th>1 year<\/th>\n<th>3 years<\/th>\n<th>5 years<\/th>\n<th>7 years<\/th>\n<th>10 years<\/th>\n<th>Since inception<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>HDFC<\/td>\n<td>5.35%<\/td>\n<td>7.71%<\/td>\n<td>6.67%<\/td>\n<td>7.64%<\/td>\n<td>7.85%<\/td>\n<td>8.96%<\/td>\n<\/tr>\n<tr>\n<td>SBI<\/td>\n<td>5.44%<\/td>\n<td>7.63%<\/td>\n<td>6.47%<\/td>\n<td>7.37%<\/td>\n<td>7.62%<\/td>\n<td>9.28%<\/td>\n<\/tr>\n<tr>\n<td>ICICI Prudential<\/td>\n<td>5.39%<\/td>\n<td>7.54%<\/td>\n<td>6.46%<\/td>\n<td>7.29%<\/td>\n<td>7.62%<\/td>\n<td>9.26%<\/td>\n<\/tr>\n<tr>\n<td>Kotak<\/td>\n<td>5.76%<\/td>\n<td>7.66%<\/td>\n<td>6.44%<\/td>\n<td>7.09%<\/td>\n<td>7.23%<\/td>\n<td>9.01%<\/td>\n<\/tr>\n<tr>\n<td>UTI<\/td>\n<td>5.59%<\/td>\n<td>7.61%<\/td>\n<td>6.41%<\/td>\n<td>7.37%<\/td>\n<td>7.39%<\/td>\n<td>8.53%<\/td>\n<\/tr>\n<tr>\n<td>Aditya Birla Sun Life<\/td>\n<td>4.76%<\/td>\n<td>7.33%<\/td>\n<td>6.35%<\/td>\n<td>7.32%<\/td>\n<td>\u2013<\/td>\n<td>8.00%<\/td>\n<\/tr>\n<tr>\n<td>LIC<\/td>\n<td>4.88%<\/td>\n<td>7.23%<\/td>\n<td>6.20%<\/td>\n<td>7.24%<\/td>\n<td>7.42%<\/td>\n<td>8.65%<\/td>\n<\/tr>\n<tr>\n<td>Tata<\/td>\n<td>4.89%<\/td>\n<td>7.41%<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>6.99%<\/td>\n<\/tr>\n<tr>\n<td>Axis<\/td>\n<td>5.16%<\/td>\n<td>7.37%<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>7.36%<\/td>\n<\/tr>\n<tr>\n<td>DSP<\/td>\n<td>5.42%<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>\u2013<\/td>\n<td>7.51%<\/td>\n<\/tr>\n<tr>\n<td><strong>Benchmark<\/strong><\/td>\n<td>4.90%<\/td>\n<td>7.05%<\/td>\n<td>6.19%<\/td>\n<td>7.48%<\/td>\n<td>7.59%<\/td>\n<td>\u2013<\/td>\n<\/tr>\n<tr>\n<td><strong>Average of all funds<\/strong><\/td>\n<td>5.26%<\/td>\n<td>7.50%<\/td>\n<td>6.43%<\/td>\n<td>7.33%<\/td>\n<td>7.52%<\/td>\n<td>\u2013<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>Tier I, as on 18 September 2026. Funds sorted by 5-year return; funds without a 5-year record are at the bottom.<\/em><\/p>\n<h2>What the numbers show<\/h2>\n<p><strong>HDFC leads on every long period.<\/strong> It ranks first over 3, 5, 7 and 10 years. It is also the only fund that beat the benchmark over 7 years (7.64% against 7.48%).<\/p>\n<p><strong>The spread between funds is narrow.<\/strong> Over 10 years, the best (HDFC, 7.85%) and weakest (Kotak, 7.23%) are 0.62 percentage points apart. \u20b91 lakh grew to about \u20b92.13 lakh against \u20b92.01 lakh. That is a real gap, but far smaller than in equity.<\/p>\n<p><strong>Most funds beat the benchmark over 3 and 5 years.<\/strong> Every fund with a 3-year record beat the 7.05% benchmark, and every fund with a 5-year record beat 6.19%. Over 10 years, only HDFC, ICICI Prudential and SBI did.<\/p>\n<p><strong>Kotak&#8217;s recent lead does not show up in the long run.<\/strong> Kotak has the best 1-year return (5.76%) and the second-best 3-year return. But it ranks last over 7 and 10 years.