Search "best mutual funds for retirement" and you will find dozens of lists. Each claims to have found the perfect fund. Most never explain how they picked those funds.
We have spent many years helping NRIs plan their retirement at Belong.
One thing I have learned: there is no single "best" fund for everyone. Your ideal retirement fund depends on your age, risk appetite, return expectations, and how soon you plan to retire.
This guide takes a different approach. Instead of giving you one list and calling it definitive, I am sharing multiple lists. Each list uses a different criterion.
Each criterion is clearly disclosed.
Why? Because transparency matters more than picking winners. You deserve to know why a fund made the list, not just that it did.
👉 Tip: Before choosing any fund, use Belong's Residential Status Calculator to confirm your NRI status. Your tax treatment depends on it.
How We Built These Lists (And Why You Should Care)
Most "best of" lists mix different criteria without telling you. One fund might rank high because of past returns. Another because of brand recognition. A third because of advertising budget.
That approach does not help you make informed decisions.
Why No Single Fund is "Best for Everyone"
Consider two NRIs in Dubai. Both are 42 years old. Both earn similar salaries.
Rahul plans to retire in India at 55. He wants aggressive growth now while he can tolerate volatility. An equity-heavy retirement fund suits him.
Priya plans to stay in Dubai until 60, then split time between India and UAE. She prefers stability over maximum returns. A hybrid or conservative retirement fund makes more sense for her.
Same age. Same location. Completely different ideal funds.
The Criteria We Use
Each list in this guide uses ONE clear criterion:
- 5-Year Returns: Pure historical performance. Does not predict future returns.
- Morningstar Ratings: Risk-adjusted returns compared to category peers.
- AUM (Assets Under Management): Indicates investor trust and fund stability.
- Recently Launched: Unranked list of newer options worth watching.
Want to compare FD alternatives while building your retirement portfolio? Check our NRI FD Comparison Tool to see how fixed deposits stack up.
What Are Retirement Mutual Funds?
Retirement mutual funds are solution-oriented schemes designed specifically for building a retirement corpus. They come with a mandatory 5-year lock-in period or until the investor reaches retirement age, whichever comes earlier.
These funds typically offer multiple plans within the same scheme:
- Aggressive/Pure Equity Plans: 80-100% equity allocation. Higher risk, higher potential returns.
- Hybrid Plans: 60-80% equity, rest in debt. Balanced approach.
- Conservative Plans: 20-40% equity, rest in debt and government securities. Lower volatility.
👉 Tip: If you are 15+ years away from retirement, equity-heavy plans make sense. If retirement is 5-10 years away, consider hybrid options. For a deeper understanding of asset allocation, read our guide on asset allocation for NRIs.
List A: Best Retirement Funds by 5-Year Returns
Ranking Criteria: Funds ranked by 5-year CAGR (Compound Annual Growth Rate) as of December 2025. Higher returns rank higher.
Important Disclaimer: Past performance does not guarantee future returns. Markets are cyclical, and high returns often follow low returns and vice versa.
Fund Name | 5-Year CAGR | Category | Risk Level |
|---|---|---|---|
ICICI Pru Retirement Fund Pure Equity | 27.58% | Pure Equity | Very High |
HDFC Retirement Savings Fund Equity Plan | 24.98% | Equity | Very High |
Nippon India Retirement Fund Wealth Creation | 21.95% | Hybrid | High |
Aditya Birla SL Retirement Fund 30s Plan | 16.50% | Aggressive Hybrid | High |
Axis Retirement Fund Aggressive Plan | 14.60% | Aggressive Hybrid | High |
Data Source: Value Research, INDmoney, Tickertape as of December 2025
The ICICI Prudential fund tops this list with nearly 28% CAGR over 5 years. That is exceptional. But notice the "Very High" risk rating. This fund invests over 90% in equities, meaning your corpus can drop 30-40% in a market crash.
For NRIs who want to balance returns with stability, explore how hybrid mutual funds blend equity and debt exposure.
List B: Best Retirement Funds by Morningstar Ratings
Ranking Criteria: Funds ranked by Morningstar star rating (5 stars = highest). Morningstar compares risk-adjusted returns against category peers over 3, 5, and 10-year periods.
What Morningstar Ratings Actually Mean
Morningstar is a globally respected investment research firm. Their star ratings measure how well a fund performed compared to similar funds after adjusting for risk.
- 5 Stars: Top 10% of category
- 4 Stars: Next 22.5%
- 3 Stars: Middle 35%
- 2 Stars: Next 22.5%
- 1 Star: Bottom 10%
Fund Name | Rating | Expense Ratio | Min SIP |
|---|---|---|---|
HDFC Retirement Savings Fund Equity Plan | 4 Stars | 0.70% | Rs 100 |
ICICI Pru Retirement Fund Pure Equity | 4 Stars | 0.67% | Rs 100 |
Nippon India Retirement Fund Wealth Creation | 3 Stars | 0.98% | Rs 500 |
Tata Retirement Savings Fund Progressive | 3 Stars | 0.89% | Rs 150 |
Data Source: Morningstar India, ClearTax as of December 2025
Notice the HDFC fund appears in both lists. It ranks second by pure returns but shares top spot by Morningstar rating. This suggests consistent risk-adjusted performance, not just high returns during bull markets.
👉 Tip: Compare expense ratios carefully. A 0.30% difference might seem small, but over 20 years on a Rs 50 lakh corpus, it can cost you Rs 3-4 lakhs in fees.
