This study presents a comprehensive performance evaluation of the risk–return profiles and performance trajectories of mutual fund schemes offered by banking and non-banking financial companies (NBFCs) in India over the period of 2018 to 2023. With a focus on enhancing investment decision-making, the research employs key risk and return metrics, including alpha, beta, standard deviation, Sharpe ratio, Treynor’s ratio and Jensen’s ratio. By evaluating the performance of large cap, mid-cap and equity-linked savings scheme (ELSS) funds within these sectors, the research offers a nuanced understanding of their performance dynamics. The findings provide investors and stakeholders with valuable insights into the financial performance of both banking and NBFCs, enabling more informed investment decisions. This research contributes to the ongoing discourse in the financial sector by shedding light on the performance disparities and strengths of mutual fund offerings from distinct financial entities.