<\/p>\n<p><strong>One-year returns sit below the bonds&#8217; coupons.<\/strong> The funds&#8217; larger holdings pay coupons of about 7% to 8%, yet 1-year returns were 4.76% to 5.76%. The difference is a fall in bond prices, which happens when interest rates rise. It continued after 18 September: by 23 October, HDFC&#8217;s and SBI&#8217;s 1-year returns had slipped below 3% (Value Research).<\/p>\n<h2>Credit quality: how much risk each fund takes<\/h2>\n<p>A corporate bond fund can raise its return by holding more AA-rated bonds, which pay more than AAA bonds but carry more default risk.<\/p>\n<table>\n<thead>\n<tr>\n<th>Pension fund<\/th>\n<th>AAA-rated<\/th>\n<th>AA-rated<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Aditya Birla Sun Life<\/td>\n<td>89.08%<\/td>\n<td>6.68%<\/td>\n<\/tr>\n<tr>\n<td>LIC<\/td>\n<td>86.43%<\/td>\n<td>8.67%<\/td>\n<\/tr>\n<tr>\n<td>UTI<\/td>\n<td>81.26%<\/td>\n<td>10.28%<\/td>\n<\/tr>\n<tr>\n<td>Axis<\/td>\n<td>80.68%<\/td>\n<td>9.20%<\/td>\n<\/tr>\n<tr>\n<td>HDFC<\/td>\n<td>78.49%<\/td>\n<td>17.26%<\/td>\n<\/tr>\n<tr>\n<td>ICICI Prudential<\/td>\n<td>78.41%<\/td>\n<td>16.12%<\/td>\n<\/tr>\n<tr>\n<td>Kotak<\/td>\n<td>77.96%<\/td>\n<td>16.88%<\/td>\n<\/tr>\n<tr>\n<td>Tata<\/td>\n<td>76.23%<\/td>\n<td>14.79%<\/td>\n<\/tr>\n<tr>\n<td>SBI<\/td>\n<td>73.54%<\/td>\n<td>16.06%<\/td>\n<\/tr>\n<tr>\n<td>DSP<\/td>\n<td>71.68%<\/td>\n<td>21.49%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>Share of the portfolio. The rest is mainly cash, REITs and government bonds. Value Research, October 2026.<\/em><\/p>\n<p>The range is wide:<\/p>\n<ul>\n<li><strong>Most conservative:<\/strong> Aditya Birla Sun Life (6.68% AA) and LIC (8.67% AA).<\/li>\n<li><strong>Most AA-heavy:<\/strong> DSP (21.49% AA), HDFC (17.26%) and Kotak (16.88%).<\/li>\n<\/ul>\n<p>The conservative funds paid for their caution. LIC ranks last over 3 years, and Aditya Birla Sun Life ranks last over 1 year. HDFC took more credit risk than most and earned the best long-term record. More AA bonds raise the return only if none of them default, which is why the long record matters more than any single year.<\/p>\n<h2>Where the money sits<\/h2>\n<table>\n<thead>\n<tr>\n<th>Pension fund<\/th>\n<th>Tier I assets (\u20b9 crore)<\/th>\n<th>Share<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>HDFC<\/td>\n<td>37,054<\/td>\n<td>41.5%<\/td>\n<\/tr>\n<tr>\n<td>SBI<\/td>\n<td>17,078<\/td>\n<td>19.1%<\/td>\n<\/tr>\n<tr>\n<td>ICICI Prudential<\/td>\n<td>15,287<\/td>\n<td>17.1%<\/td>\n<\/tr>\n<tr>\n<td>Axis<\/td>\n<td>5,349<\/td>\n<td>6.0%<\/td>\n<\/tr>\n<tr>\n<td>LIC<\/td>\n<td>4,655<\/td>\n<td>5.2%<\/td>\n<\/tr>\n<tr>\n<td>UTI<\/td>\n<td>2,606<\/td>\n<td>2.9%<\/td>\n<\/tr>\n<tr>\n<td>Aditya Birla Sun Life<\/td>\n<td>2,061<\/td>\n<td>2.3%<\/td>\n<\/tr>\n<tr>\n<td>Tata<\/td>\n<td>1,866<\/td>\n<td>2.1%<\/td>\n<\/tr>\n<tr>\n<td>Kotak<\/td>\n<td>1,804<\/td>\n<td>2.0%<\/td>\n<\/tr>\n<tr>\n<td>DSP<\/td>\n<td>1,587<\/td>\n<td>1.8%<\/td>\n<\/tr>\n<tr>\n<td><strong>Total<\/strong><\/td>\n<td><strong>89,347<\/strong><\/td>\n<td>100%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>Approximate Tier I net assets, Value Research, October 2026.