10 Mutual Funds That Pay Over 10% Annual Returns in India (2025)
If you're looking for stable, long-term growth, these high-return mutual funds might be your smartest investment of 2025.
Historically, mutual funds have proven to be a relatively low-risk way to invest. While they’re not risk-free, they’re generally considered less volatile than picking individual stocks, though that depends a lot on the type of fund and its investment strategy.
Fundamentally, mutual funds pool money from many investors and use it to buy a mix of assets—stocks, bonds, sometimes even gold or international equities. The big advantage here is diversification. Instead of putting all your eggs in one basket, you’re spreading your investment across dozens (sometimes hundreds) of instruments. This reduces the impact of one company, or even one sector, underperforming.
And lately, with inflation eating into savings, a lot of investors are paying more attention to return rates. Some mutual funds in India are offering over 10% annual returns, which is significantly higher than what you'd get from fixed deposits, savings accounts, or even real estate rentals.
But before we go in, there are a few things to understand about both the funds and the risks.
David Adubiina
What is a Mutual Fund?
A mutual fund is an investment vehicle where money from multiple people is pooled together and managed by a professional fund manager. That manager then invests the total pool into a mix of assets—like stocks, bonds, gold, or other securities—depending on the fund’s objective.
Here’s why that matters for you: instead of picking individual stocks or bonds on your own (which takes time, research, and risk), you can invest in a mutual fund that spreads your money across several investments. That built-in diversification helps reduce your overall risk because even if one stock in the portfolio performs poorly, the others may balance it out.
There are mutual funds for all kinds of goals. Some aim for long-term growth through equity, others focus on stable returns through fixed-income assets, and some combine both.
Important Considerations
- Past performance is not a guarantee:
Mutual funds that did well last year might not do the same this year. Returns fluctuate with market conditions, fund management choices, and broader economic factors. - Different funds, different risk levels:
A small-cap fund, for instance, is likely to swing more than a large-cap one. Same with sector-specific funds like pharma or infrastructure—they can outperform, but they can also crash harder. - Diversification still matters:
Even within mutual funds, it’s smart to diversify. That means splitting your money across equity, debt, and maybe even hybrid funds, depending on your goals. - Speak to an advisor if unsure:
If you're not sure what suits your risk appetite, it's always a good move to consult a registered financial advisor, especially if you're investing a significant amount.
Types of Mutual Funds (Based on Assets)
To keep things simple, here are the main types of mutual funds based on what they invest in:
- Equity Mutual Funds
These primarily invest in company stocks. High potential for returns, but also higher risk. Great for long-term wealth building if you’re okay with short-term ups and downs.
- Debt Mutual Funds
These focus on fixed-income instruments like government securities or corporate bonds. More stable, lower risk—often preferred by conservative investors or those close to retirement.
- Hybrid Mutual Funds
As the name suggests, these are a mix of both equity and debt. They aim to balance growth with stability. Suitable if you want exposure to stocks but with a safety net.
Top Mutual Funds in India with Over 10% Annual Returns (as of 2025)
Here’s an infographic showing a curated list of mutual funds that have consistently delivered above 10% annual returns over the last few years. These aren’t recommendations, but a snapshot of what’s performing well right now. Always do your due diligence before investing.
Conclusion
While getting over 10% annual returns might not sound as exciting as the kind of gains you hear about with individual stocks or crypto, mutual funds offer something far more sustainable: consistency and long-term growth without the daily stress of tracking markets.
That said, no fund is risk-free. Every mutual fund carries its own mix of volatility, sector exposure, and return potential. What works for one person might not be right for another. That’s why it's important to look beyond the headline return and ask: Does this fund align with my goals, timeline, and risk appetite?
If you’re just getting started, don’t chase returns blindly. Focus on understanding the basics, choose funds based on your financial plan, and stay invested long enough to see results.
David Adubiina