List C: Best Retirement Funds by AUM & Stability
Ranking Criteria: Funds ranked by Assets Under Management (AUM). Higher AUM indicates more investors trust the fund with their money.
Why AUM Matters for Retirement Planning
Large AUM offers several advantages:
- Lower Impact Costs: Bigger funds can buy/sell large quantities without moving market prices.
- Investor Confidence: More money flowing in suggests investors trust the fund management.
- Fund Stability: Less likely to be shut down or merged.
Fund Name | AUM (Cr) | Fund Age | Fund House |
|---|---|---|---|
HDFC Retirement Savings Fund Equity Plan | Rs 6,968 | 9+ Years | HDFC AMC |
Nippon India Retirement Fund Wealth Creation | Rs 3,244 | 10 Years | Nippon AMC |
SBI Retirement Benefit Fund Aggressive | Rs 3,124 | 4 Years | SBI AMC |
ICICI Pru Retirement Fund Pure Equity | Rs 1,589 | 6 Years | ICICI Pru AMC |
Axis Retirement Fund Aggressive Plan | Rs 782 | 5 Years | Axis AMC |
Data Source: AMFI, Fund House Websites as of November 2025
The HDFC fund dominates AUM rankings, nearly double the second-place fund. This reflects strong brand trust and distribution network. Notice the ICICI fund, which topped the returns list, ranks fourth by AUM. High returns alone do not guarantee investor preference.
List D: Recently Launched Funds (Unranked)
Note: These funds are NOT ranked. They lack the 5-year track record needed for fair comparison. Including them here for awareness only.
New retirement funds deserve monitoring but not immediate investment. Here is why:
- No Track Record: One or two years of data cannot predict long-term behavior.
- Untested Fund Managers: New funds might have less experienced teams.
- Market Cycle Exposure: Funds launched in bull markets might not have faced real downturns.
Fund Name | Launch Date | Why Watch |
|---|---|---|
SBI Retirement Benefit Fund Aggressive Hybrid | Feb 2021 | SBI brand, hybrid structure |
Kotak Retirement Fund | 2022 | Strong fund house reputation |
UTI Retirement Benefit Pension Fund | 2023 | UTI legacy, conservative focus |
Prefer proven funds? Consider exploring GIFT City mutual funds which offer NRIs unique tax advantages.
Special Considerations for NRIs
Investing in Indian retirement funds as an NRI comes with unique considerations that domestic investors do not face.
FATCA Compliance (US/Canada NRIs)
If you are based in the US or Canada, your options are limited. The Foreign Account Tax Compliance Act (FATCA) creates additional reporting requirements. Only about 8 AMCs currently accept investments from US/Canada NRIs.
AMCs that accept US/Canada NRIs include: HDFC, ICICI Prudential, SBI, UTI, Birla Sun Life, L\&T, Sundaram, and PPFAS.
👉 Tip: Before starting any mutual fund investment, complete your KYC process. Many AMCs now offer video KYC, saving you a trip to India.
Tax Treatment for NRIs
For retirement mutual funds with equity orientation (65%+ in equity):
- Short-Term Capital Gains (less than 1 year): 20% TDS
- Long-Term Capital Gains (more than 1 year): 12.5% TDS on gains exceeding Rs 1.25 lakh
India has DTAA agreements with 90+ countries including UAE. You can claim tax credits in your residence country for taxes paid in India. For detailed guidance, read our comprehensive India-UAE DTAA guide.
Currency Risk
Your retirement fund returns in INR. But you earn in AED, USD, or GBP. The rupee has depreciated roughly 3-4% annually against major currencies over the past decade.
A fund returning 15% in INR might effectively return 11-12% in USD terms after currency depreciation. Track this using our Rupee vs Dollar Tracker.
Consider GIFT City Alternatives
For NRIs concerned about currency risk and tax complexity, GIFT City offers an interesting alternative.
GIFT City (Gujarat International Finance Tec-City) is India's first International Financial Services Centre. It allows NRIs to invest in USD-denominated products, protecting against rupee depreciation. Interest earned on GIFT City fixed deposits is tax-free for NRIs.
Belong specializes in helping NRIs access GIFT City products. We offer USD fixed deposits, GIFT City mutual funds, and Alternative Investment Funds through a simple digital process.
👉 Tip: Compare GIFT City FDs with traditional NRE/NRO FDs using our FD Comparison Tool before deciding.
Making Your Decision
There is no single "best" retirement mutual fund. The best fund for you depends on:
- Your years to retirement
- Your risk tolerance
- Your country of residence (FATCA restrictions)
- Your currency exposure preferences
- Your tax situation in both countries
Use the lists above as starting points, not final answers. Cross-reference funds across multiple criteria. A fund that appears in all three ranked lists deserves serious consideration.
Questions about which fund suits your situation? Join our WhatsApp community where many NRIs discuss their retirement planning strategies. Or download the Belong app to explore GIFT City investment options that might complement your retirement portfolio.
Sources
- Morningstar India - morningstar.in
- Value Research Online - valueresearchonline.com
- AMFI India - amfiindia.com
- HDFC Mutual Fund - hdfcfund.com
- ICICI Prudential AMC - icicipruamc.com
- Nippon India Mutual Fund - nipponindiaim.com
- SBI Mutual Fund - sbimf.com
- Tickertape - tickertape.in
- INDmoney - indmoney.com
Disclaimer: This article is for educational purposes only and does not constitute investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance does not guarantee future returns. Consult a SEBI-registered investment advisor for personalized advice.