<\/em><\/p>\n<p>HDFC manages about 41% of all Scheme C Tier I money. HDFC, SBI and ICICI Prudential together hold close to 78%.<\/p>\n<h2>How to choose your Scheme C fund<\/h2>\n<ol>\n<li><strong>Look at 5 and 10 years.<\/strong> HDFC, SBI and ICICI Prudential lead the long-term columns.<\/li>\n<li><strong>Check the credit mix.<\/strong> If you want Scheme C to be the steady part of your account, a lower AA share is reasonable, even at a slightly lower return.<\/li>\n<li><strong>Keep the gaps in proportion.<\/strong> Over 3 and 5 years, the top and bottom funds are less than half a percentage point apart. Your Scheme E choice moves your corpus more than this one.<\/li>\n<li><strong>Mix funds if it helps.<\/strong> Under active choice you can use up to three pension funds, one per asset class. For example, one fund for Scheme E and another for Scheme C.<\/li>\n<\/ol>\n<p>See the <a href=\"https:\/\/1finance.co.in\/blog\/nps-scheme-e-pension-fund-comparison\/\">Scheme E<\/a> and <a href=\"https:\/\/1finance.co.in\/blog\/nps-scheme-g-pension-fund-comparison\/\">Scheme G<\/a> comparisons, or the individual reviews of <a href=\"https:\/\/1finance.co.in\/blog\/hdfc-pension-fund-nps-review\/\">HDFC<\/a>, <a href=\"https:\/\/1finance.co.in\/blog\/sbi-pension-fund-nps-review\/\">SBI<\/a> and <a href=\"https:\/\/1finance.co.in\/blog\/icici-prudential-pension-fund-nps-review\/\">ICICI Prudential<\/a>.<\/p>\n<hr \/>\n<p><em>Sources: returns for Tier I as on 18 September 2026, NPS Trust data as published by HDFC Securities. Net assets and credit mix: Value Research, October 2026. Past returns do not guarantee future returns.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Scheme C returns, credit quality and assets for all 10 NPS pension funds. HDFC leads over 3, 5, 7 and 10 years, and the spread between funds is narrow.<\/p>\n","protected":false},"featured_media":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":true,"_updated_date":"","_blog_featured_landing":false},"blog-category":[383],"acf":{"alt_text":"","include_in_calculator_page":["NPS vs EPF vs Mutual Fund Calculator"],"hash_tags":"","spotify-id":"","show_audio_player":false,"audio_title":"","audio_link":"","key_takeaway":"","article_sources":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.11 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>NPS Scheme C compared: best fund for corporate bonds<\/title>\n<meta name=\"description\" content=\"Scheme C returns, credit quality and assets for all 10 NPS pension funds. 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